Posts Tagged “mature age workers”

Ron Di Giorgio in his home in Newcastle, NSW

Walk into Ron Di Giorgio’s house in suburban Newcastle and the first thing you’ll notice are the knick-knacks and curios covering every flat surface of the house: the kitchen table, the coffee table, even the stairs. There are samurai swords, art deco signage, a gramophone, vintage children’s toys. Ron says he’s always been a collector, but after losing his job 12 months ago, he now has to sell some of his collectibles as a source of income.

“I’m not looking to make a huge amount of money on stuff, I just want to turn it over and make a little bit,’ he says. “That’s what keeps me going.”

Di Giorgio, 52, has worked for over 30 years as a maintenance electrician. For the last 10 years, he did contract work in the mining and manufacturing sectors. However, when the last project he worked on was cancelled, all the contractors on the job were sacked. Since then, it’s been a struggle for him to find work.

“It’s not for a lack of trying,” says Di Giorgio, who estimates he’s sent out over 250 resumes in the last year. “I started off really pushing for work but after eight or nine months of doing that, I was over it. I’m just sick and tired of doing it, because there’s no one out there who wants you. I haven’t had one call back,” he says. “It’s depressing. It gets to you.”

Di Giorgio is on Newstart, but it doesn’t cover all his expenses. Selling his collectibles at the weekend markets and doing odd handyman jobs for family and friends are the only things keeping him afloat.

“I keep the bills away. That’s all I do. The dole, the $250 a week, that’s my house loan and little bit left for petrol. I have no money for food and no money for bills,” he says.

Di Giorgio has a partner, Judy, but they don’t live together. Judy works part-time and is on a pension. She looks after Di Giorgio by making him dinner every night but it’s difficult for her to support the both of them. Di Giorgio also has two daughters, 22 and 18. While they’re adults, both still need to occasionally rely on him for support as they study and begin their careers.

“They still need money, they still need help. You don’t lose that responsibility. That’s another stress that goes onto you, you sort of feel like you’re not doing your job, by not looking after them.”

The unemployment rate in the Hunter Region is the highest in NSW, at almost 12 per cent, with Newcastle and Lake Macquarie sitting at 8.4 per cent. “The number of people getting sacked at the moment is just incredible, especially electrical,” says Di Giorgio.

Disadvantaged by age

Di Giorgio thinks his age puts him at even worse disadvantage in this already tight market. “When I was in my 20s or 30s, I could pick up a job next week. These days I don’t even get asked,” he says.

As part of the requirements for Newstart, Di Giorgio has had to apply for jobs outside of the electrical field that he may also be eligible for. Recently Mission Australia, a Job Services Australia provider, called Ron with an opportunity to do some labouring work on a residential building site. He accepted. However, later that day, they called him back to withdraw the offer, saying the employer thought he didn’t have enough experience.

“What experience do you need to shovel a bit of dirt, really? They look at the fact I’m 52 years old. They want young blokes who are fit, who will break their backs for them. Maybe I won’t. They don’t know you until you work for them, until they give you an opportunity,” he says.

The stress and pressure of looking for work has taken it out of Di Giorgio. After 12 months of looking for full time work, he’s all but given up. “I don’t care anymore. If I make a bit of money here and there just to live, that’s enough. I’ve given up looking for work, because I know there’s none.”

Di Giorgio says he would happily work for at least another 20 years if he was given the opportunity. “It’s a joke, talking about retiring people at 68 to 70 years old. That’s wonderful if you’ve got a job that’ll take you there. But most people won’t have a job that will make it that far.”

Barriers for people over 55

Tim Adair

A 2014 study by the National Seniors’ Productive Ageing Centre found that 96 per cent of people aged 55 to 59 who were retrenched ended up retiring. One cannot assume that these people would have retired anyway. The figures seem to reflect the difficulty of finding work at this age.

“The average number of weeks for an unemployed person aged 55 and over to find work is 67 weeks, while for an unemployed person aged 15 to 54 it’s just 38 weeks,” says Tim Adair, director of the Productive Ageing Centre.

“There are certainly a number of barriers that people over 55, or even younger than that, face when looking for work.”

Those over 55 are the most likely demographic group to face long-term unemployment in Australia. From a global perspective, fewer 55 to 64 year olds work in Australia than in the US, UK, Canada and New Zealand.

Discrimination on the basis of age is one major barrier to workforce participation. A recent study by the Australian Human Rights Commission found that over a quarter of Australians aged 50 years and over had experienced some form of age discrimination in the last two years.

