Use Spare Older Workers to Overcome ‘Labour Shortages’

Yves here. On the one hand, as someone who is getting to be pretty long in tooth, I’m not sure about calling un and under-employed older workers “spare”. But when the alternative is being thrown on the trash heap, maybe that isn’t so unflattering.

Even though this analysis is from Australia, most of if not all of its finding would almost certainly prove out in the US. However, there is a whole ‘nother set of issues here. Australia is 85% urban, with most of the population living in or near four large cities. So its labor mobility issues are less pronounced than here. Moreover, a lot of the whinging in the US about worker shortages, as even readers of the Wall Street Journal regularly point out in its comment section is:

1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate

2. Not being willing to train less skilled workers, as companies once did as a matter of course

By Leith van Onselen. Originally published at MacroBusiness

A few weeks back, the Benevolent Society released a report which found that age-related discrimination is particularly rife in the workplace, with over a quarter (29%) of survey respondents stating they had been turned down for a job because of their old age, whereas 14% claimed they had been denied a promotion because of their old age.

Today, the Regional Australia Institute (RAI) has warned that Australia is facing a pension crisis unless employers stop their “discrimination” against older workers. From The ABC:

[RAI] has warned the Federal Government’s pension bill would rise from $45 billion to $51 billion within three years, unless efforts were made to help more mature workers gain employment, particularly in regional communities.

Chief executive Jack Archer said continued unemployment of people older than 55 would cut economic growth and put a greater strain on public resources.

“We hear that there is a lot of people who would like to work, who would love to stay in the workforce either part-time or full-time even though they’re in their late 50s, 60s and even into their 70s,” he said.

“But we’re not doing a very good job of giving them the training, giving them the incentives around the pension, and working with employers to stop the discrimination around employing older workers”…

“It basically means you’ve got a lot of talent on the bench, a lot of people who could be involved and contributing who are sitting around homes and wishing they were doing something else,” he said…

Mr Archer said as the population aged the workforce shrank, and that risked future economic growth.

But he said that could be reversed provided employers embraced an older workforce…

“[When] those people are earning [an income], their pension bills will either disappear or be much lower and the government will get a benefit from that.”

For years the growth lobby and the government has told us that Australia needs to run high levels of immigration in order to alleviate so-called ‘skills shortages’ and to mitigate an ageing population. This has come despite the Department of Employment showing that Australia’s skills shortage “remains low by historical standards” and Australia’s labour underutilisation rate tracking at high levels:

Economic models are often cited as proof that a strong immigration program is ‘good’ for the economy because they show that real GDP per capita is moderately increased via immigration, based on several dubious assumptions.

The most dubious of these assumptions is that population ageing will necessarily result in fewer people working, which will subtract from per capita GDP (due to the ratio of workers to dependents falling).

Leaving aside the fact that the assumed benefit to GDP per capita from immigration is only transitory, since migrants also age (thereby requiring an ever-bigger immigration intake to keep the population age profile from rising), it is just as likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed. This is exactly what has transpired in Japan where an ageing population has driven the unemployment rate down to only 2.8% – the lowest level since the early-1990s:

The ABS last month revealed that more Australians are working past traditional retirement age, thereby mitigating concerns that population ageing will necessarily reduce the employment-to-population ratio:

Clearly, however, there is much further scope to boost workforce participation among older workers.

Rather than relying on mass immigration to fill phantom ‘labour shortages’ – in turn displacing both young and older workers alike – the more sensible policy option is to moderate immigration and instead better utilise the existing workforce as well as use automation to overcome any loss of workers as the population ages – as has been utilised in Japan.

It’s worth once again highlighting that economists at MIT recently found that there is absolutely no relationship between population ageing and economic decline. To the contrary, population ageing seems to have been associated with improvements in GDP per capita, thanks to increased automation:

If anything, countries experiencing more rapid aging have grown more in recent decades… we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita… on the contrary, the relationship is significantly positive in many specifications.

The last thing that Australia should be doing is running a mass immigration program which, as noted many times by the Productivity Commission cannot provide a long-term solution to ageing, and places increasing strains on infrastructure, housing and the natural environment.

The sustainable ‘solution’ to population ageing is to better utilise the existing workforce, where significant spare capacity exists.

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59 comments

  1. Enquiring Mind

    At what point might an impatient constituency demand greater accountability by its elected representatives? In the business world, the post-2000 accounting scandals like Enron resulted in legislation to make company execs sign off on financial statements under threat of harsh personal penalties for misrepresentation. If legislators were forced by constituents to enact similar legislation about their own actions, the transparency could be very enlightening and a type of risk reduction due to acknowledgement of material factors. Imagine seeing in print the real reasons for votes, the funding sources behind those votes and prospect of jail time for misrepresentation about what is just their damn job. Call it Truth-In-Legislating, similar to the prior Truth-In-Lending act.

    Reply
    1. Vatch

      It’s a nice idea, but I don’t think that very many executives have been penalized under the Sarbanes Oxley Act. Jamie Dimon certainly wasn’t penalized for the actions of the London Whale. I guess we’ll see what happens in the near future to the executives of Wells Fargo. I suspect that a Truth-In-Legislating law would be filled with loopholes or would be hampered by enforcement failures, like current Congressional ethics rules and the Sarbanes Oxley Act.

