Why are so many older workers staying on the job years longer than their forbears? The reasons are no doubt highly individual. Some are working longer because they have to, but many are doing so because they choose to: their jobs give them a paycheck plus the satisfaction of being valued for their skills. That’s why the Bureau of Lanor Statistics estimates that the employed population of the U.S. includes some 23 million workers over 60.
The fact that so many older workers remain gainfully employed is great news for them – but it may not be so good for the younger workers trying to climb the ladder behind them. Recently we came across this opinion piece from the Washington Post, written by columnist Aden Barton, and originally published late last summer. Barton – definitely on the younger side – argues that older workers who remain on the job create barriers for their younger peers. With five generations in the workforce, says the Post, it’s harder for beginners to get hired or promoted.
Let’s take a look at Barton’s point, and what he suggests as a remedy.
Working Longer: Many Older Workers Postpone Retirement
To begin his article, Barton evokes some famous octogenarians who have expressed no intention of retiring anytime soon, like Paul McCartney and Al Pacino. They are very famous faces representing a growing trend of aging workers choosing to postpone retirement because they don’t want to quit.
“As a result,” Barton writes, “the U.S. workforce is now packed with five generations — from the silent generation down to Gen Z.”
While Barton notes that there are benefits to having so many experienced workers still active in their careers, it can be a major hurdle for younger workers. “The career ladder has become crowded at the top, and this dims professional prospects for those at every rung below,” he explains. “Young workers find it harder to launch their careers and to get promoted.”
Additionally, according to economists Gabriele Guaitoli and Roberto Pancrazi who study this issue, this “demographic traffic jam” can also harm societal cohesion by leaving younger groups behind.
Idea of a Long Retirement is a Relatively New Concept
With notable irony, Barton observes that, “For most of history, a worker’s ‘retirement plan’ was simple: death.”
However, he continues, this somber reality began to change in the 20th century when increased wealth in America and the creation of Social Security enabled workers to leave the workforce earlier and earlier. This trend didn’t reverse again until the 1990s.
Barton explains, “The age at which Americans could access their full Social Security payments was raised [gradually] to 67 in the 1980s, and many companies stopped offering pension plans. Workers often had to stay in their jobs longer to make ends meet. But many alsodid so voluntarily. Longer life expectancies and easier working conditions made this choice more attractive.”
As a result, in 1990 about 10 percent of the labor force was made up of workers over 55. Today, this share is about 23 percent. The expectation is that it will hover around this number over the next decade.
Working Longer Creates a “Multigenerational Traffic Jam”
Since Barton’s column uses the phrase “multigenerational traffic jam,” we wanted to see where that idea came from. In 2019 Paul Davidson coined the phrase in an article in USA Today. Even five years later, the idea still resonates.
“There’s a multigenerational traffic jam on the upper rungs of America’s career ladder,” Davidson wrote. “As more baby boomers put off retirement, millennials and Gen Xers are finding it harder to move up into middle- and higher-level jobs.” That was according to a USA TODAY/LinkedIn survey and interviews the periodical held with recruiters.
“Partly as a result, many younger workers are job-hopping as they seek bigger titles and higher pay,” USA Today observed. “That’s making it tougher for companies to hold onto promising employees and hurting their businesses in some cases, the survey shows.”
“This is the first time ever that five different generations are in America’s workforce at the same time, from Gen Zers up to baby boomers,” LinkedIn career expert Blair Decembrele told Davidson. “It’s no surprise that there are some growing pains.”
Income Gap Between Age Groups Traced to “Generational Gridlock”
One of the signals of the workplace population shift is a growing income gap between older workers and younger ones. Economists Nicola Bianchi and Matteo Paradisi found that neither income inequality nor changes in types of jobs is at fault. “Instead, it has to do almost entirelywith generational gridlock,” Barton concludes.
With older workers staying in their jobs longer, younger workers start off in comparatively lower-paying positions and move up the ladder more slowly, often having to wait decades for promotions. “In academia, for instance, young professionals now spend years in fellowships and postdoctoral programs waiting for professor jobs to open,” Barton writes.
The increased waiting for career advancement has the added effect of inspiring worry in younger workers that they might never be able to afford homes or children.
“This creates problems for companies, too,” Barton adds. “By the time their youngest employees reach the age of leadership, they will have spent less time than their predecessors did managing other people.”
Proactive Steps Required to Ensure a Balanced Workplace
Barton is quick to remark, “No one wants to force older workers out of jobs. (All generations enjoy Al Pacino movies.)” But, he says, there needs to be a better balance struck between the retaining of older, more experienced workers and nurturing the younger ones.
“This won’t be easy,” he writes, “but here are a couple of ways to start.”
The first suggestion he gives is to encourage more start-ups. “In new businesses, younger workers move up relatively rapidly to leadership roles,” he explains. “Just look at Silicon Valley’s 20-year-old CEOs.”
He does add that the recent post-pandemic boom in Americans starting businesses is looking encouraging on this front. “There aren’t a lot of levers that policymakers can pull to incentivize more start-ups, but it would help to make it easier to obtain small-business loans and to further reduce regulatory barriers,” he writes.
Businesses Benefit When Youthful Energy Meets Older Experience
Barton invites businesses to take action, as well, by allowing younger employees to assume more responsibility even as their older colleagues stay on the job. “This means creating more tiers for young people to advance — as the legal profession now does with its associate tracks — and moving senior talent into mentorship and training roles,” he writes.
Barton concludes that “generational gridlock” in the workplace is probably not going anywhere. But that could be an opportunity.
“There’s money to be madefor companies and countries that figure out how to keep older workers involved without shutting out young talent,” he concludes. “For recent graduates entering the labor market, all solutions will be welcome.”
Rajiv Nagaich – Your Retirement Planning Coach and Guide
The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public. Retirement: Dream or Disaster joins Rajiv’s ground-breaking DVD series and workbook, Master Your Future, as a powerful planning tool in your retirement toolbox. As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.
You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.
Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.
Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.
Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important message. And remember, Age On, everyone!
(originally reported at www.washingtonpost.com)