In recent years there has been a trend toward large numbers of people taking early retirement. But the declines in the stock market combined with low interest rates on other savings instruments such as CDs means that instead of retiring early, large numbers of older workers now plan to work into their retirement years.
A recent survey by AARP of employed workers aged 45 to 74 showed that 69% want or need to remain working into their retirement years. About 36% plan to work part-time for enjoyment while 19% said they would work part-time for needed income. Six percent plan to continue working full-time and 10% want to go into business for themselves. About 28% plan not to work at all.
AARP’s Roper survey said America is in the midst of a population change that over the next decade will give rise to a workforce that is both older and more ethnically diverse. The trends will have a big impact on the graying of America’s workforce. While currently 13% of the workforce is 55 and older, that figure is expected to increase to 20% by 2015.
With workforce availability an important issue now and in the future, businesses that develop a reputation for treating older workers well will be ahead of the curve, says Walter Howell, AARP’s associate state director for advocacy and communications in Mississippi.
“Some companies aren’t considered employee friendly, and I think the way a company treats their employees shows the moral fiber of the company,” Howell said. “Employees are very sensitive to that. There are too many American workers who go to a ‘job,’ not a career. People need to feel they are contributing to the productivity of the company, and are making a difference. That is very self-satisfying. That is a greater incentive to employees than the financial rewards. In someone’s hierarchy of needs, being appreciated is right up there at the top.”
Howell said as long as a person enjoys going to work, and is productive at the job, there is no reason for him or her to leave the workforce. With a good organization, good benefits and vacation time, continuing to work can be very satisfying. “That has been my personal experience,” said Howell, 66, a former mayor of Clinton who worked in both the Mabus and Fordice administrations before going to work for AARP. “It is interesting to still be involved, and feel like you are still productive.”
The AARP poll said that in order to attract and retain older workers, who are expected to become an increasingly dynamic force in the economy, employers need to pay attention to both “soft benefits” such as adequate time off and flexible schedules, and hard benefits such as heath care benefits and a good pension.
Dr. Sheri L. Lokken, assistant professor, School of Human Sciences, Mississippi State University, said that remaining in the workforce can be healthy for older workers especially regarding socialization. Often older people experience painful losses of their parents, spouses, other family members and friends. Losing their work identify at the same time they have experienced many other losses in their lives can be very painful. Continuing to have interaction with work colleagues can help fill the gap.
Lokken said older workers have expertise that is valuable to younger workers, and studies have shown that older workers can perform as well as younger workers in nearly every aspect except tasks requiring hard physical labor. There are differences between older and younger workers. Some studies have shown an elderly worker in a sales position might take more time with each client, but the customer will be happier with the end result. Younger workers might be more efficient, but not as friendly.
Other advantages include reducing training costs by retaining older workers, who generally stay on the job longer than younger workers.
“Turnover rates are lower for older workers, and scheduling problems aren’t usually as difficult,” Lokken said. “Younger workers have too many classes to schedule around or other things going on in their lives. Older workers are more consistent and more stable.”
Mississippi has a lower percentage of older people in its population. It is ranked eighth in the U.S. in the percentage of people 17 and younger in the population. Because the state won’t see the increases in elderly population as soon as other parts of the country, that could be an advantage.
“We will be able to observe other states and region’s best practices and adapt them to Mississippi,” said Pete Walley, director of long-range economic development planning for the Institutions of Higher Learning (IHL). “The downside of that is we have a big group of people who have low literacy levels, and they are going to be in the workforce for at least another 20 years. That plays into a weak position compared to the rest of the world when it comes to higher skilled jobs.”
Mississippi has the lowest incidence in the country of people aged 25 years and older who go back to school for more education. That creates a “double whammy” with workers who have the lowest capacity to begin with and then are least likely to improve skills. Walley suggests that the state needs to market education and training to the state’s young adults and adults in general just like consumer products are marketed.
“We need to raise their expectations to raise demand for these various training programs our state agencies are trying to offer,” Walley said. “I think that is the best hope, to try to get our workforce more competitive.”
Another trend that hurts the state is that many people retire early instead of staying in the workforce longer and building up retirement benefits. Mississippi has one of the lowest workforce participation rates in the country. Only 59.4% of adults aged 16 and over are employed in Mississippi. For the age group 16 to 64, 70% are employed.
An estimated 450,000 adults are unemployed and not looking for a job. Most of them are at poverty-level incomes. That keeps the state at the bottom when it comes to per capita income and family income. Only 26 out of every 100 Mississippi residents aged 55 and over were in the workforce in 1990, compared to the national average of 30 workers.
“Such gaps are attributable to relatively low levels of education in Mississippi combined with relatively high levels of chronic health problems that inhibit or prevent people from working,” said Dr. Barbara Logue, state demographer for the IHL. “The central problem for Mississippi is not that our workforce is aging but that too few older workers may remain on the job.”
Logue said many Mississippi businesses are already having trouble finding and keeping skilled workers, and that situation could worsen in the future. Logue suggests that to address the situation employers should begin developing strategies for retaining and actively recruiting older workers.
There are five federally funded programs in the state that provide subsidized training for low-income older workers re-entering the workforce.
“We’re talking about people who want to work, but they don’t have all the necessary skills to get jobs in today’s job market,” said Henry Griffith, state coordinator, Senior Community Service Employment Program. “In the State of Mississippi, we have a lot of older people on very limited fixed incomes. They can use the extra funds from working to pay for living expenses. These people want jobs. They want to be productive mainly because they need an extra income to live at a semi-tolerable level.”
The older workers are trained in part-time jobs working for the government or non-profit groups and are eligible for workforce training programs at community colleges. After mastering skills, attempts are made to find the worker private employment. Groups such as
erience Work and the U.S. Forest Service also participate in the subsidized older worker programs.