A report by the Gerontological Society of America (GSA) argues that as the longevity era develops, actions are needed now to address ageism and age discrimination, develop coherent policies and laws regarding retirement and pensions that recognize people are living far past the historical retirement age of 65, and enhance the economic impact of older workers and retirees at the local, regional, state, and national levels.
What is a super-aged country?
A “super-aged” country is one where more than 1 in 5 people are aged 65 or older. Japan and Germany are already super-aged. By 2030, the USA, UK, France and Singapore will all be super-aged.
What policies have been tried?
The GSA’s report highlights the approach that Japan, Germany and Singapore take towards their ageing population and discusses from America can learn from their experiences.
Japan has a very low birth rate and long life expectancy. At 84, it’s one of the highest in the world. The population is officially shrinking: more Japanese people are dying than are being born.
Many Japanese people are working past the retirement age (officially 62). Retirees can find part-time jobs through a public–private partnership, the Silver Center Workshops. This program offers low-paying jobs—only about $400 to $500 per month (in U.S. dollars)—in low-skilled areas such housecleaning, park maintenance, and bicycle repair.
Other initiatives in Japan include supplementation of family care of older adults with a universal social long-term care insurance system, encouragement for women to re-enter the workforce, and a “robot revolution” that will incorporate automation extensively to counter the effects of a declining workforce.
Germany has adopted a “high tech strategy”. Although not specifically targeted at older workers, the strategy benefits this age group. Among the forward-looking projects launched during a recent legislative period were “better health via effective prevention and healthy diets” and “living an independent life well into old age”.
“Initiative 50 Plus” is another German innovation designed to increase participation of older workers in the labour market. Implemented in 2007, this program aims to encourage older workers to stay in, or return to, the labour market. The program provides training and lifelong learning to older people and compensates older workers who accept positions with lower salaries through a temporary benefit.
In just 27 years, Singapore has gone from having a young society to an old one. In 1999 just 7% were over 65; by 2026, 20% will be.
Unlike the reticence in Japan to take stronger actions in reaction to a rapidly aging society, leaders in Singapore have moved quickly to minimise adverse effects. Singapore has developed a 70-item initiative, “The Future of Aging,” with the intent of taking positive actions in 12 areas: health and wellness, learning, volunteerism, employment, housing, transport, public spaces, respect and social inclusion, retirement adequacy, health care and aged care, protection for vulnerable seniors, and research.
Legislation came into force in 2017 which helps those workers that want to stay in employment to do so. Employers must offer re-employment to employees reaching the retirement age of 62, and continue to renew employment up to the age of 67. If an employer is not able to offer a position to an eligible employee, they must be transferred to another employer or alternatively offer a one-time assistance payment. The new law helps employers to exploit a growing pool of older workers. There are tax breaks for employers who hire anyone aged 65 or older through a 3% offset of the employee’s monthly wages. Singapore has also raised the re-employment age after retirement from 65 to 67 and removed the ability of employers to cut employees’ wages at age 60.
The GSA argues that a combination of policies is likely to yield the best results, including looking at the retirement age and tax policy, linking the retirement age to years of expected life, re-employment/re-contracting, education and skills building, wage and tax adjustments, and pension changes.
The GSA notes the success of tax incentives to encourage employment of older workers and recommends that this be an area for Congress to consider.
The pension age is another area that the US should address. The GSA notes the recent decision by Norway to more strongly link pension age to life expectancy. In the US, the social security age is not rising at a fast enough rate and action is needed.
The GSA advocates for increased phasing of retirement. The notion of a fixed retirement date should (ironically) be retired itself. Depending on their profession, people may need to retire earlier, but may wish to keep on working into their 70s and beyond. They may also wish to drop down from a full time role to a part time role. Policies are needed to make this easier for both employees and business.
The GSA says that re-employment of older workers needs policy attention. Policy approaches in this area would include supporting continued or renewed employment options for older adults and providing tax or other incentives to employers who bring older adults into their workforces.