      Reply
    2. sgt_doom

      At what point might an impatient constituency demand greater accountability by its elected representatives?

      At that point when they start shooting them (as they did in Russian in the very early 1900s, or lop their heads off, as they once did in France).

      Personally, I’ll never work for any Ameritard corporation ever again, as real innovation is not allowed, and the vast majority are all about financialization in some form or other!

      My work life the past thirty years became worse and worse and worse, in direct relation to the majority of others, and my last jobs were beyond commenting up.

      My very last position, which was in no manner related to my experience, education, skill set and talents — like too many other American workers — ended with a most tortuous layoff: the private equity firm which was owner in a failed “pump and dump” brought a “toxic work environment specialist” whose job was to advise the sleazoid senior executives (and by that time I was probably one of only four actual employee workers there, they had hired a whole bunch of executives, though) on how to create a negative work environment to convince us to leave instead of merely laying us off (worked for two, but not the last lady there I myself).

      The American workplace sucks big time as evidenced by their refusal to raise wages while forever complaining about their inability to find skilled employees — they are all criminals today!

      Reply
      1. Junto

        Your experiences are a mirror image to mine. Years and years and years of declining standards and ethics in the work environment. There are not enough expletives to describe the sheer incompetence, greed, corruption, hypocrisy, mentally ill psycho/sociopathy, etc. of those who claim themselves to be ‘managers’. ‘Managers’ these days don’t have a clue. All they do day-in and day-out is manage their personal self-interest, self-preservation and CYA. Do any of them even care about the products, services or work that needs to be done and problems that need to be solved!?!? Seriously, ask anyone. When was the last time you had a manager or heard of an executive take responsibility for their own ignorance and gross incompetence? Or better yet, a manager who actually was willing to get their hands dirty, stick their neck out and help do the work that needed to be done instead of being a backseat driving, armchair, Monday morning quarterback/social justice pandering hypocrite?

        As long as the wrong people continue to be put into positions of power, the center will not hold and there will be a day of reckoning “by the people for the people”. Don’t believe me? Read history.

        Reply
  2. RUKidding

    Interesting article and thanks.

    I lived and worked in Australia in the late ’70s and early ’80s. Times were different. Back then, the government jobs came with mandatory retirement. I believe (but could be wrong) that it was at 63, but you could request staying until 65 (required approval). After that, one could continue working in the private sector, if you could find a job.

    The population was much less than it is now. I believe the idea was to make room for the younger generation coming up. Back then, government workers, as well as many private sector workers, had defined benefit pension plans. So retiring younger typically worked out ok.

    I had one friend who continued working until about 70 because she wanted to; liked her job; and wasn’t interested in retiring. However, I knew far more people who were eager to stop at 63. But back then, it appeared to me that they had the financial means to do so without much worry.

    Things have changed since then. More of my friends are putting off retirement bc they need the money now. Plus defined benefit pension plans have mostly been dispensed with and replaced by, I believe (I’m not totally clear on this), the Aussie version of a 401 (k) (someone can correct me if I’m wrong).

    What the article proposes makes sense. Of course here in the USA, older workers/job seekers face a host of discriminatory practices, especially for the better paying jobs. Nowadays, though, US citizens in their golden years can sell their house, buy an RV, and become itinerant workers – sometimes at back breaking labor, such as harvesting crops or working at an Amazon gulag – for $10 an hour. Yippee kay-o kay-aaay!

    So let us also talk about cutting Medicare for all of those lazy slacker Seniors out there. Woo hoo!

    Reply
    1. jrs

      There is really two issues:
      1) for those whom age discrimination in employment is hitting in their 50s or even younger, before anyone much is retiring, it needs to be combatted
      2) eventually (sometimes in their 60’s and really should be at least by 65) people ought to be allowed to retire and with enough money to not be in poverty. This work full time until you drop garbage is just that (it’s not as if 70 year olds can even say work 20 hours instead, no it’s the same 50+ hours or whatever as everyone else is doing). And most people won’t live that much longer, really they won’t, U.S. average lifespans aren’t that long and falling fast. So it really is work until you die that is being pushed if people aren’t allowed to retire sometime in their 60s. Some people have good genes and good luck and so on (they may also have a healthy lifestyle but sheer luck plays a large role), and will live far beyond that, but averages …

      Reply
      1. RUKIdding

        Agree with you about the 2 issues.

        Working past 65 is one of those things where it just depends. I know people who are happily (and don’t “really” need the money) working past 65 bc they love their jobs and they’re not taking a toll on their health. They enjoy the socialization at work; are intellectually stimulated; and are quite happy. That’s one issue.

        But when people HAVE TO work past 65 – and I know quite a few in this category – when it starts taking a toll on their health, that is truly bad. And I can reel off several cases that I know of personally. It’s just wrong.

        Whether you live much longer or not is sort of up to fate, no matter what. But yes, if work is taking a toll on your heath, then you most likely won’t live as long.

        Reply
  3. cocomaan

    In January, economists from MIT published a paper, entitled Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation, which showed that there is absolutely no relationship between population aging and economic decline. To the contrary, population aging seems to have been associated with improvements in GDP per capita, thanks to increased automation:

    From the cited article.

