Cadmus

An Aging Workforce: Employment Opportunities and Obstacles

3. The Definition of Full Employment and the Possibility of Achieving it

The pooling of all social, political and economic forces and resources aimed at full employment must be the guiding principle of the new working society.41 Full employment implies a labour market where the number of job seekers and that of job openings match up very tightly, but it does not mean there is zero unemployment.42

Many economists have attempted to estimate the amount of frictional unemployment. In line with this, we can find in literature that the number ranges from 2-7% of the labour force or over 80 per cent of the working age population in employment. Societies must be able to provide jobs for all those willing to work.

There are four elements that comprise a modern definition of full employment:43

• Everyone who wants to work can find a job quickly
• No groups are excluded or disadvantaged in the labour market, i.e., it is necessary for all segments of the labour market to have the ability to have the access to work and to stay at work.
• There are opportunities for promotion at work
• Poverty at work is eradicated and there is employment for all.

Full employment is achieved, in principle, when all available resources (labour, capital, land, and entrepreneurship) are employed to produce goods and services. Achieving full employment, while promoting equality and social stability, has great significance for individuals, families, and the economy as a whole.44

When we are considering the issue of achieving full employment and social welfare, it is necessary to revise current employment theory and propose a new employment strategy. They should follow the current conditions and challenges in the labour market. That is of key importance because solutions to current crises must be found in a manner different from the one in which they were sought in the last few decades when the demographic, economic, political and other circumstances were quite different.

It is also necessary to stress the greater importance of full employment with respect to the human dimension, which mostly involves the right to work under equal working conditions. Therefore, the guarantee of fundamental principles and rights at work is of particular significance in that it enables the persons concerned to claim freely and, on the basis of equality of opportunity, their fair share of the wealth which they have helped to generate, and to achieve their human potential fully.45 Nevertheless, these rights are still not duly observed or they do not even exist and are exercised in different ways in various parts of the world. They are most obvious in the gender and age aspects. They are present in the barriers to recruiting and employing personnel, in poor working conditions, in limited opportunities for career development and in the lack of legal regulations. Age discrimination is present when the applicant’s age is taken into consideration in decision making, instead of his/her merits, experience and quality of their performance. This form of discrimination includes negative attitudes, feelings and stereotypes about elderly people. Ageism is the third commonest type of discrimination, after racism and gender discrimination. Hence, much more attention in research is paid to the issues of gender discrimination than to age discrimination. Attaining gender equality is considered to be one of the priority goals in many a country worldwide and in the European Union member states too. Equality of women and men is a common value and one of the fundamental values of the EU Member States, which stipulate the promotion of gender equality as a permanent objective of the European Community in all its activities.46 Hence, approaches to employment issues should be revised. This involves taking into account the human perspective of employment and an absence of discrimination in relation to opportunities, an allocation of resources or benefits for women and men.47 In line with this, Wray and Forstater justify the right to work as a fundamental prerequisite for social justice in any society in which income from work is an important determinant of access to resources. Similarly, the Gender Mainstreaming Strategy in Employment should be modified in such a way that it will effectively deal with the problems specific to gender equal opportunities at the global level.48 Given, however, that there are significant cultural, social, economic and other differences and that this problem is not evident in equal measure throughout the world, it is necessary that a massive campaign be undertaken and various measures and activities be taken to reduce gender discrimination. Therefore, women must work together in a common struggle to reach the same power as men, to shape the society and their own lives by having the same opportunities, rights and responsibilities.