Discrimination was most likely to occur when looking for paid work. Nearly three in five job seekers reported being discriminated against and of that figure, a third then gave up looking for work.

Susan Ryan

“It’s very clear that subjecting people to any kind of prejudicial behaviour and attitudes day in and day out will certainly destroy their sense of morale and their capacity to be productive workers,” says Susan Ryan, the Age Discrimination Commissioner of Australia.

The Human Rights Commission’s study found many employers and recruitment agencies told candidates they were too old for the job, despite the fact it is illegal to do so.

However, indirect or subtle forms of exclusion were most common, such as candidates being told that they are “over-qualified” or being the butt of jokes about their age. Other forms of discrimination, such as not considering candidates at all, are harder to measure.

Ageism rife in recruitment

Both Susan Ryan and Tim Adair note that the recruitment sector, in particular, is notorious for ageism.

“I’ve had conversations with recruiters who say, ‘we’re only sending employees under 50, because we know that’s what the employer wants’. Then when you discuss that with the employer, they will say ‘no, we didn’t send that instruction’,” says Ms Ryan.

Another study by the commission found commonly held stereotypes about older workers were that they were inflexible, unmanageable, short-tempered and forgetful.

Attorney-General George Brandis requested the Human Rights Commission undertake a national inquiry into employment discrimination on the basis of age. The inquiry, called Willing to Work, is part of a larger plan by the government to address the economic challenge of the ageing population and promote increased participation of older Australians in the labour force.

According to the 2015 Intergenerational Report, by 2055 the number of the population over the age of 55 will more than double. This has implications for tax, infrastructure and services. However, these potential strains on the economy are predicted to rectify themselves if older workers continue to participate in the workforce.

The focus on increasing older people’s economic participation is not without warrant. Modeling by Deloitte Access Economics for the Human Rights Commission has shown that a 5 per cent increase in workforce participation for workers over 55 would contribute an extra $48 billion to Australia’s GDP.

“The business case for looking at experienced workers is very strong. If you’re excluding people who’ve turned 50 or 55 just because of their age, then you’re excluding a lot of talent, a lot of experience, a lot of corporate knowledge,” says Ryan.

“We bring in many overseas workers on working visas of one kind or another and yet we have this huge pool of experienced workers who are being left out of things.”

Government initiatives

As part of a push to boost the number of older workers, successive federal governments have sought to raise the pension age. Current law will see eligibility lifted to age 67 by 2023 and the current Federal Government has proposed it be raised to 70 by 2035. This will see the need for many to remain in the workplace for longer than they would have previously.

Ryan sees the need for these changes. However, she warns of dangers to the taxpayer if employers’ attitudes towards older workers don’t change in line with it.

“If you lose your job in your 50s and never get another one, you could spend 40 years or more living on government benefits; first the unemployment benefit and then the age pension. And if you’ve stopped working at that age too, then you are unlikely to have substantial superannuation, particularly women. It’s a very grim outlook,” says Ryan.

In 2014, the Federal Government introduced a wage subsidy called “Restart”, offering $10,000 over two years to employers who hired employees over 50. The employees must have been unemployed for over six months. By April 2015, it was reported that only around 700 people had been employed through the scheme. As part of the 2015 budget, the Government will shorten the amount of time to receive the subsidy to one year.

Ryan says the Restart program has the right intention and that $10,000 could be quite attractive to small and medium size business. However, she says that money would probably make no difference to larger corporations.

“I’ll be interested to hear from employers whether they see a case for wage subsidies or tax incentives. I’m not at this stage convinced that’s the direction to go in,” she says.

Ron Di Giorgio says that the Restart incentive is aimed at the wrong target. “I reckon they should give that money to me, so that I can retrain to get another job. It’d give me an opportunity to find other work. I can’t get work in my industry because there’s none,” he says.

Di Giorgio says there is lots of work available for truck drivers. However, the cost of sitting for a heavy combination licence is around $2000. He says he’d be interested in getting into the rail industry, but he can’t do that without a Rail Safety Induction card, which costs $250. While that may not seem like much to some, it’s more than Di Giorgio has spare.

“For the opportunity to try a job, you’ve given up every bit of money that you’ve got. You can’t risk that. I’m not prepared to risk that,” he says.

Ideas to bring about change

A skills program is one proposal that Ryan plans to put to government as part of the Willing To Work inquiry. The proposal, called Checkpoint, will allow those over 50 to visit a TAFE or vocational training institute to get a skill assessment. Ryan says this will be particularly helpful with future career planning for those who may need to change sectors in order to continue working as they age. This may include those who may need to move to a less physically demanding job or move out of an industry where jobs are becoming scarce, such as car manufacturing.