    I don’t know why it never occurred to me before, but there’s no reason to ditch your most knowledgeable, most skilled workers toward the eve of their careers… except if you don’t want to pay labor costs. Which we know that most firms do not, in their mission for profit for shareholders or the flashy new building or trying to Innuhvate.

    There’s a myth that innovation comes from the 20 something in their basement, but that’s just not the case. Someone who has, for instance, overseen 100 construction projects building bridges needs to be retained, not let go. Maybe they can’t lift the sledge anymore, but I’d keep them on as long as possible.

    Good food for thought! I enjoyed this piece.

    Reply
    1. HotFlash

      There’s a myth that innovation comes from the 20 something in their basement, but that’s just not the case.

      Widely held by 20 somethings. Maybe it’s just one of those Oedipus things.

      Reply
      1. wilroncanada

        Widely disseminated, if not initiated, by corporate stooges and lobbies (the same thing?) in order to be able to hire those 20 somethings at below the value of garden gnomes–Silly-con Valley, I’m talking about you–and working them 18 hours a day, and fighting any attempt at organizing for better conditions.
        Their basements are too often the basements of their parents’ homes.

        Reply
  4. fresno dan

    1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate

    2. Not being willing to train less skilled workers, as companies once did as a matter of course

    3. older workers have seen all the crap and evil management has done, and is usually in a much better position than young less established employees to take effective action against it

    Reply
    1. Disturbed Voter

      This. Don’t expect rational actors, in management or labor. If everyone was paid the same, regardless of age or training or education or experience etc … then the financial incentives for variant outcomes would decrease. Except for higher health costs for older workers. For them, we could simply ban employer provide health insurance … then that takes that variable out of the equation too. So yes, the ideal is a rational Marxism or the uniformity of the hive-mind-feminism. While we would have “from each according to their ability, to each according to their need” we will have added it as an axiom that all have the same need. And a whip can encourage the hoi polloi to do their very best.

      Reply
      1. David Carl Grimes

        Older workers cost more in terms of health insurance. If everyone had Medicare for All, then there would be more incentive for management to hire older workers because they can “hit the ground running” compared to younger workers.

        That said, a lot of younger managers are insecure because older workers can see through them. They don’t want experienced older workers looking over their shoulders and second guessing them.

        Reply
        1. jrs

          yes it might help some (or at least allow some to retire early), except age discrimination actually seems to be a bit of a global problem, and that part is hard to explain solely via the American healthcare system.

          Reply
    2. Jeremy Grimm

      Fully agee! To your list I would add a corollory to your item #3 — older workers having seen all the crap and evil management has done are more likely to inspire other employees to feel and act with them. — This corollory is obvious but I think it bears stating for emphasis of the point.

      I believe your whole list might be viewed as symtoms resulting from the concept of workers as commodity — fungible as cogs on a wheel. Young and old alike are dehumanized.

      The boss of the branch office of the firm I last worked for before I retired constantly emphasized how each of us must remain “fungible” [he’s who introduced me to this word] if we wanted to remain employed. The firm would win contracts using one set of workers in its bids and slowly replace them with new workers providing the firm a higher return per hour billed to the client. I feel very lucky I managed to remain employed — to within a couple of years of the age when I could apply for Medicare. [Maybe it’s because I was too cowed to make waves and avoided raises as best I could.]

      [I started my comment considering the idea of “human capital” but ran into trouble with that concept. Shouldn’t capital be assessed in terms of its replacement costs and its capacity for generating product or other gain? I had trouble working that calculus into the way firms treat their employees and decided “commodity” rather than “capital” better fit how workers were regarded and treated.]

      Reply
  5. BoycottAmazon

    “skills vs. demand imbalance” not labor shortage. Capital wants to tip the scale the other way, but isn’t willing to invest the money to train the people, per a comment I made last week. Plenty of unemployed or under-employed even in Japan, much less Oz.

    Keeping the elderly, who already have the skills, in the work place longer is a way to put off making the investments. Getting government to tax the poor for their own training is another method. Exploiting poor nations education systems by importing skills yet another.

    Some business hope to develop skills that only costs motive power (electric), minimal maintenance, and are far less capital intensive and quicker to the market than the current primary source’s 18 years. Capitalism on an finite resource will eat itself, but even capitalism with finite resources will self-destruct in the end.

    Reply
  6. Jim Haygood

    Importantly, the chart labeled as Figure 2 uses GDP per capita on the y-axis.

    Bearing in mind that GDP growth is composed of labor force growth times productivity, emerging economies that are growing faster than the rich world in both population and GDP look more anemic on a per capita basis, allowing us rich country denizens to feel better about our good selves. :-)

    But in terms of absolute GDP growth, things ain’t so bright here in the Homeland. Both population and productivity growth are slowing. Over the past two-thirds century, the trend in GDP groaf is relentlessly down, even as debt rises in an apparent attempt to maintain unsustainable living standards. Chart (viewer discretion advised):

    https://gailtheactuary.files.wordpress.com/2016/02/us-annual-gdp-growth-rate-2015.png

    Van Onselen doesn’t address the rich world’s busted pension systems. To the extent that they contain a Ponzi element premised on endless growth, immigration would modestly benefit them by adding new victims workers to support the greying masses of doddering Boomers.