In the process of implementing policies of gender equality and empowerment of women, non-governmental organizations and networks play an important role and offer support. Thus, it is time to derive a new concept of full employment that relies less on the old rule — the relationship between unemployment and inflation — and more on the actual experience of the marketplace.49 In addition, some scientists point out that it is very important that there is a political will for achieving full employment. In this context, the scientist Polin believes that the biggest obstacle to creating a full-employment economy is politics.50 In his opinion and in many other scientists’, the problem is not the lack of solutions, but the lack of political will. In this context, governments can save millions of jobs, as Germany has successfully done, by subsidizing employers to keep workers on the job for shorter hours, rather than laying them off.51

4. Preconditions to Employment of Persons Aged 55 and Over

Many stereotypes and prejudices related to the employment of elderly persons that employers usually exhibit to avoid employing them find no justification today and cannot be taken as valid arguments. Primarily, the demand for manual work has decreased, which suits older workers to a large extent. Similarly, due to the advances in medicine and better life conditions, the physical and mental health of elderly population have improved, which enable them to be able to work longer hours than it was possible in the past. Besides, the living style has completely changed in the last two decades. All this has led to a situation that even those who count as the richest and who can safely retire, wish to continue to work and feel useful to themselves, to their families and to their society. The poor ones are forced to work even after they have formally retired because their pensions are small and often insufficient to allow a decent life. There is also a category of people that was laid off due to the crisis, who cannot exercise their right to retirement and hence want to find a new job. The motives of elderly people to go out to work may differ; however, what is common to all of these people is that they want to be actively working as long as they are able to work. Some wish to try new jobs and start up their own firms. Here they encounter numerous barriers of different forms. Hence, we have devised a model of employment and elimination of discrimination against older workers, and set the preconditions to its implementation (Figure 2).

Figure 2: Prerequisites for Employment at older ages

markovich-fig2

This model also stresses the benefits of employing elderly people, at the individual as well as the social level. This model can also be viewed as a “communicating vessels” model, where each of the constituent parts implies and affects the other. They are all closely interconnected and act in synergy producing equal employment opportunities for everybody, regardless of age or gender.

5. Age Obstacles to Employment

Demographic changes bring about a dramatic effect upon the labour market. With the fast aging of European population and a longer life expectancy, extending working life has become a priority (Lisbon Declaration). It is for this reason that we focus on the analysis of the position of people aged 55 and over on the market as their share has increased significantly in the past decades, with a tendency to grow further in the decades to come. All indicators show that this category of people was severely hit by the socio-economic and financial crisis, which was reflected in the growth of unemployment and long term unemployment. Reasons are numerous. Some of them will be analysed later in this paper.

Primarily, the unemployed elderly population remains jobless twice as long as the overall population on average because their skills are often outdated and their salary needs are too high.52 In addition to the mentioned attitudes we find in literature, there are numerous stereotypes that pose a major barrier to employment of persons aged 55 and over. These stereotypes suggest that older workers: (a) are less motivated in learning new skills (b) are less physically active and mentally prepared to respond to the demands of their jobs (c) with low level of qualification are prevented from advancing in their career or getting a job. These stereotypes are dealt with individually.

5.1. They are less motivated in learning new skills

Gender diversity and age diversity are an asset for corporate image and help bring a company, its employees, shareholders and customers together, improve their brand image as well as customer satisfaction.53 The generation over 50 is the generation of baby-boomers, those born between 1943 and 1960. They are a hard working generation that feel the need to be valued for their contribution. The factors that motivated in the past might have changed for many. The management has to devise suitable motivation programs for this generation. Hence, motivating gender and age diverse workforce is a challenge for the management. The issue needs to be handled efficiently so that they should feel safe, comfortable, confident and satisfied. In addition, they should be treated equal to the younger workers at work. Many of the stereotypes that prevent employers from hiring and making a good use of older workers are merely myths. One of the stereotypes is that older workers are not motivated enough to learn new skills and thrive at work. This, however, cannot be taken as a general rule for all older workers. It mostly depends on managers and their abilities to encourage workers. The benefit of understanding what motivates others is important. Motivation increases productivity, quality and service. It also helps people achieve goals, gain positive perspective, create the power to change, build self-esteem and capability and manage their own development. In line with this, motivation of older workers is better if they are managed well. There is also a growing consensus that these objectives cannot be achieved without a significant improvement in working conditions.54

