Meagan Lawson, CEO for Council on the Ageing (COTA) NSW, recently gave evidence to the Senate Select Committee Inquiry on the Future of Work and Workers – this is an edited version of her opening statement. This address speaks to the multitude of barriers that push older people out of the paid workforce and calls for a stronger focus on addressing the workplace structures that maintain these barriers, namely age discrimination and insufficient workplace flexibility.
As a society we have been warned for a long time about the dire consequences of an ageing population on the Australian economy – the anticipated drop in workforce participation, coupled with increasing age-related demand for services and infrastructure – leading to pressure on the economy. There has been a great deal of focus on how we would pay for the increased demand for services as a community – and yet little discussion or action taken to improve the workforce situation.
Since 2015, the eligibility age for the pension has been rising to a legislated 67 years old by 2023 (and a proposed increase to 70 by 2035) and the NSW Intergenerational Report predicts that without further policy intervention the labour force participation rate for those over 65 will rise from 12% in 2016 to 18% in 2056.
The NSW Intergenerational Report (2016) predicts that the ratio of workers to those aged 65 and over will halve by 2056 – from 4:1 in 2016 to just 2:1 in 2056. This places increased pressure on delivering the required services and infrastructure at acceptable standards.
There is a clearly identified need for older people to work for longer, articulated further in the Jobs for the Future report, identifying older workers as a key demographic for action – but there has been little subsequent action to facilitate this, and while there have been some programs implemented at a Federal level, they have been predominately focused on assisting individual workers back into the workforce. There has been little reform of workplaces or structures which might enable older people to work for longer.
So what can we do to make it as easy as possible for older people to maintain their participation in the workforce?
Reports like the PwC Golden Age Index may provide some of the answers. Nordic countries – Iceland, Sweden and Norway – top the golden Age Index, in line with their performance in other diversity markers. But by looking at what they are doing, Australia could improve its performance, and expect a long-term GDP boost as a result – if Australia could increase participation rates for people over 55 to Swedish levels, GDP is anticipated to rise by more than 4.5%.
The Golden Age Index identified three key themes for action – encouraging later retirement, improving employability and reducing employment barriers. These themes broadly align with what older people tell COTA NSW.
The Federal Government has already taken legislative action to encourage later retirement through changes to the eligibility age for the Age Pension. While this is not universally embraced, it is certainly an incentive for older people to be working longer. There are also some financial incentives in place which allow workers to continue to put wages into superannuation (at reduced taxation rates) if they continue to work.
In terms of improving employability, some older workers tell us they face discrimination in accessing training and education in their workplaces – that development focuses on younger workers who are seen as a better long term investment. But this is clearly nonsensical – workers of any age can change jobs, and the investment travels with them. Making training more widely available in the workplace is essential for older workers to adapt to the rapid technological change many industries are seeing.
For older people who have already been displaced, training opportunities are even more vital. We know that people over 50 who are unemployed for more than 12 months are unlikely to work again. Access to good vocational training opportunities for these people allows them to upgrade skills, and ensure they are ready to take on opportunities that may emerge.
When we talk about barriers, workplace flexibility is a big one. While the community conversation usually centres on young workers with families – particularly women – it is an important issue for older workers too.
Many older people have complex familial caring roles. Some take on part-time care for their grandchildren, which assists their children – particularly their daughters and daughters-in-law – return to work. Some have other care responsibilities – care for their parents as they age, or a sick partner. These workers need access to flexible workplaces which allow them to meet their caring responsibilities, while maintaining paid work.
Additionally, older people want flexibility as they prepare for retirement. In a piece of work undertaken by the Department of Family and Community Services in 2016 in the preparation of the NSW Ageing Strategy, 84% of survey participants between the age of 50 and 59 identified that they would like to transition to retirement – that is, to work fewer, more flexible hours as they move towards retirement.
Changes to the flexibility of work hours would assist workers in both these categories to continue their participation in paid work, helping the economy while meeting their own needs.
We also need to have an open conversation about recruitment discrimination. Like people from CALD backgrounds, or people with a disability, older people consistently identify discrimination as a major barrier to finding work.
Echoing the concerns identified in the Willing to Work report, COTA NSW hears from people who feel they are not being considered for roles they have the skills and experience to perform simply because of their age. Recruiters talk about needing to put in additional work to get older people to the interview stage.
Unconscious bias affects recruitment outcomes, and there needs to be changes to the way employers recruit to ensure they get a person with the right skills and experience for the role – regardless of the age of the person.
If we are serious about increasing the workforce participation of older workers, we must be serious about changing workplaces. This isn’t simply about skilling up individuals, and changing the way they approach the task. And if NSW really wants to be “the best place to work for people 65 and over”, there needs to be some concrete support for reaching that aspiration.
COTA NSW is the peak organisation for people over 50 in NSW. They work with policy makers, politicians, media and service providers to ensure that the voices of older people are heard and acted upon. They are holding a forum at NSW Parliament House on 22 May to discuss these issues.