    Will you still need me
    Will you still feed me
    When I’m sixty-four?

    — The Beatles

    Reply
  7. Arthur Wilke

    There’s been an increase in the employment of older people in the U.S. in the U.S. population. To provide a snapshot, below are three tables referring to the U.S. by age cohorts of 1) the total population, 2) Employment and 3) employment-population ratios (percent).based on Bureau of Labor Statistics weightings for population estimates and compiled in the Merge Outgoing Rotation Groups (MORG) dataset by the National Bureau of Economic Research (NBER) from the monthly Current Population Survey (CPS).

    The portion of the population 16 to 54 has declined while those over 54 has increased.
    1. Percent Population in Age Cohorts: 1986 & 2016

    1986 2016 AGE
    18.9 15.2 16-24
    53.7 49.6 25-54
    12.2 16.3 55-64
    9.4 11.2 65-74
    5.8 7.7 75 & OVER
    100.0 100.0 ALL

    The portion of the population 16 to 54 employed has declined while the portion over 54 has increased..

    2 Percent Employed in Age Cohorts: 1986 & 2016

    1986 2016 AGE
    18.5 12.5 16-24
    68.4 64.7 25-54
    10.4 16.9 55-64
    2.3 4.8 65-74
    0.4 1.0 75 & OVER
    100.0 100.0 ALL

    The employment-population ratios (percents) show significant declines for those under 25 while increases for those 55 and above.

    3. Age-Specific Employment Population Ratios (Percents)

    1986 2016 AGE
    59.5 49.4 16-24
    77.3 77.9 25-54
    51.8 61.8 55-64
    14.8 25.9 65-74
    3.8 7.9 75 & OVER
    60.7 59.7 ALL

    None of the above data refute claims about age and experience inequities. Rather these provide a base from which to explore such concerns. Because MORG data are representative samples with population weightings, systematic contingency analyses are challenging.

    In the 30 year interval of these data there have been changes in population and employment by education status, gender, race, citizenship status along with industry and occupation, all items of which are found in the publicly available MORG dataset.

    AW

    Reply
    1. Yves Smith Post author

      I think you are missing the point. Life expectancy at birth has increased by nearly five years since 1986. That renders simple comparisons of labor force participation less meaningful. The implication is that many people are not just living longer but are in better shape in their later middle age. Look at the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64. How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford? And the increase over time in the current 55=64 age cohort is significantly due to the entry of women into the workplace. Mine was the first generation where that became widespread.

      The increase in the over 65 cohort reflects desperation. Anyone who can work stays working.

      Reply
      1. Arthur Wilke

        Even if life-expectancy is increasing due to improved health, the percentage of those in older cohorts who are working is increasing at an even faster rate. If a ratio is 6/8 for a category and goes up to 10/12 the category has increased (8 to 12 or 50%) and the subcategory has increased (6 to 10 i or 67% and the ratios go from 6/8 or 75/100 to 10/12 or 83.3/100)

        I assume you are referencing the employment-population (E/P) ratio when noting “the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64.” However the change in the E/P ratio for 25-54 year olds was virtually unchanged (77.3/100 in 1986 to 77.9/100 in 2016) and for the 55-64 year olds the E/P ratio INCREASED significantly, from 51.8/100 in 1986 to 61.8/100 in 2016.

        You query: “How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford?” That’s a set of concerns the data I’ve compiled cannot and thus cannot address. It would take more time to see if an empirical answer could be constructed, something that doesn’t lend itself to making a timely, empirically based comment. The data I compiled was done after reading the original post.

        You note: “. . . ;;[T] the increase over time in the current 55-64 age cohort is significantly due to the entry of women into the workplace.” Again, I didn’t compute the age-gender specific E/P ratios. I can do that if there’s interest. The OVERALL female E/P ratio (from FRED) did not significantly increase from December 1986 ( 51.7/100) to December 2016 (53.8/100).

        Your write: “The increase in the over 65 cohort reflects desperation. Anyone who can work stays working.” Again, the data I was using provided me no basis for this interpretation. I suspect that the MORG data can provide some support for that interpretation. However, based on your comments about longer life expectancy, it’s likely that a higher proportion of those in professional-middle class or in the upper-middle class category Richard Reeves writes about (Dream Hoarders) were able and willing to continue working. For a time in higher education some institutions offered incentives for older faculty to continue working thereby they could continue to receive a salary and upon becoming eligible for Social Security draw on that benefit. No doubt many, many vulnerable older people, including workers laid off in the wake of the Great Recession and otherwise burdened lengthened their or sought employment.

        Again the MORG data can get somewhat closer to your concerns and interests, but whether this is the forum is a challenge given the reporting-comment cycle which guides this excellent site.

        Reply
        1. Yves Smith Post author

          I have no idea who you know personally.

          I can tell you I have a wide circle of acquaintances, and they in turn have friends and family members across as large economic spectrum. The people I know and hear of who are not in the top 10% are desperate for work and cannot afford to retire. I can name people who will be dead via suicide or not being able to afford essential medications (and not costly ones) in 3-5 years if they don’t get more work. And these are people whose life expectancy is way more than 3-5 years (my mother at age 89 has a life expectancy of 5 years).

