The one key reason U.S. economy has beaten predictions
Three key steps for American economy to keep growing in the future
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Dickey's Barbecue CEO Laura Rea Dickey says the average age of their workers has risen from 18-24 to 40-45 and explains why hiring older employees is beneficial for business.
Population aging is set to cause economic uncertainty. Unless, that is, we are proactive in finding solutions. Over the last decade, the U.S. has grown older, faster. Thousands of baby boomers reach retirement age every day. The ratio of non-workers to workers is rising, which means our consumption needs may outpace our productive capacity and also strain the Social Security and Medicare systems.
The National Bureau of Economic Research estimates that from 1980 to 2010, each 10 percent increase in the fraction of the population ages 60 and above decreased per capita GDP by 5.5 percent. Predictions point to continued aging across the nation. This news, alongside falling fertility rates in the U.S., need not spell economic slowdown, however.
There is one key reason U.S. growth has beaten long-term predictions to date—and one key solution to doing so in the future: increased labor force participation among older workers. The good news is that many older workers are eager to keep working or to re-enter the workforce.
U.S. Bureau of Labor Statistics research tells us labor force participation has steadily increased among age groups 55-64, 65-74, and 75 and older since 2002. In fact, older workers are the fastest-growing segment of the workforce. This can be attributed to a number of trends, including higher levels of education, technological advancements like AI that can make work less physically demanding, and increasing life expectancy. Older Americans also want to work for reasons besides continued income; extended careers can provide social connectedness, a sense of purpose, a regular routine, and an opportunity to mentor younger workers.
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Much remains to be done, however, in supporting older workers who want to re-enter the workforce. The ZipRecruiter Job Seeker Confidence Index reveals older job seekers experience the greatest difficulty and confront unique challenges when looking for a job. 56 percent of older job seekers described their job search experience as poor last quarter, compared with 31 percent of those aged 25 to 34. 65 percent say employers think they are too old, and among the already employed, 50 percent want more hours.
Three steps need to be taken to raise employment rates for older workers, the often untapped asset to our workforce pipeline needs: educating employers, involving the private sector and civil society programs, and making policy improvements that remove disincentives to working past retirement age.
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Even with record-low unemployment numbers, many job openings are still going unfilled, and many older workers are struggling to find work. Business leaders need to think about the full workforce spectrum when making hiring decisions. The first step is to acknowledge commonly held misconceptions about older workers.
Some businesses may assume older workers won’t stay on the job long as they approach typical retirement age. In reality, older workers are often incredibly loyal and ready to commit to a job on a long-term basis, beyond when many expect them to retire. The median tenure of workers ages 55 to 64 is more than triple the tenure of workers ages 25 to 34, according to the U.S. Bureau of Labor Statistics. Business owners report good experiences with older workers, and research shows that incorporating older workers can lead to improved workplace culture and innovation. Employers in a recent ZipRecruiter survey said that the two most lacking skills among job candidates are professionalism and time management, soft skills that often improve with age.
The private sector and civil society also have an important role. On-the-job training or private training programs can help older workers reskill or upskill. The Center for Workforce Inclusion, alone, has empowered half a million low-income, older job seekers through best-in-class approaches to workforce development, and other programs are available in local communities across the country.
Finally, several bipartisan policy fixes can be made to encourage people to work longer. Lowering social security tax rates for older workers, crediting additional years of work towards benefits, and allowing Medicare to cover insurance for employed workers would reward—rather than punish—extra years of work. From the employer side, shifts that could encourage later retirement include pay transparency, remote and hybrid work options, and organizational shifts that promote flexibility.
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Older workers bring much-needed experience and valuable skills to our workplaces. They are also the secret to continued economic growth and improved living standards. If we remove barriers to their participation and invest in programs that unlock their potentials, we will all reap the benefits.
Gary A. Officer is president and CEO of the Center for Workforce Inclusion, which empowers older job seekers to attain in-demand skills, overcome barriers to employment and secure employment.
Julia Pollak is the Chief Economist at ZipRecruiter, an online employment marketplace that actively connects job seekers with companies of all sizes.