Jobs, the Economy and Older Americans
By Michael Hodin
Last week, the president transmitted his 2015 Economic Report to Congress together with the Annual Report of the Council of Economic Advisers. One of the key focus areas of the report was on declining labor force participation. This should be noted as a not so subtle reminder that, aside from all the fanfare the administration claims for economic successes around jobs creation and lower unemployment, there is still the economic challenge of people considered to have “opted out” of the workforce and therefore are not counted in the unemployment figures.
Additionally, we learn from the report the major impact that aging populations are having on the economy: “[GDP] growth rates are slower than historical averages because of the aging of the baby-boom generation into the retirement years.”
The report continues:
“CEA concludes that the aging population is the single most important factor depressing the participation rate, accounting for 1.7 of the 3.2 percentage point decline, or more than one-half of the decline, since the end of 2007…The youngest baby boomers will not turn 65 until 2029, so aging will continue to depress labor force participation in coming years.”
While technically accurate, simply asserting increased longevity — that miracle of 20th century science, medicine, technology and health care — will be a drag on the economy lacks both vision and imagination. And the negative outlook on labor force participation seems ill-informed given the recent research conducted by companies such as Transamerica and Merrill Lynch that show the majority of people are rejecting the traditional notion of “retirement” and actually want to continue working.
As the Economic Report further declares, “it is unlikely that the trend of decreasing labor force participation will reverse in the medium-term without policy changes.” Yet, the most visible and opportune moment for this administration to advance such policy goals, the 2015 White House Conference on Aging (WHCOA) , would appear to be paying little attention to their own wise economic advice. Of course, the themes of the conference — retirement security, healthy aging, long term services and supports and elder justice — have capacity to fit the goal of enabling America’s older citizens to remain healthy and active. But the WHCoA should seize this opportunity to promote ideas that would help reverse the decline in labor force participation among this cohort.
Still, the WHCoA, held every 10 years since the 1960s, continues to look and feel more like conferences of the past promoted an assumption that the principal government approach to just take care of the senior citizens. Not only is this fiscally unsustainable today, as the aging of our populations explodes by tens of millions, it is wholly inconsistent with 21st century demographic realities and the the tremendous strides we’ve made that allow the older population experience a truly healthy and active aging. If this decade’s WHCoA is to be relevant and useful, it should add several robust planks to its planning alongside the more traditional (and still necessary) approaches to assistance for elderly:
- Bring economic experts into the WHCoA planning to discuss the policy changes needed to enable greater participation among those over 60 in the labor force. Given the impact that an aging population will have on the economy, it would make sense for the Chairman of the CEA to provide input on the WHCOA.
- Invite business leaders to discuss the policy changes that would support the changing workplace and workforce landscape and align with 21st century demographic realities.
- Ensure the private sector is as engaged as the public sector in meeting the challenges of the growing care needs in America. The strain on the “sandwich generation” responsible for taking care of both elderly parents and children will only continue to grow and requires action.
- A willingness to be bold and visionary . If we are to align American economic growth and prosperity with a population that shortly will have more old than young — changes like redefining “retirement” as we re-imagine 21st century work life, shifting our thinking of spending on health from an economic cost to an investment in healthy aging, re-framing education to provide the skills and training needed to keep Americans active into their later years, and embracing the Age-friendly Cities movement.
In short, if those planning the WHCoA took the advice of their colleagues in the Council of Economic Advisers, Americans would benefit. The WHCoA — now about to have its 6th iteration — would be wise to incorporate these issues that are relevant to the 21st century. The idea of a WHCOA in the 60s was ahead of its time, let’s make sure the agenda in 2015 isn’t behind the curve.
Originally published at www.huffingtonpost.com on May 3, 2015.