          This was not true of the generation before them, when more companies offer pensions, and even more important, home ownership was a forced savings vehicle. The 30 year fixed rate mortgage, the fact that people had longer job tenures (and fewer 2 career couples, which increased vulnerability to bankruptcy), and when corporations moved people back in the 1980s, they paid middle managers and up for moving costs, INCLUDING LOSSES ON THE SALE OF THE HOUSE, meant that by the time someone retired, their living costs had fallen greatly by having paid off their mortgages. Health care costs were also proportionately much lower then and Medicare was not as costly as now.

          So this is not just a function of who I know. The situation of people in their 50s and 60s is far more desperate on average than it was for people of the same age in the 1980s. I’m shocked that you don’t get that and act as if looking at one narrow set of data tells you what is really going on in the labor market.

          Reply
  8. paul

    Institutional memory (perhaps, wisdom) is a positive threat to institutional change (for the pillage).

    In my experience,those in possession of it are encouraged/discouraged/finally made to go.

    The break up of British Rail is a salient,suppurating example.

    The break up of National Health Service is another.

    It would be easy to go on, I just see it as the long year zero the more clinical sociopaths desire.

    Reply
  9. Livius Drusus

    I don’t understand how the media promotes the “society is aging, we need more immigrants to avoid a labor shortage” argument and the “there will be no jobs in the near future due to automation, there will be a jobs shortage” argument at the same time. Dean Baker has discussed this issue:

    http://cepr.net/publications/op-eds-columns/badly-confused-economics-the-debate-on-automation

    In any event, helping to keep older workers in the workforce can be a good thing. Some people become physically inactive after retirement and their social networks decline which can cause depression and loneliness. Work might benefit some people who would otherwise sink into inactivity and loneliness. Of course, results might vary based on individual differences and those who engaged in hard physical labor will likely have to retire earlier due to wear and tear on their bodies.

    Reply
    1. flora

      Increase in life expectancy is greatly influenced by a decrease in childhood mortality. People are living longer because they aren’t dying in large numbers in childhood anymore in the US. So many arguments that start out “we’re living longer, so… something” confuse a reduction in childhood mortality with how long one can expect to live to in old age, based on the actuarial charts. Pols who want to cut SS or increase the retirement age find this confusion very useful.

      Life expectancy at birth is very sensitive to reductions in the death rates of children, because each child that survives adds many years to the amount of life in the population. Thus, the dramatic declines in infant and child mortality in the twentieth century were accompanied by equally stunning increases in life expectancy.

      http://www.pbs.org/fmc/timeline/dmortality.htm

      Reply
  10. Arthur Wilke

    Older U.S. residents have increased labor force participation and their employment numbers are projected to increase.

    In the U.S. from 1986-2016 the employment-population (E/P) ratios for those under 25 declined significantly, for those 25-54 E/P ratios remained virtually steady and for those over 55 E/P ratios increased based on analysis of data from the Merged Outgoing Rotation Groups (MORGs compiled by and freely distributed by the National Bureau for Economic Research) and, extracted from the monthly Current Population Survey data.with population weights for population estimates provided by the Bureau of Labor Statistics.

    In work done several years ago, the decline in labor force participation (E/P ratio) by the cohort under 25 was balanced by increases in the 65 and older cohorts.

    MORG data can be used to specify the who, what,and where greater or lesser changes are exhibited within various age subcategories (cohorts)..

    For those referencing labor force projections, the Bureau of Labor Statiistics, the biennial 10 year projections (2014-2014,
    portray the 35-44 age cohort to a net increase by 3.5 million and the 65-74 age cohort to net increase by 3.8 million. More detailed information on gross occupational demand (increase plus replacements) can be found in the projections.

    For those committed to research labor, a data set based on MORG data and augmented by labor projection data could assist in creating more refined analyses as well as developed methodological critiques.

    Reply
  11. TarheelDem

    I’ve noticed ever since the 1990s that “labor shortage” is a signal for cost-cutting measures that trigger a recession. Which then becomes the excuse for shedding workers and really getting the recession on.

    It is not just older workers who are spare. There are other forms of discrimination that could fall by the wayside if solving the “labor shortage” was the sincere objective.

    Reply
    1. JBird

      Often productively, sales, and profits decrease with those cost cuttings, which justified further cuts which decreases productivity, sales, and profits which justifies…

      It’s a pattern I first noticed in the 1990s and looking back in the 80s too. It’s like some malevolent MBAs went out and convinced the whole of American middle and senior business management that this was the Way to do it. It’s like something out of the most hidebound, nonsensical ideas of Maoism and Stalinism as something that could not fail but only be failed. It is right out of the Chicago Boys’ economics playbook. Thirty-five years later and the Way still hasn’t succeeded, but they’re still trying not to fail it.

      Reply
      1. SpringTexan

        Love your reflections. Yeah, it’s like a religion that they can’t pay more, can’t train, must cut people till they are working to their max at ordinary times (so have no slack for crises), etc. etc., and that it doesn’t work doesn’t change the faith in it AT ALL.

        Reply
  12. JBird

    This is ranting, but most jobs can be done at most ages. If want someone to be a SEAL or do 12 hours at farm labor no of course not, but just about everything else so what’s the problem?

