From the age of labour to the labour of age
Terry Robinson is about three-quarters of the way through his second apprenticeship. His first, when he was 15, was as a carpenter and joiner: now he’s building the skills to attain supervisor status in retail.
He will be 71 in June.
Based near Oxford, England, he is in a minority of people who are not only still working, but also acquiring new skills as they head towards their 80s, Europe’s fastest-growing age group.
Europe’s policymakers hope workers his age and younger can serve as models for the citizens of an ageing society.
In Paris, 63-year-old Carole Avayou would like to join that group. A technician with Air France-KLM since 1978, she had just turned 60 when she was served notice of compulsory retirement. She has taken her fight for work to court, after a vain protest including locking herself in the office.
“(I wanted them) to discuss things with me, hear my arguments. I put a piece of furniture behind the door and jammed the handle,” she said by telephone.
These two stories show the contradictory realities facing older people in Europe as the continent hits a demographic milestone. This year, the number of people aged 60-65 will start to exceed the 15-20 year olds who traditionally replaced them in the labour force, according to a Eurostat data cited by Allianz.
If Europe’s economies are to grow, older people will have to work for longer. But in a weak economic climate, not many employers want them.
A demographic cliche about China is that it will get old before it gets rich. The risk for Europe is from its richest generation, the ones who as young adults may have smoked Gitanes or sung “I hope I die before I get old” with The Who.
Having saddled their countries with debts, there’s a strong chance they will lack the wherewithal to fund the “silver” consumer lifestyle typified by America’s high-profile retirees. Instead, they risk forming an ageing, stagnating bloc which further cripples its economies with the burden of their care.
“We are running into a serious financial problem combined with an ageing and – in countries like Germany – a shrinking society,” said Reiner Klingholz, director of the Berlin Institute for Population and Development.
“It will be very difficult, probably impossible, to generate overall growth.”
Europe is the world’s fastest ageing major region. If it is to avert a future of decline and generational strife, economists say the only thing the old continent can do is adapt – radically.
Klingholz and others argue that if Europe can face up to and resolve its demographic deficit first, the region may be well placed to capitalise on its experience as countries like China and South Korea run with only a short timelag towards their own, far more rapid, phase of population ageing.
China’s rise is driven by a population boom which preceded Mao’s one-child policy, but that has also created a major labour-force gap that’s now only a few years away.
“China will be in deep trouble in 15 to 25 years,” said Klingholz.
But how on earth is old Europe, with its 8 trillion euros of debt, industrial age attitudes and dyed-in-the-wool labour structures, to reach this brave new world?
This article looks at the problems.
POLITICS AS USUAL
What may surprise Europeans is the fact that, at least in some countries, the demographic deficit is not a new issue.
Consider these comments from a report by a British government taskforce which examined the shape of the workforce in the context of a fast-ageing society.
“We face a need for quite radical changes in long- established attitudes towards the older worker and retirement,” the report said. “The change in structure of the population requires a similar change in structure of the working population.”
That report was dated September 11th, 1953.
At that time, Britain found the solution to its labour force needs in married women working part-time and a wave of immigrants who, particularly in the 1960s, fuelled the post-war growth that helped fund today’s pensions.
“Sometimes I feel as if I’ve been going round and round and round this,” said Bernard Casey, an economist and public policy analyst at the Institute for Employment Research at Warwick University, who has been working on age and employment for the last 30 years, in the UK, in Germany and for the OECD.
Even in Britain, which researchers have found to be relatively accommodating of older workers who are more often unable to afford inactivity, Casey’s experience points to a lack of strong political will to persuade employers to keep older workers, who are typically expensive, in employment.
He notes even Britain’s government suggested early retirement as a cost-cutting solution in a major 2004 review.
He also recalls how Norbert Bluem, a former German minister for labour and social affairs, steered an early retirement law through parliament in 1984 and appealed to older workers to take advantage of the opportunities “in the interests of the unemployed and of younger people”.
A few days later, this time in his social affairs role, he was appealing to Germans to work longer “in order to protect the long-term sustainability of the public pension system”.
“It is the contradiction between the short and the long term which is what we spend all our time worrying about,” Casey said.
One might expect that as the proportion of employers facing a labour shortage increases, and more older people realise they need to keep working to build up an adequate pension, the issue would climb up the political agenda.
Voter turnout of the over-50s exceeded that of the under-50s in Europe in 2005, by between 1.02 to one in Norway and 1.41 in Portugal, according to a study published last year by the World Economic Forum.
The over-50s are already in the majority in Finland and Switzerland, the report said, and will be in France and Germany in 2015. The United Kingdom, where over-50s will make up the majority in 2040, will be last in the voter-ageing wave.
“If on the one hand, you are expected to work longer but on the other you don’t have the chance to, I think there will be an increasing mood of dissatisfaction,” said Michaela Grimm, senior economist at Allianz. “The pressure will rise.”
Casey is sceptical.
“Governments feel much more vulnerable about young people than they do about old people,” he said. Youth unemployment in Europe at around 20 percent in the wake of the financial crisis is a more pressing political burden.
EFFORTS SO FAR
Part of the problem might stem from different perceptions of age. Where in some industries, the phrase “too old to work at 40″ can still resonate, when politicians deal with “old” people they tend to address the concerns of the elderly.
People like the shop worker Robinson, who took up his current job after retiring from a mobile home company at 68, do exemplify moves towards the goal of retaining older people in the workforce.
“I was quite convinced I wasn’t going to retire and sit behind the curtains watching the world go by – people who do that don’t seem to last very long,” said Robinson, who works around four mornings a week in a home improvements store.
The European Commission has targeted a 50 percent employment rate for older workers by 2010, up from 45 percent in 2007. That average conceals very wide variations across the region, from around 13 percent in Hungary to 63 percent in Sweden, according to Allianz.
The participation of older workers has increased in recent years – particularly in part-time jobs for men like Robinson, whose employer, retail chain B&Q, has for decades made a public point of its enthusiasm for older staff.
But even though Robinson is not the company’s oldest employee – 95-year old Sydney Prior works one morning a week – only 28 per cent of its employees are aged over 50, which as a proportion is short of their increasing number in society.
“The recent recession has in no way affected or changed our employment or retirement policies when it comes to older workers,” said Leon Foster-Hill, B&Q’s Diversity Adviser.