How Many Older Workers Is Just Right?

More people who are older than age 65 are working in the U.S. than ever before. The majority of the large Baby Boom cohort is now older than age 65 and the labor force participation rate for people ages 65 to 74 has increased markedly from 19.2% in 2000 to 26.6% in 2020. The only cohort with a faster rate of growth in the labor market is people ages 75 and older!

Even following the pandemic’s job losses and early retirements, according to the Bureau of Labor Statistics Nov. 5 employment report, there are 10.4 million people older than age 65 working in this country.

But what does this all mean? The data brings us to Goldilocks’ question: Is the current number of older workers too many? Too few? Or just right?

To answer, we must consider three dramatically different narratives regarding older workers.

Working Longer Is Good for Everyone

Narrative No. 1, closely aligned with proponents of positive aging, takes the perspective that working longer is good for older people, for employers, for the economy and for society. This argument begins with the observation that life expectancy has increased dramatically and it is only logical to modernize retirement policy. Does it make sense for people to spend nearly a third of their lives in retirement? This argument is supported by evidence on the association between work and measures of physical and mental health and well-being in older age; the strengths and contributions of older workers (as well as our acumen as entrepreneurs); positive associations between the vitality of economies and the number of older workers; and the economic and social benefits of an employed and engaged older populace. In this understanding of the benefits of work, there are currently too few older workers.

In this narrative, older adults want to work more than they do, so the critical problem to be solved is to persuade employers of the value of older workers so that they recruit and retain them. The reasoning says if work practices are redesigned to make work work for older workers, employers will recognize that their older workers are skilled, experienced, and loyal, and that these characteristics offset perceived higher cost. Most practices recommended to follow this line of reasoning are positive for all age workers: offering flexible hours, job functions and work location; creating a safe and healthy work environment; rewarding work with good pay and good benefits; allowing workers to dial up or down, including phased retirement and return to work following retirement; providing opportunities and incentives for training and further education; facilitating mentorship and other peer-to-peer engagement; supporting caregiving with programs and policies; encouraging autonomy, agency and creativity; and promoting diversity, equity and inclusion.

People Work Longer Out of Necessity

Narrative No. 2 centers different evidence to suggest that people work longer because they need to work longer to afford to retire. Working longer is, therefore, evidence of the failure of government social protection policies and the weakening of workers’ rights. Economist Teresa Ghilarducci leads this charge, making the compelling case that most people are unable to retire because they lack the resources to do so. Major reasons include the replacement of employer-paid defined-benefit pensions by “do it yourself” 401(k) retirement savings plans, deferral of full Social Security benefits until age 70, and increases in debt (including mortgages) later in life.

'The critical problem to be addressed is strengthening the power of workers to negotiate adequate wages, pensions and benefits.’

Furthermore, increases in life expectancy have occurred almost entirely among White people, and Black people’s “workability” (ability to work without harm to health) has not increased. Therefore, later retirement places many, disproportionately Black people, in the difficult position of needing to work longer than they are able to, depriving them of benefits they have earned, and contributes to inequities in retirement time. If retirement systems were more equitable and just, fewer older people would need to work; the current numbers serve as an indictment of the inadequacy of the current systems.

Here, the critical problem to be addressed is strengthening the power of workers to negotiate adequate wages, pensions and benefits, as well as strengthening public retirement options. The core strategies to address these issues are public policy changes to strengthen and empower unions, to include part-time and contingent workforces in the framework of benefits and protections currently covering most full-time workers, to correct existing biases in Social Security benefits calculations, and to increase availability of public retirement accounts, especially for low- and middle-income workers.

Ageism Is Rampant at Work and Has Dire Consequences

Narrative No. 3 focuses on ageism and age discrimination, demonstrating that employers’ practice of getting rid of older workers is ubiquitous and its consequences dire. Gosselin and Johnson’s startling 2018 analysis of Health and Retirement Survey data shows that more than half the people older than age 50 in long-term jobs lose those jobs unexpectedly and involuntarily through a combination of layoffs, quits driven by job dissatisfaction; lack of pay, benefits, work hours, promotion opportunities or pension rule changes and unexpected retirements. “Unexpected retirements” include changes in the workers’ health and caregiving responsibilities.

The same analysis shows that the job people eventually find usually pays less than their original position. Other evidence shows that it takes people older than age 50 twice as long to find a new position once unemployed. This population-level average is validated by experiments showing that identical “tester” job applicants older than age 50 get fewer interviews than younger applicants. This narrative describes draining older workers out of the workforce, so the current number of older workers is too few.

The critical problem this time is ageism, which must be combated by a cultural shift in attitudes as well as strengthening employment age discrimination protections and, significantly, enforcing them. The 1967 Age Discrimination in Employment Act made it illegal to discriminate against people older than age 40 in hiring or retention. A series of subsequent legal decisions, as well as shrinking of the federal enforcement agency (the Equal Employment Opportunity Commission [EEOC]) have weakened the federal law.

‘People’s experience of work in their later life depends significantly upon their experience of work earlier in life.’

Some jurisdictions have added age discrimination protections and enforcement capacity, but uniform protection can only be achieved by new federal legislation, the Protecting Older Workers Against Age Discrimination Act (POWADA), which was passed this spring by the House of Representatives. However, the small number of age discrimination claims filed, let alone won, in localities with stronger laws and enforcement indicates that laws are not enough. Also necessary are employer and employee education about age-discrimination and strategies to shift the culture, like anti-ageism campaigns and design for more intergenerational engagement.

Wherein Lies the Truth?

OK. But who is right? How can these narratives coexist? And what about Goldilocks’ question? As usual, where you stand depends upon where you sit.

These narratives are descriptions of different people. There is no model older worker. People’s desire to work, need to work, ability to work, availability of work and experience of work vary enormously. This variation is not random but follows the too familiar patterns for the varied opportunity structures in this country for people of different races, countries of birth, genders, (dis)abilities and levels of education.

People who have a lot of control over their work—typically “knowledge workers”—are more likely to want and be able to work longer. These people are more likely to be White and to have college educations. People with physically demanding jobs with low control of work content or pace are less able to work for longer, yet more likely to need to work to afford retirement. These workers are more likely to be BIPOC, women and have fewer years of formal schooling.

We know far too little about who suffers from age-discrimination in employment, but some evidence suggests that ageism intersects with race and gender so women and BIPOC people are disproportionately affected.

We must hold onto two ideas at the same time. First, we must have income security and healthcare access for people who cannot work—at ANY age—as well everyone who is past retirement age. In the current environment of high and increasing inequities, it is neither fair nor reasonable to raise the retirement age. Second, we must nurture a culture of work—for all ages, at all levels and for all occupations—where workers are valued, their autonomy cultivated, and their work/life balance recognized.

Finally, like so many conditions of the lives of older adults, people’s experience of work in their later life depends significantly upon their experience of work earlier in life. This, in turn, depends upon their access to the opportunity structures for quality education, justice in the legal system, fair housing, healthy environments and good health. Eliminating ageism is not enough; for older workers to have good options we must investment in opportunity across the life course.

Ruth Finkelstein, ScD, is the Rose Dobrof Executive Director of the Brookdale Center for Healthy Aging at Hunter College, as well as a professor at the School of Urban Public Health, in New York City. Hunter College became the first major public institution in the U.S. to join the Global Network of Age Friendly Universities under her leadership.