    All this “we have a skilled labor shortage” or “we have a labor surplus” or “the workers are all lazy/stupid” narratives” and “it’s the unions’ fault” and “the market solves everything” and the implicit “we are a true meritocracy and the losers are waste who deserve their pain” and my favorite of the “Job creators do make jobs” being said, and/or believed all at the same time is insanity made mainstream.

    Sometimes I think whoever is running things are told they have to drink the Draught of UnWisdom before becoming the elites.

    Reply
  13. Dan

    So I’m a middle aged fella – early thirties – and have to admit that in my industry I find that most older workers are a disaster. I’m in tech and frankly find that most older workers are a detriment simply from being out of date. While I sympathize, in some cases experience can be a minus rather than a plus. The willingness to try new things and stay current with modern technologies/techniques just isn’t there for the majority of tech workers that are over the hill.

    Reply
    1. flora

      Well, if you’re lucky, your company won’t replace you with a cheaper HiB visa holder or outsource your job to the sub-continent before you’re 40.

      Reply
      1. Dan

        Amen to this- I’ve dealt with H1B and outsourced workers and that is much worse. Not because there aren’t talented people there, but because of which ones are selected for those roles

        Reply
    2. Plato_in_the_cave

      For every older worker that fits your description, there is an equal if not larger number of younger workers in their twenties and early thirties that don’t have a clue about the fundamentals of their so-called ‘expertise’ and can’t even begin to actualize how to go about taking the first baby-steps towards rarefying unsubstantiated information from the Internet and corroborating it into wisdom. How many mindless middle-aged managers do I know that use the term ‘social media’ as recklessly and ignorantly as the credulous neophytes who don’t have a clue what the medium is the message means?

      Reply
      1. Dan

        I’m referring only to the hands-on-keyboard folks where being up to date is more critical. Experience is much more valuable in management and decision maker roles, so I mostly agree with you, I believe

        Reply
        1. Plato_in_the_cave

          Understood. Don’t get me wrong, Dan. For the most part, I agree with your comment. If I had a hay penny for every “older worker” who was not able to adapt and chose instead to stubbornly stick to their prideful, ignorant, inefficient ways, I could maybe afford to trade in my pager for a no-contract flip-phone.

          And for those who felt inclined to pile on the “berate Dan’s comments” bandwagon, neuroplasticity is a spectrum predicated on a myriad of variables, which included fairly un-malleable variables such as human genetics. Ergo, there are those at the low-end of the spectrum even if Disney tells you otherwise.

          Having said that, are people asking the wrong questions about labor shortages, marketable skills, age discrimination, etc.? Absolutely. As other have pointed out, it is NOT a zero-sum game. And for those who try to brainwash people into thinking that it is, they have self-serving interests…and most likely a minor in economics.

          Reply
    3. drexciya

      As an “old guy” (as in 40+) person in IT I’d say it’s a mixed bag. I find that the latest and greatest technology is not always really useful. Being older, I’m a lot more cynical and easily cut through the marketing crap. Also, it has become some sort of trend that you’re supposed to keep up with technology yourself. I can understand that older people think there’s a limit to that. I have my own lab/demo environment at home, to be able to properly prepare, but that’s really going pretty far.

      Given the fact that lots of new stuff becomes obsolete or discarded quickly, it has become difficult to get an idea of what you should focus on (to prevent yourself from wasting time). Also, you have to remember that “hot” technology is only adopted by larger environments after a few years. Larger environments are inherently slow to pick up or even able to implement new technology.

      So, yes there are people that don’t keep up with technology, but that doesn’t necessarily have to be their fault. Better support and investment by employers, and especially time to keep up should be more of a focal point. Also typical is that there’s hardly anything resembling sharing and managing knowledge within companies. But for that to work, you have to completely change the current management philosophy.

      That’s what I notice with off-shoring or outsourcing, people in that kind of environment tend to hoard knowledge, which is what you really don’t want.

      Reply
      1. Dan

        I agree that it isn’t fair that employees are expected to keep up to date without support from employers, and that’s something that should change.

        I also agree that the latest and greatest is often discarded quickly, and for most people they don’t need to keep up with the bleeding edge (except for maybe Javascript folks). However when I see people that are not familiar with established patterns and frameworks such as ORMs, modern WebAPI development, or even language features such as Lambdas or delegates, that’s when I start to blame the employee. That stuff is table stakes at this point and without it there are upper limits on the productivity and quality that comes from those people.

        Reply
      2. jrs

        What I see is that most people get the heck out of tech by the time they get older, really the vast majority who were doing it 10 years ago just aren’t anymore. So it could be that those who stay in are less ambitious/driven or maybe merely less able to find better opportunities in some way. But if 30 somethings aren’t ambitious enough to be actively thinking of changing something and getting out of tech (lateral moves out of tech seem safest but vertical moves to management could work) that is going to be them in a decade, look out you rock and rollers ..

        Reply
        1. Dan

          I think you’re correct that most get out of tech, or at least the nitty-gritty of it as they get older. Move to management or other roles in a business. That’s what I did, cause I already knew I didn’t have the desire to keep up already. There are great older coders too, don’t get me wrong, but I find that most of the smart folks have moved out of coding by 40 at the latest.

          Reply
      3. JTFaraday

        I don’t think all of this has to do with age per se so much as that employees take up employment in cohorts, and those cohorts become marked by the activities that they undertake in undergoing employment. To take up something new requires a release from the activities undertaken in order to learn something new.