“I think if we had a concentrated effort at midlife and made it easy and straightforward for people to have a look at their own retraining needs, we’d see a much better result,” she says.

Through the Willing to Work inquiry, Ryan will also receive other ideas for proposals from employers and labour market specialists about what really needs to change. The inquiry was due to report on its finding midyear.

“Having a job in our sort of society is an absolute building block for having self confidence, economic independence, networks of friends, a sense of person and a sense of making a contribution,” says Ryan. “We value jobs. We say that everyone has the right to work. And if people don’t have jobs when they want to work, you can see the devastation that they go through.”

However, what it will take to change employers’ attitudes about hiring older workers remains a million, or indeed, billion dollar question.

Source: Australian Ageing Agenda

Working beyond 60: older workers optimistic about later retirement

The days of retirement at 60 are becoming a memory for many, with 72% of older workers now willing to stay in the workforce for longer and 71% feeling optimistic about the idea.

These findings come from a new report from Financial Services Council and Commonwealth Bank of Australia, Older Workers Report 2015, based on a survey of 500 Australians aged between 50 and 74.

72% of respondents said they were keen to continue working regardless of their financial situation. But financial security is the most-commonly cited reason for wanting to work until later in life (61%). 23% said they did not have enough money to retire.

Other top reasons for working later include personal enjoyment, a sense of accomplishment, and freedom and independence.

The findings come following the Federal Government’s Intergenerational Report, released earlier this year, that outlines that Australians will continue to have one of the world’s highest life expectancy rates, with a projection that 40,000 people will be aged over 100 by 2055.

The Intergenerational Report says over-65s will increase from 12.9% of the workforce this year to 17.3% in 2055.

The Older Workers Report found one in three people between 60 and 64 expect to work for another five years, but just 10% expect to do so for another 10 years.

Age discrimination is declining  

The report found age discrimination towards older workers more than halved to 13% in this survey. In 2012, the figure was at 28%.

Financial Services Council CEO Sally Loane says: “We are beginning to see a positive shift in how society and the workplace values older workers. Employers are increasingly embracing the unique skills and experience that older workers contribute and are introducing programs to train and retrain mature staff.”

61% have taken up training or upskilling services after being offered them at their workplaces. 41% expect to be paid the same as any equivalent employee.

17% of older workers have been made redundant since turning 50, with males more likely than females to apply for another job when this happened.

69% of older workers have not applied for a new job since turning 50.

Nearly half of the survey respondents reported experiencing no barriers to continuing to work.

Changing attitudes towards retirement

65% of older workers are satisfied they have sufficient funds to retire, an increase from 50% in 2012.

55% would prefer to work part-time for the remainder of their time in the workforce. One in three say workplace flexibility will encourage them to continue working.

Commonwealth Bank general manager retirement Nicolette Rubinsztein says:

“Australians’ attitudes towards retirement are changing. No longer is the road to retirement such a defined path but providing older workers with the support and flexibility to continue working until the time is right for them to retire and for reasons they choose.

“Flexible working arrangements have played an important role in encouraging older workers to stay in the workforce, allowing them to maintain a healthy work/life balance and provide the freedom and financial means to attend to their personal and family needs.”

Source:  Marketing

It’s the latest thing in retirement: not retiring. More workers are planning to continue in the workforce past age 65, and some plan to never retire.

Nearly 60 percent of 50-plus workers plan to continue working past age 65, and 82 percent of workers age 60 and over have the same goal, according to a white paper published in June by the Transamerica Center for Retirement Studies.

Workers’ plans could represent a healthy trend in light of researchsuggesting that mental stimulation helps delay cognitive decline. But old workers will only be able to follow through on those plans if employers are in fact ramping up en masse to accommodate them in later life.


That is not the case, at least not yet. Just 4 percent of the employers responding to a 2014 survey by the Society for Human Resource Management reported that they have a formal strategy for recruiting or retaining older workers. And research by JP Morgan found that while 67 percent of all current workers expect to retire after age 65, in reality, just 23 percent do.

Labor force participation by older workers is increasing, but “workers’ expectations may exceed today’s labor force realities,” said Catherine Collinson, president of the Transamerica center.

The problem is particularly acute for women, since they tend to accumulate less in retirement savings and they have longer life expectancies. A new report from Sen. Patty Murray, D-Wash., found that the average income of women over age 65 is just 55 percent of men in the same age bracket.

“Women face systemic barriers that hinder their ability to access a secure retirement, barriers that begin long before they reach the retirement age,” wrote Sen. Murray to her colleagues on the Senate Committee on Health, Education, Labor and Pensions.

