We have adopted for the upcoming edition of The Journal (winter 2012) the theme of intergenerational solidarity, in recognition of the EU’s designation of 2012 as the “European Year for Active Aging…and Solidarity between Generations.” I believe these recognitions are particularly timely.
Today, perhaps nowhere are intergenerational issues playing out more visibly than in the workplace. In the developed world, fewer workers are entering the workplace to support the larger numbers of retirees who, in turn, are living longer and healthier lives. At the same time, governments are responding to fiscal pressures by shifting more responsibility to individuals to provide for their own well-being and dignity as they age.
Some see as an outgrowth of these developments the spread of generational enmity --younger people growing to resent their elders. As one reporter rather colorfully put it, the young are feeling “crushed by a gerontocracy of older workers who appear determined to cling to the better jobs as long as possible and then, when they do retire, demand impossibly rich private and public pensions that the younger generations will be forced to shoulder.”
In other words, some are predicting a future in which large populations of dependent old people drain away the resources of the young. We reject such predictions out of hand as absurd and damaging.
Fortunately, research indicates that the alleged antipathy between the generations is far less dire than some headline writers would have us believe. While it can be difficult to measure intergenerational solidarity, recent attitudinal surveys do indicate that relations between the generations today are positive.
According to public opinion surveys conducted in 21 OECD countries across Europe, the great majority of citizens disagree that “older people are a burden on society.” People aged 40 to 50 are most likely to disagree that older people are a burden on society, while those in their 20s are somewhat less likely to disagree. Interestingly, it is older people themselves – people 55 and older - who are most likely to think that they are a burden.
The Global Recession has taken a great toll at both ends of the workforce’s demographic poles – hitting both young and mature workers with devastating impact. Yet, allegations of resentment or job envy coming from the young rest on shaky factual ground. In a recent US survey of human resources professionals, more than two out of three reported slight or no conflict at all among the generations at their workplaces.
In addition, there is no evidence of a positive correlation between the rate of employment of older workers and youth unemployment. On the contrary, OECD data suggests that in countries that encourage workers to retire early, youth unemployment rates remain particularly high.
We should not be lulled by today’s economic slowdown into taking anybody’s labor for granted or looking at older workers as a “cost” to be eliminated. Hard as it is may be to imagine today, the labor shortages that were looming when the recession interrupted will still come back to haunt us.
Once growth picks up, many experts predict that we will soon be facing growing shortages of talented and skilled workers in many developed countries. Many organizations will find it increasingly difficult to meet their needs for productive employees. Experienced, time-tested workers are part of the answer.
If nothing is done to integrate increased participation of older workers into the workforce, the total number of workers in the labor market will shrink, driving up costs and restricting economic growth. Increased labor force participation of older workers can also help strengthen our tax bases and alleviate pressure on our public pension and health care systems.
Without question, keeping older workers economically active will mitigate pressure on younger generations to support their longer lives in retirement and reduce perceptions of older persons as a burden on society.
We do believe efforts to facilitate harmony and positive transfer between generations will be needed. Younger generations may be called upon to devote more time to caring for aging family members. Older persons may need to play a greater role in raising grandchildren, as both parents participate in the workforce. Almost everyone may need to work longer to save a larger share of their retirement income in the face of declining public benefits.
To manage an increasingly age-diverse workforce, employers must try to understand the mindsets of different generations and how each group sees the world based on their experience. Employers who learn how to make the most productive use of both younger and older workers are going to enjoy a competitive advantage. This recognition is especially important in a global economy that places a great premium on knowledge and skill.
This can work surprisingly well. We are finding that younger and older generations actually have quite a bit in common in their attitudes toward work. For example, they are both seeking maximum flexibility with schedules, and both place a premium on a satisfactory work-life balance. Both generations already are finding themselves juggling the time they must dedicate to care for others. Flexibility is not only attractive to multiple generations, but it also facilitates intergenerational transfer.
Governments, individuals, employers – we all benefit from intergenerational solidarity and we all have a role to play in promoting it. I’ll leave you with a thought for all generations. Several years ago, at a folk-life festival down on the National Mall in Washington, DC, 101 year-old Rosa Edwards was manning a booth. A reporter stopped by to interview her and, in the course of the interview, asked her what the Capital City was like in “her day.” She straightened up, looked the reporter in the eye, and said: “Young man, THIS is my day!"