5.2. They are less physically active and mentally prepared to respond to the demands of their jobs

One stereotype is that older people are less physically active and less mentally prepared to answer the demands of their jobs than the younger age groups. It is our opinion that these attitudes cannot be fully accepted given that the health (both mental and physical) of elderly people is much better nowadays than it used to be in the past. Hence, they represent a valid potential in terms of labour force, skills and experience that societies need to put to productive use. Experience with “active aging” shows that older people, when integrated into the society, lead a better quality life, live longer and stay healthier. A conclusion can be drawn that integration and participation in employment are closely connected with the concept of social cohesion, a vital constituent of a healthy society. This can be achieved through a more substantial support the society should provide for this category of population in terms of encouraging them to be economically active as long as they choose or are able to be. The lack of policy that will regulate these issues leaves elderly people to live their lives in poverty instead of recognizing their active economic and social contributions. It is in this view that we can rightfully conclude that aging is a natural process, and that healthy elderly people are an important resource for their families, their communities, as well as for the economies of their countries.

5.3. Low level of qualification prevents them from advancing in their career or getting a job

This age group predominantly includes individuals with low qualifications, which is one barrier to finding a new job or being promoted in the present job.

Regardless of the fact that this category includes mostly unskilled workers or workers with low qualifications, our research has shown that the workers are ready to develop in their career and learn, but need adequate support.55 Most often, they do not receive such support. Employers are not willing to invest in the education of their employees which would in turn improve their competencies and enable them to earn more. They are not interested in investing in older people because of uncertain returns. Therefore, the lack of competencies and skills is one of the most commonly cited reasons as to why older people are generally unattractive to prospective employers.56

Figure 3: The Negative Consequences of Age Discrimination in Employment
markovich-fig3

It is therefore necessary that training programmes should be devised for this target group. In many a country, however, little attention is paid to people aged 55 and over, hence there are no adequate training programmes to help them face business challenges and succeed in their jobs. It is important that this support comes from both the state and the educational institutions simultaneously.

6. Conclusion

Many developed nations and other advanced economies such as Japan have an aging population as a result of falling birth rates and higher life expectancy. The labour market is therefore increasingly composed of older workers. Aging is a natural process and healthy elderly people are an important resource for their families, for their communities as well as for the economies of their countries. Lack of policy, which will regulate these issues, forces elderly people to live in poverty instead of recognizing their active economic and social contribution. Hence, the goal of any society should be to give people an opportunity to work and be productive as long as they wish to do so. However, there are different reasons for and attitudes associated with unemployment after the age of fifty. Some people feel it is inevitable because of their age, but others keep trying to get a job.57

Recent literature reveals that age discrimination is present when the age of applicants is taken into consideration in decision making, instead of making decisions on the basis of an individual’s merits, experience and quality of their performance. Besides, there are stereotypes about older people being less active physically and also not really capable mentally of meeting the requirements of their jobs, in comparison with younger people. Many go as far as adding other handicaps of older people, such as lack of creativity, lack of interest in gaining new knowledge, etc. It is our opinion however that the attitude employers take towards older employees largely depends on the size of the company and the type of job, the gender and the age of employers themselves. Smaller firms have proved to be more willing to employ older workers. Given that older workers are the most flexible as regards accepting part-time jobs and that they are highly ethical and loyal to their employers, as recent research has shown, the attitude towards them is expected to change gradually which in turn will make these people more eligible for work.