That’s not to say that all employers have their head in the sand. In fact, one major industry, health care, often dominates lists of the best employers for older workers. (In addition, women make up about 80 percent of the health-care workforce.)

Ann Doshi, a nurse educator at Morristown Medical Center in New Jersey, is still going full steam at “65-plus,” as she puts it, or just shy of 66. Doshi has been working in operating rooms for 40 years, first as a scrub technician, then as an operating room nurse, and now as an educator for other operating room nurses.

“To be in this kind of position, they prefer someone with experience,” she said. “It’s one thing to use theory, and another to have the hands-on experience.” But Doshi thinks the same may not hold true in other professions. “I think you find that in many fields, when people reach certain ages, the mentality is ‘maybe we can get someone in here who is fresh,’ ” she said.

Baby boomers represent about 40 percent of the Atlantic Health workforce, said Lesley Meyer, corporate manager of human resources.

Carol Indri, 50, an operating room nurse at Morristown and one of Doshi’s trainees, also finds the hospital and its parent company, Atlantic Health, very open to workers in the AARP years. But she said she knows people who have not been nearly so lucky. She pointed to a friend of hers whose husband left her when she was in her early 40s, who has been “barely able to keep a job” and is now “on the welfare side of life.”

Employers may soon be forced to make more provisions for older workers. People over age 65 accounted for 12.6 percent of the U.S. population in 1990, but their share is expected to increase to 16.8 percent by 2020 and 20.9 percent by 2050, according to Census Bureau calculations.

For now, though, older workers would do well to have a plan B for their so-called golden years.


Source:  CNBC

MOST older Australian workers are not planning for their careers in later life, only updating their skills at “crisis points” such as job loss or health problems, a new report shows.

The National Seniors’ report, released on Thursday, showed almost four out of five workers aged 50 or older had either never, or “not recently”, spent time planning their careers.

The finding comes despite the retirement age being set to rise to 70 in coming years and calls from Treasurer Joe Hockey for older workers to be prepared to contribute for longer.

The report showed most older workers were not investing the same amount of time or energy in career planning as school leavers or university graduates.

From more than 1800 responses to a survey on work and career planning, only 34% said career planning was very important or somewhat important to their quality of life. Half of those surveyed said it was not important.

The chief executive of National Seniors, Michael O’Neill, said the report showed many were only reacting to “crisis points, such as job loss or ill health”.

“But planning is vital for broadening work options, improving salary and extending working lives,” he said.

Mr O’Neill said when older Australians lost a job, a career change or training could save them from the dole queue.

The report also found 28% of respondents felt they did not need to be in paid or unpaid work and 18% believed career planning would not help them.

Mr O’Neill said older workers were often focused on their retirement finances, housing and health.

But he said it was still important to know how to map out a new career path or update their skills in case their retirement plans went awry.

Source:  Sunshine Coast Daily

Over 50? 5 Smart Tips for Landing a New Job

For many people, finding a new job after the age of 50 becomes more difficult.

After losing a job, older job seekers, compared to younger counterparts, receive fewer job offers, search for weeks longer and are ultimately less likely to find re-employment, according to a new study recently published in the Psychological Bulletin.

Based on data from the U.S. government’s 2014 Displaced Worker Survey, researchers discovered that job seekers over age 50 are likely to be unemployed 5.8 weeks longer than someone between the ages of 30 and 49, and 10.6 weeks longer than workers in their 20s. Additionally, the odds of being re-employed decrease by 2.6 percent for each one year increase in age.

“There’s very robust evidence that as an individual moves beyond age 50, they experience a large penalty toward how quickly they will find a job,” Connie Wanberg, one of the study’s authors and a professor at the University of Minnesota,said in a statement.

There a variety of factors that contributing to these results.[Surprise! Older Workers Have Fewer Senior Moments ]

“The obstacles to re-employment success stem not just from employer views about older workers, but also from age-related differences in knowledge, skills and abilities and the kind of jobs people want,” said Ruth Kanfer, one of the study’s co-authors and a professor at Georgia Tech University. “As individuals age, their skills and abilities change and they may often seek a different type of job.”

Kanfer points to construction workers who carry heavy objects as an example.

“If they change occupations or move into a different field, that is likely going to slow their search,” she said.

Smaller social networks, marketplace needs, search strategies and what workers want out of a new job are among the other factors that are contributing to older workers’ lack of success in finding new jobs.

