Who wants to work forever?

Economic uncertainty has increased concerns about retirement timing.

Older workers are in the news, with the Federal Treasurer Josh Frydenberg calling for more people aged over 65 to help out with the heavy lifting of reducing national debt by prolonging their working lives.

There is nothing new in such rhetoric. One of his recent predecessors, Joe Hockey, wanted to increase the age at which people could access the age pension to 70, an idea that was firmly rejected by Parliament and dropped by Prime Minister Scott Morrison before the last election. In other countries too, similar efforts are underway to block off pathways to retirement.

What to make of all of this? It has long been argued that ageing populations will require us to work for longer. The Organisation for Economic Co-operation and Development, along with a range of other influential bodies, considers that that longer working lives will offset the supposed social welfare burden of ageing populations and counteract the effects of labour shortages due to large numbers of older people retiring from the workforce.

Meanwhile, theorists of ageing point to the benefits of working at older ages for an individual’s prospects of growing old successfully. Thus, working longer is being presented as both a societal and an individual good.

Alongside this has emerged the notion of ‘the longevity economy’, viewed as an antidote to the arguably ageist emphasis on ‘grey tsunamis’ sweeping over ageing nations. Concerning the economic and social contributions of older people, the longevity economy is presented as an increasingly powerful force. As both workers and consumers, older people, it is argued, are set to drive economic growth globally.

Interestingly, by contrast, until relatively recently, early retirement was strongly promoted by governments, employer groups and trade unions as a means of managing labour supply. Older workers were encouraged to make way in order to create work for the jobless in the 1980s and 1990s when unemployment rates, particularly of younger people, were high.

Such approaches have been widely discredited, failing to achieve the hoped-for effects. Instead, research demonstrates that, across the OECD countries, increases in rates of older people’s employment are associated with higher youth employment rates or demonstrate no relationship at all.

While it is sometimes assumed that in an economy there is a ‘lump of labour’ that must be fairly distributed, in fact, the number of jobs is not fixed and older and younger workers might be better considered as complements rather than substitutes in employment. Therefore, while young and old are sometimes characterised as being in conflict, the current ‘ok boomer’ narrative being a case in point, the reality is that we are all in this together.

What of the Treasurer’s demand for greater effort from the over-65s? While in broad terms the value of later retirement is accepted by most observers, the notion that this is possible and desirable for all is open to question. Thus, it has been argued that emphasising paid work, underpinning neo-liberal notions of productivist welfare that some argue is really driving policy on older workers forward, may potentially lead to the further marginalisation of those already disadvantaged in society.

There is also a risk of stigmatising the retired as not pulling their weight in a society which has recast this as a kind of unemployment. Not everyone wants to work for longer and those who are privileged are able to choose to, but they have always been socially empowered with choices, even when early retirement was being encouraged.

Some have no choice but to soldier on in jobs that they do not want to do or can no longer do well, while others who may need to work find getting a job difficult due to factors such as skills deficits and ageism.

Economic uncertainty has increased concerns about retirement timing which has given impetus to the emergence of in-between ‘bridge’ statuses that delay the age of final labour market withdrawal. However, precarious work is likely to result in a precarious retirement, with many older people working in contingent or non-core areas of the labour market with the concomitant risk of poor health and injury associated with poor work organisation, inadequate training and insufficient knowledge of hazard management.

The evidence is clear. Those from lower socio-economic groups are likely to exit the labour force at earlier ages and have lower life expectancies. They are unlikely to benefit much from and contribute much to the longevity economy. Amid present efforts to prolong working lives political capital may be gained by thoughtful policy approaches that acknowledge this reality.

Philip Taylor is Professor of Human Resource Management at Federation University Australia. He is a Fellow of the Gerontological Society of America and was the 2018 Australian Association of Gerontology Glenda Powell Travelling Fellow on the topic of work and ageing.

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