Recent research also shows that mostly people who are aged 50 and over and are not in employment would, however, prefer to be in work, and are often living on incapacity-related benefits. Therefore, it is necessary to find new opportunities in the labour market for the economically inactive population aged 50 and over if the goal of full employment is to become a reality. The employment rate for these people is associated with improved economic prosperity and labour market structure and movements. Labour markets are in a continuous state of change as a result of long-term demographic trends shaping the composition of labour supply. Hence, it is necessary that new solutions be found to the problem of employment of older workers. Primarily, there are certain preconditions that need to be satisfied in order for elderly persons to be employed, that is, the qualification level of this segment of population is to be raised, measures are to be undertaken to encourage self-employment, any forms of discrimination are to be abandoned and equal conditions for work and employment for all age groups are to be created. In line with this thought, this paper proposes a model that offers a basis for stimulating employment of persons over 55 years of age. This model can be understood as a “communicating vessels” model. All its constituent parts are closely interconnected and their synergy results in creating equal opportunities for employment for all, regardless of age or gender. Only when these conditions are created can a significant progress be made towards attaining full employment. It is for such reasons that a number of academics maintain that the role of state policy is of predominant importance in the present times of high global unemployment; they also consider the fast growth rate of the elderly population whose share has permanently increased in the labour market in the last few decades. Many are of the opinion that the experience of Germany can help to a significant extent, as the country managed to increase the number of employees and attain full employment by shortening the working hours of its employees and hiring workers on a part-time basis. A lower number of working hours did not result in lower wages, as the state subsidized the difference. Such forms of subsidies, however, cannot be expected in countries with a budgetary deficit, so they have no sources out of which the difference in earnings can be financed. One opportunity for these countries is to tax the rich and use those revenues to help older groups through job creation programs or wage subsidies. But while we do need a more progressive taxation to meet revenue needs, this is not a long-term solution. It is for these reasons that other solutions need to be sought. During times of elevated joblessness, like the present time, stimulus measures such as infrastructure investment and fiscal aid to states could help us get closer to full employment.58

41. Hilmar Schneider and Klaus F. Zimmermann “Agenda 2020: Strategies to Achieve Full Employment in Germany,” Institute for the Study of Labor Policy Paper No. 15.
42. Jared Bernstein, “The Case for Full Employment,” Rolling Stone Politics http://www.rollingstone.com/politics/blogs/national-affairs/the-case-for-full-employment-20120309
43. Adams, Towards full employment.
44. Robert Pollin, Back To Full Employment (Boston: The MIT Press, 2012).
45. “ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up” ILO.
46. Radović-Marković, “Critical Employment Analysis: Theory, Methodology and Research”.
47. World Health Organization (WHO), Mainstreaming gender equity in health: The need to move forward – Madrid statement (Geneva: WHO, 2002).
48. World Health Organization (WHO), Mainstreaming gender equity in health.
49. Jared Bernstein and Dean Baker, The benefits of full employment : when markets work for people (Washington, DC: Economic Policy Institute, 2003).
50. Pollin, Back To Full Employment.
51. Mark Weisbrot, “The Crisis Can Be Solved–If the Government Wants to Do It Full-Employment and Political Will,” Counterpunch http://www.counterpunch.org/2012/07/09/full-employment-and-political-will/
52. Gregory Viscusi and Lorenzo Totaro, “Retirement No Option for Older Workers in Europe’s Crisis,” Bloomberg Businessweek
16 October 2012 http://www.businessweek.com/news/2012-10-16/retirement-no-option-for-older-workers-in-europe-scrisis#p2
53. “Women Matter: Gender Diversity, A Corporate Performance Driver,” McKinsey & Company http://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Organization/PDFs/Women_matter_oct2007_english.ashx
54. “Sustainable work and the ageing workforce in Europe” Eurofound.
55. Radović-Marković, “Education System and Economic Needs in Serbia” in Collected papers: Active measures on the labor market and employment issues.
56. Hana Doleželová, Politika zvyšování míry zamestnanosti starších osob v Ceské republice (Praha: Univerzita Karlova, 2007).
57. Mirjana Radović-Marković and Imani Silver Kyaruzi, Female Entrepreneurship & Local Economic Growth (Colorado: Outskirts Press, 2010).
58. Bernstein, “The Case for Full Employment”.

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