To help older job seekers increase their chances of finding work, Wanberg and Kanfer offer several tips:

  • Stay current: It’s critical that workers never stop trying to learn new skills. Even workers who are currently employed should look for ways to grow their skills and stay current with their industry.
  • Boost job search strategies: Older workers are often unfamiliar with the ways job searches are conducted today. It is important they comb a variety of job search websites and understand the applicant requirements and hiring trends for the type of job they’re looking for.
  • Know what you’re up against: Older workers should fully understand that it is possible to find a new job, it’s just likely it will take a little longer than expected. Knowing this going into the process will help them stay persistent in their search.
  • Define your goals: When looking for a new job, older workers need to think about which aspects of a new job are most important to them and set clear goals and priorities to guide their search.
  • Build social networks: When aging, there is a tendency to narrow social networks, which can impact how long it takes to get a new job. It’s critical to maintain and expand on social networks when getting older.

The researchers believe the study shows there is a clear need for a better understanding of how younger and older job seekers differ in their re-employment goals.

“Job loss is really difficult for older workers, many of whom have probably already been thinking about retiring or slowing down, but had not yet reached a level of financial security to permit retirement,” Kanfer said. “Losing your job at this point in life creates a real conundrum – should I put myself through the strain of a job search or just retire for now?”

The study was co-authored by Darla Hamann, a professor at the University of Texas at Arlington, and Zhen Zhang, a professor at Arizona State University.

Source:  The New Daily

6 Things Older Workers Can Do to Find a Job Faster

While finding a new job is a difficult task for nearly everyone who has been unemployed, it’s especially tough on older workers, new research finds.

Half of those between the ages of 45 and 70 who’ve been unemployed during the past five years are still out of work, according to a study from AARP. Specifically, 38 percent remained unemployed, while 12 percent decided to stop working.

“As the economy continues to recover and the unemployment rate falls, there are still far too many people struggling,” Debra Whitman, AARP’s chief public policy officer, said in a statement. “Many Americans want to work as long as possible, but our survey confirms that, once unemployed, it can take a long time for older workers to find a quality job.”

Overall, 45 percent of jobseekers over the age of 55 were out of work for at least 27 weeks. The research revealed several strategies that could be contributing to the success of those who have been able to find new jobs.

The reemployed were more likely than the unemployed to contact employers directly and to reach out to their networks of contacts to find jobs. By comparison, the reemployed were less likely to rely on relatives and friends to find out about job opportunities.

Other strategies that were effective for those who found work included:

  • Using a headhunter
  • Consulting professional associations
  • Checking online job boards
  • Using online social networks
  • Visiting a public employment agency

When searching for new jobs, older workers need to be prepared to find a position in a new field. Occupational change was a common occurrence among the reemployed, with more than half having a job different from the one they had before becoming unemployed.

“Some of those ‘occupational transitions’ may have been the result of a decision to do work that was more personally rewarding and interesting,” the study’s authors wrote. “In most cases, however, the change was probably necessary to find a job.”

Finding new jobs, however, didn’t always translate into a return to normalcy for older workers.Among those who did find work, 48 percent were earning less money than in their previous jobs. The study revealed that the longer they were out of work, the larger the impact it had on their earning power. Nearly 60 percent of the reemployed who suffered a long-term spell of unemployment were earning less in their current job, compared with 41 percent who had been among the short-term unemployed.

While they may have suffered financially, not everything about their new jobs was a step backward for older workers.

Nearly half had better working conditions, while nearly 40 percent said the number of hours they worked and their shift were better. The study also discovered that roughly one-third of the reemployed said their current jobs provided more use of their experience, education and skills, more autonomy and more responsibility than their old jobs.

“As the results of this study indicate, the unemployment experiences of older workers are varied and their outcomes uncertain,” the study’s authors wrote. “More detailed analyses of the data are needed to help us better understand the plight of the older unemployed, even as the economy recovers, and to develop meaningful policies and programs to help them.”

The study was based on surveys of 2,492 people between the ages of 45 and 70 who had been unemployed at some time during the past five years.

Source  Business News Daily 

 / JUN 16, 2015

Forget Gen Y, female baby boomers are the changing face of t...

The number of older Australians participating in the workforce is rising, with an increased number of Australian women working past the age of 55, according to research from the Melbourne Institute of Applied Social and Economic Research.

The study comes off the back of the Intergenerational Report, which recently highlighted the ageing workforce and the importance of employers taking older employees into consideration.

The wide-ranging research, titled Two Decades of Change: The Australian Labour Market 1993–2013, shows the number of both men and women in the workforce over the age of 55 had increased significantly in the last two decades.