        This can look like a reason to discriminate against incumbent employees, ie “age discrimination” if you are a sloppy thinker. And a lot of people are sloppy thinkers.

        If one is an aging employee, one shouldn’t bow before sloppy thinkers.

        Reply
        1. JTFaraday

          They used to call this “a promotion,” but that’s before the corporation became a vehicle for financial looting.

          Reply
    4. Felix_47

      Wow. I’m an older guy in a high tech environment and what we see is that so many new ideas do not lead to a better outcome. New ideas might lead to more organizational BS but not better production or outcomes.

      Reply
      1. Dan

        Some really do help though, especially those that have been established for a few years. A Java guy that can’t use Spring? That’s a problem

        Reply
    5. Norb

      Being in your 30’s, you are of prime age for political activism and participation. How do you propose to deal with over the hill workers? The tone of your argument suggests that they should be removed from the workforce due to lack of relevance. But what then? How are they cared for?

      This whole notion of being current and out of date illustrates the negative effects of consumer society to it’s core. It embodies the notion of a “Throw Away” society and is a celebration of that ideology. Businesses that embrace that view will not be competitive in the long run and will be gone. Consumerism for its own sake is a dead end and your generation will increasingly feel its negative effects.

      Generational wars are on the horizon. Another divide and conquer technique of the plutocracy. Don’t fall for it. When you think of ways of caring for your elders, many new possibilities arise. Think care, not expendability.

      Reply
      1. Dan

        I care deeply about caring for elders, I participate in movements to stop elder abuse such as the abuse of guardianship.

        I believe that people should be at least a little self aware and move to roles that require less ongoing learning- there are lots of PM, BA, manager roles out there that the experience they bring to the table is invaluable. I like young coders and old managers, personally.

        I’m also speaking only of my experience in my industry, not of workers on the whole

        Reply
    6. justanotherprogressive

      Ah, yes – the “organization man”. There is a reason why corporations love 30-somethings! You have all the answers, don’t you, and all those older people are in you way. And, of course, you are willing to follow management any where they want to go, because that is how you think you will get ahead, isn’t it? And management loves to pit workers against each other because if they work together and stop competing, they may just turn on management, but since competition is what management wants, you are more than willing to go along, aren’t you? And of course, you are “into” all the new technology.

      But think for a moment – don’t you think all those older people were just like you once (or are you “special”)? And don’t you think they learned some things along the way? Maybe all that “new technology” is just more useless “toys” that won’t make their or other workers lives better, or just maybe they’ve seen other managers do similar things and know what the outcomes will be….maybe they’ve learned enough to think for themselves instead of following the “correct corporate line” and realize that perhaps they weren’t as smart as they thought they were in their 30’s?

      I suggest you print out a copy of your post and pin it to your wall. I think you are going to want to eat it when you get into your 50’s…..

      Reply
      1. Dan

        I’m not sure exactly how my comment makes me an “organization man”. Perhaps you could elaborate. I have the opposite problem at my workplace- management loves experience, so in this case I’m against management. Nice try tho bro.

        I’m not saying they should get out of the workforce or even the industry- just that the roles that used to be a good fit such as development may no longer be the right fit for them. Move to another role- PM, BA, etc.

        They were like me, but you know what, I had the ability to see that I was already getting out of date for development and jumped on a different role where my skills could be more useful. All I ask is for people to examine their skills and abilities and to evaluate what roles are best for them. If you have to Google Spring and you’re a Java developer then you shouldn’t be a Java developer.

        This has nothing to do with the corporate line. This has to do with experience in dealing with workplace issues. I do love the angry old man act though.

        No need to print it out- I already came to the realization that certain things passed me by and that it was time to switch roles.

        Reply
        1. jrs

          Those other roles may be even poorer fits though. PM, BA, etc. requires more extroversion than a lot of coders have, so those would not be good moves at all, but disastrous missteps. Honestly they might be far better off becoming accountants, at least they could probably still be pretty seriously introverted if they are, not forced into being extroverts, and I don’t think anyone will care quite so much if they are young and hip on the latest greatest. However trying to get hired after a mid-life career move might not be so easy either, they aren’t shining 21 year old grads anymore, and there is how to pay for school, how to make time for it etc.

          Reply
      1. Dan

        I formerly was a developer, then moved to modelling and found I couldn’t hack it with my level of math skill, and now I do product management in the finance industry.

        Reply
    7. dk

      As a middle-aged fella pushing 60, I can generally agree with this evaluation of older tech workers. But many of those folks were a disaster from day one.

      I saw that you mentioned ORMs and lambdas and delegates… these may be presented as “new” features, but they’re not. Back when there was only byte code and assemblers, using a record block to hold the entry points for chunks of data and code wasn’t called “object oriented”, but we did it anyway, in assemblers and in C. Delegation got ignored because pea-brained never-had-a-real-job academics assured everyone that inheritance (and only inheritance!) was easier to understand and more manageable. Mixins? It sounds so crude, so inelegant. Theory vs reality, pride vs practice.

      ORM’s have been around for decades, they just weren’t “hot,” in large part due to resistance from, yeah, those guys. (I say guys because non-male programmers aren’t permitted to skate on incompetence and macho conviviality). “Too complicated” and “that’s not what objects are for” seems to ring a bell.

