PENSION CRISIS: Businesses urged to hire older workers
19th Oct 2017
OLDER WORKERS: A new report from the Regional Australia Institute revealed discrimination against older works aged 55-64 will slow economic growth and put enormous strains on the taxpayer.
by Alison Paterson
NORTHERN Rivers businesses should look at employing older workers to benefit from skills, experience and help narrow the retirement savings gap.
A new report from the Regional Australia Institute revealed discrimination against older works aged 55-64 will slow economic growth and put enormous strain on the taxpayer.
The Report said lower growth, lower incomes and a higher welfare and services bill are the results for regions such as coastal towns, who overlook engaging older people in the workforce.
The RAI’s new research on ageing and the workforce in regional Australia, said the age pension makes up the biggest share of Australia’s social services budget each year, accounting for $45 billion in 2016-17.
By 2021, it’s estimated to increase to just over $51 billion and the World Economic Forum has warned without proactive measures, Australia is one of eight countries facing a looming pension crisis.
“Driven by our growing older population, it is a preview of what the WEF describes as a widening retirement savings gap – where the expectations of average annual retirement income needs won’t be met by our current system,” the report said.
“An increase in employment means people have more money in their pocket to spend on goods and services, in turn growing local businesses who can employ more people (and) this virtuous cycle is key to economic growth.”
Age Discrimination Commissioner, The Hon Dr Kay Patterson AO said it is vital to ensure areas offer opportunities to older workers.
“There are many older Australians who are willing and able to work, but are often overlooked as candidates,” she said.
“It is important that society push back against discrimination, and allow older people a place in the national workforce so they too can enjoy the dignity, purpose and independence that work brings.”
According to RAI chief executive Jack Archer, the impact of a silver workforce are not yet fully understood.
“We don’t yet know how to deal with the impacts of a really aged workforce,” he said.
“We say let’s test the options in the places already experiencing the issues, help them to make progress, and prepare Australia properly for the wider (pension) crisis that is coming nationally.”
Mr Archer said it’s is also critical to capture older spending power locally.
To do this regions will need to ensure that local businesses are attuned to older consumers, he said.
The RAI report noted, as consumers reach this age, there is a shift away from material goods into spending on services.
“Most businesses have yet to fully appreciate this market, either by underestimating how much they spend or failing to see value in tailoring their approach to older consumers,” the report said.
In the Report, the Northern Rivers was listed as a region with a combined high proportion of older residents and older in-migration (people who had moved to the area.)
The report revealed Byron which has workplace participation rates of 55 to 64 years olds at around 57 per cent, has 1.5 person employed in a part-time role for every full-time role.
The Report said the availability of part time work in regions can often be an important factor in keeping an older workforce engaged.
As Australians approach retirement age, the opportunity for more flexible working arrangements opens up new opportunities for older workers who want to stay engaged in the workforce but scale down at the same time
For many, the inability to scale down to a part time role often means having to drop out of the workforce completely
And there’s significant diversity in the contribution of older workers to regional income, because in dollar terms, the older workforce share of incomes can be substantial.
Whether working full time or part time, older workers are a significant part of most regional economies, a better pay also comes with experience meaning earning capacity often peaks over 50.
This translates into serious economic muscle.
Mr Archer said when older workers are earning an income, their pension bills will either disappear or be much lower and the government (and the taxpayer) will benefit.
Source: Northern Star
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