In particular, it showed a sharp rise in the number of women aged 60-64 still in the labour force, jumping from 15.2% in 1993 to 45% in 2013. The number of women aged 55-59 working in 2013 had hit 65.3%, from 36.8% in 1993.

Likewise, the number of men aged 65 or older working or looking for work doubled in the two decades to reach 17% in 2013, while the number of those aged 60-64 had increased from 48.3% to 62.5%.

Roger Wilkins, who co-authored the report with Mark Wooden, told Smart Company the swell of older Australian women participating in the labour market reflected a broader societal shift in female labour force participation.

“Twenty years ago, older females had very low participation rates, so there was an enormous amount of scope for change there,” Wilkins says.

“Twenty of thirty years ago, younger women began heading into career-type employment… Those women are now aged 50 to 60, so a lot of the increase is reflecting that.”

Wilkins says the steadily increasing age of pension eligibility over the past 20 years is also reflected in the research.

Asked if this ballooning of an ageing workforce will continue, Wilkins says while it is speculative, there is “certainly still plenty of room for a further increase of older workers”.

“I would be surprised if it got up to levels [in other brackets], but there is considerable scope for a further increase in the participation rate of 55 and over,” he says.

Meanwhile, Nikki Brouwers, chief executive of workplace rehabilitation and health specialist group Interact, says the research is a reminder for small businesses to consider employing older Australians. Brouwers recommends employers consider several ways of attracting and retaining an older workforce.

“Firstly, employers need to consider the flexibility of work hours. Older workers will often want to work earlier and finish earlier,” she says.

“There’s also the consideration of learning styles. Online learning for example might not be the best approach for older workers.”

Lastly, Brouwers says there are other issues such as ergonomics, lighting and movement that employers should take into account.

“What small business employers need to realise is they don’t need to be experts, they just need to engage with their workers, because at the end of the day, they will be best able to articulate what they need,” she adds.

This article first appeared at Women’s Agenda sister publication, Smart Company.

Date: June 6, 2015

Senior writer


Australia's growing long-term unemployment is getting little attention from the Abbott government.

Australia’s growing long-term unemployment is getting little attention from the Abbott government. Photo: Tamara Voninski

The Abbott government faces a growing jobs challenge as the number of people trapped in long-term unemployment hits a 16-year high, taking a growing toll on Australia’s collective wellbeing.

The number of people out of work for a year or more has risen by 18 per cent over the past year to 188,000, seasonally adjusted Bureau Statistics figures show. That’s the highest number since the late 1990s and almost three times more than mid-2008, just before the global financial crisis.

The Fairfax-Lateral Economics Wellbeing Index – which uses a range of indicators to measure changes in national welfare – shows the wellbeing cost of long-term unemployment reached a record $3.9 billion in the March quarter. This was driven by a sharp rise in long-term unemployment in the quarter.

The index’s author, economist Nicholas Gruen, said the result underscored the economic damage caused by long-term unemployment.

“In the last quarter the rise in long-term unemployment cost the economy more than the fall in the terms of trade,” he said. “Yet the fall in the terms of trade is a major talking point of economic pundits. Long-term unemployment is barely mentioned.”

A major economic cost of long-term unemployment is skills atrophy – when skills deteriorate through lack of use and training. But there is also a huge human toll – those out of work for a long period are more likely than others to become socially isolated and suffer mental and physical illnesses.

The rate of long-term unemployment – defined as being out of work for 12 months or more – reached a 13-year high of 1.5 per cent last month, up from just 0.6 per cent in 2008. The overall unemployment rate last month was 6.2 per cent. The number of people unemployed for two years or more reached 92,500 last month, the highest level in the 15 years the bureau has been publishing data on that indicator.

Last month’s federal budget included a $330 million Youth Employment Strategy that will target young job seekers in areas of high unemployment and vulnerable young people most at risk of long-term unemployment. A $1.2 billion wages subsidy scheme was changed to encourage firms to take on older workers.

“The new measures will focus on making job seekers more employable, reducing the costs of taking on new staff, and bringing job seekers and employers together,” the assistant employment minister, Luke Hartsuyker, said.

But the chief executive of the Australian Council of Social Service, Cassandra Goldie, said much more will be needed to deal with the “untold but persistent” long-term unemployment challenge.

Overall, the Fairfax-Lateral Economics Wellbeing Index – which provides a broader measure of wellbeing than traditional economic indicators – fell last quarter despite stronger than expected growth in gross domestic product. The index report said the quarterly contraction was driven by “the significant skills atrophy produce by the rise in long-term unemployment.” High rates of obesity and untreated mental illness were also significant drags on Australia’s collective wellbeing last quarter.

The number of people out of work for a year or more fell to 65,000 in mid-2008 but has climbed steadily ever since.

Tony Nicholson, the executive director of welfare agency the Brotherhood of St Laurence, said the rate of long-term unemployment among young people has been rising rapidly.

“The transition from school to work in the modern economy is now riskier than it was two or three decades ago,” he said.

Source:  SMH

Professor of management at London Business School Lynda Gratton was in Sydney for the World Business Forum.
Professor of management at London Business School Lynda Gratton was in Sydney for the World Business Forum. Dominic Lorrime

Employers should experiment with pay cuts and salary freezes for older workers to overcome age discrimination at work, a leading human resource professor says.

But any company that follows her advice would risk a public campaign run by advocacy group National Seniors Association.

Lynda Gratton, a London Business School professor and HR consultancy Hot Spots founder who advises big banks and insurance companies in Australia, said companies should consider not giving employees pay rises as they get older, or even giving them a pay cut.

Ms Gratton, who was in Sydney on Wednesday to address the World Business Forum, said:​ “I think one needs to be a bit more creative about how we think of age and salary structure.

“One difficulty is in any corporation, because people’s salary goes up every year, the older you are often the more you’re paid and that makes older people more expensive.

“So one of the things we’ve been playing around with is, would it be sensible for people’s salary not to go up just because they’re getting older and that would make them easier to employ? Would it be possible to think about their salary going down and they do more mentoring and coaching work?

“I think we’ve only ever seen age and salary as a straight line that goes up but why don’t we think about it as a line that goes down?”


National Seniors Australia chief executive Michael O’Neill said her comment was “completely out of touch” with the Australian industrial relations system and he would be prepared to fight against any bank or insurance company that reduced employees’ pay on the basis of their age.

“I would be happy to run a campaign against any institution that chooses to reduce workers’ pay because of their age and I’m sure consumers will react,” he said.

“We recognise the contribution older Australians make in the workplace. They should be remunerated fairly and it’s nonsense to say otherwise. Negotiating pay based on a birth certificate is clearly unacceptable.”

Age Discrimination Commissioner Susan Ryan said Ms Gratton’s comments did not apply to the Australian industrial environment.

“In general people are not paid more just because they had birthdays,” she said. “Most people negotiate their pay with their employer.”

Ms Ryan said in some cases workers might want a less-demanding role as they get older.

“Both the employer and the employee may agree on a different role, with a lesser pay package,” she said.

Most banks and financial sectors had been doing well in addressing age discrimination in the workplace, she said.

“They do it because their customers want to deal with experienced officers. So I think banks recognise the value of the experience of older employees to their business.”


Employers who took Ms Gratton’s advice might also find themselves in legal hot water.

Employment law firm Justicia managing partner Sarah Rey warned that employers who gave staff pay cuts or salary freezes purely on the basis of their age exposed themselves to the risk of unlawful age discrimination.

“Ultimately anti-discrimination laws prevent employers from discriminating on a variety of grounds. So if you are treating someone poorly and it has nothing to do with their performance, then that would be discrimination. If you’re looking to treat them less favourably it has to be something other than age,” she said.

More older workers are projected to remain in the workforce beyond the traditional retirement age of 65. But a survey commissioned by the Age Discrimination Commission found in the past two years more than half of jobseekers over 50 were discriminated against on the basis of age.

The Treasury’s Intergenerational Report in 2015 predicts the workforce participation rate among those older than 65 will jump from 12.9 per cent in 2015 to 17.3 per cent in 2055.

To encourage employment of older workers, the government has introduced a grant of up to $10,000 to employers who hire workers older than 50 who have been unemployed for six months or longer.

Ms Gratton said while she was not aware of companies pursuing her pay strategy, in practice older workers were already taking pay cuts as they quit their jobs and moved into different jobs, such as consultancy roles.


“I think in labour market it happens anyway because people leave corporations and they get jobs that pay them less. I think in reality it is happening but I don’t think corporations acknowledge that.”

One way of thinking about salary could be linked to child rearing, she said.

“One could actually say the time when people need most money is when they are in their 30s, when they have young kids to look after. When they are getting paid more in their 40s and 50s is actually when they don’t require as much money.”

Ms Ryan said Ms Gratton’s comment about the expenses related to child-rearing responsibilities did not reflect the diversity of the nation’s families.

“Many in their 50s have got their second families. If they have a second family and a second mortgage they would be in a terrible situation.”

 Source:   AFR

An ageing economy will be a slower and more unequal one—unless policy starts changing now

WARREN BUFFETT, who on May 3rd hosts the folksy extravaganza that is Berkshire Hathaway’s annual shareholders’ meeting, is an icon of American capitalism (see article). At 83, he also epitomises a striking demographic trend: for highly skilled people to go on working well into what was once thought to be old age. Across the rich world, well-educated people increasingly work longer than the less-skilled. Some 65% of American men aged 62-74 with a professional degree are in the workforce, compared with 32% of men with only a high-school certificate. In the European Union the pattern is similar.

This gap is part of a deepening divide between the well-educated well-off and the unskilled poor that is slicing through all age groups. Rapid innovation has raised the incomes of the highly skilled while squeezing those of the unskilled. Those at the top are working longer hours each year than those at the bottom. And the well-qualified are extending their working lives, compared with those of less-educated people (see article). The consequences, for individuals and society, are profound.

Older, wiser and a lot of them

The world is on the cusp of a staggering rise in the number of old people, and they will live longer than ever before. Over the next 20 years the global population of those aged 65 or more will almost double, from 600m to 1.1 billion. The experience of the 20th century, when greater longevity translated into more years in retirement rather than more years at work, has persuaded many observers that this shift will lead to slower economic growth and “secular stagnation”, while the swelling ranks of pensioners will bust government budgets.

But the notion of a sharp division between the working young and the idle old misses a new trend, the growing gap between the skilled and the unskilled. Employment rates are falling among younger unskilled people, whereas older skilled folk are working longer. The divide is most extreme in America, where well-educated baby-boomers are putting off retirement while many less-skilled younger people have dropped out of the workforce.

Policy is partly responsible. Many European governments have abandoned policies that used to encourage people to retire early. Rising life expectancy, combined with the replacement of generous defined-benefit pension plans with stingier defined-contribution ones, means that even the better-off must work longer to have a comfortable retirement. But the changing nature of work also plays a big role. Pay has risen sharply for the highly educated, and those people continue to reap rich rewards into old age because these days the educated elderly are more productive than their predecessors. Technological change may well reinforce that shift: the skills that complement computers, from management expertise to creativity, do not necessarily decline with age.

This trend will benefit not just fortunate oldies but also, in some ways, society as a whole. Growth will slow less dramatically than expected; government budgets will be in better shape, as high earners pay taxes for longer. Rich countries with lots of well-educated older people will find the burden of ageing easier to bear than places like China, where half of all 50-to-64-year-olds did not complete primary-school education.

At the other end of the social scale, however, things look grim. Manual work gets harder as people get older, and public pensions look more attractive to those on low wages and the unemployed. In the lexicon of popular hate-figures, work-shirking welfare queens breeding at the taxpayer’s expense may be replaced by deadbeat grandads collecting taxpayer handouts while their hard-working contemporaries strive on.

Nor are all the effects on the economy beneficial. Wealthy old people will accumulate more savings, which will weaken demand. Inequality will increase and a growing share of wealth will eventually be transferred to the next generation via inheritance, entrenching the division between winners and losers still further.

One likely response is to impose higher inheritance taxes. So long as they replaced less-fair taxes, that might make sense. They would probably encourage old people to spend their cash rather than salt it away. But governments should focus not on redistributing income but on generating more of it by reforming retirement and education.

Age should no longer determine the appropriate end of a working life. Mandatory retirement ages and pension rules that discourage people from working longer should go. Welfare should reflect the greater opportunities open to the higher-skilled. Pensions should become more progressive (ie, less generous to the rich). At the same time, this trend underlines the importance of increasing public investment in education at all stages of life, so that more people acquire the skills they need to thrive in the modern labour market. Today, many governments are understandably loth to spend money retraining older folk who are likely to retire soon. But if people can work for longer, that investment makes much more sense. Deadbeat 60-year-olds are unlikely to become computer scientists, but they could learn useful vocational skills, such as caring for the growing number of very old people.

Old power

How likely are governments to make these changes? Look around the rich world today, and it is hard to be optimistic. The swelling ranks of older voters, and their disproportionate propensity to vote, have left politicians keener to pander to them than to implement disruptive reforms. Germany, despite being the fastest-ageing country in Europe, plans to cut the statutory retirement age for some people (see article). In America both Social Security (the public pension scheme) and the fast-growing system of disability benefits remain untouched by reform. Politicians need to convince less-skilled older voters that it is in their interests to go on working. Doing so will not be easy. But the alternative—economic stagnation and even greater inequality—is worse.

Source:  The Economist