      And lambdas have been around since well before Smalltalk-80, and that was… 1980. Granted, it took forever to get into a wider range of mainstream languages… guess why, guess who.

      As for WebAPI’s (and pipelined production and agile), yes, distributed architectures have taken large system architecture to the next level. That’s actually new, but it’s the resolution of decades of mistakes and fumbling. Again, the very antithesis of the old school’s love of big monolithic blocks of tightly bound code and data, where they can settle in and look busy and demand a larger budget.

      So if many older programmer don’t get it, they never got it in the first place. Further lack of competence on the part of managers/execs (along with population factors) has allowed these posers to survive their own ineptitude for decades.

      Technology being generally understood as magic by many, it was, and still remains, easy to pose as a techno-geek of some kind (especially if one has bought a certificate or several. And the trick has kept working, and now the more ambitious one have moved up into management (which they may actually be better at, at lest no worse than bad), or they’re clogging up the job market.

      Easily more than half of the professionals [sic] in any industry are not particularly good at their formal jobs. Too many are one-trick ponies that stumbled onto a solution for a single problem, wrote it up expansively on their resumes, and are now peddling the same solution to every problem they run into.

      Economics, medicine, military/political strategy, entertainment, it’s everywhere. Post-modernism is one of the contemporary terms of a different aspect of this stagnation.

      Wait, it gets worse. THIS USED TO WORK!!! Before new technologies (and the supporting hardware) started coming and going in increasingly shorter cycles, it was actually viable for a human individual to learn one thing, one narrow skill, and be valued for it for repeating the related task for the rest of their working lives.

      This approach operated in a much smaller population generating fewer challenges in the first place, as well as less urgent competition from within the group, we can see that a) things have change drastically within a couple of generations, and b) we haven’t caught up conceptually with the impacts of the changes.

      Reply
  14. RBHoughton

    We did that in Hong Kong on the last occasion the economy jumped ahead of government managers. At that time primary and secondary schools had adopted a two-shift style to ‘educate’ twice the number of students by operating morning and evening schools.

    The corresponding initiative in biz was to re-employ females who have left to run households and have babies. They likewise rejoined employment on shift basis depending on when their own children were at school. The initiative involved all sorts of work not just office workers. I recall having some coming in at 8am for the day shift and others arriving after noon for the late shift. It was a good example of using the available talent. Our office was rented 24/7 so we got a better return from the landlord too :)

    Reply
  15. jackiebass

    The short comment before the article tells all. Companies don’t want to invest in people to become their workers.

    Reply
  16. ambrit

    It’s curious that I’m embarking on a new “career” in my early sixties. Grunt labour disguised as “recycled skills synergy.”
    I find the corporate “masters and mistresses” pay almost no mind to the needs of the workers now. The commodification of labour is the mantra. We came in last Sunday to clear out a backlog of merchandise sitting in our little salvage stores’ warehouse section. Half a day did a lot of good ameliorating the problem. Expectations among the workers were muted but basic. A little overtime to help catch up on the bills at home. Now, yesterday, the manager cuts everyones hours for the rest of the week. Corporate, his excuse, the perennial one, won’t let him pay overtime this week. All overtime is verboten. When tasked by yours truly with pulling a bait and switch on the workers who came in, the manager started spouting the old, this is for the good of the “team” b.s. I told him in front of several others, not a good career move, I’ll admit, that he had poisoned the well with his workforce. He didn’t understand.
    All this has come about as a result of understaffing the store. I was originally hired to build furniture, bicycles, lawnmowers, etc. Next, I filled in as the morning person who did the price changes and signage. When an assistant manager came along for that task, I ended up in the back room helping with staging merchandise. Now I’m running the forklift, unloading the stock from the daily supply truck, rearranging earlier stock, and staging stock for placement on the showroom floor. Lastly, I load all of the trash, cardboard and return stock back onto the truck. All trash is sent back to the warehouse for “inspection” before going to the dump. Someone must have been stealing big time. The cynic in me thinks that corporate doesn’t want to pay for trash services at the individual stores. those trucks are running to the stores from the warehouse daily, right? Why waste the opportunity to utilize the otherwise ‘wasted’ resource?
    I’m doing all of this for $8.50 an hour. I am one of the better paid workers here. I have found nothing ethical that pays better yet. All of the local commercial plumbing projects are now run with one or two “White Men” (TM) supervising crews of south of the border job shoppers. If things get any worse at the ‘Chicken Palace,’ the logo is a chicken, I’ll use my broken Spanish and apply to a big construction site as, say, Ignacio Reichsmann from El Salvador. Maybe then I’ll get something better for my pains.
    No wonder America is falling apart. It is being run by greedy idiots.
    Rant over. Sorry if I stepped on any toes.

    Reply
    1. cnchal

      Too young for WalMart? They have their labor shortage figured out. After being the driving force in the planned shutdown of American manufacturing, which now isn’t there to generate new wealth to pay for what would have been descent pensions for those working, they have a ready pool of desperate older people to draw from. That’s evil genius.

      Good story about your work day. You have my sympathy.

      Reply
      1. ambrit

        Thanks. What I have learned is that “portable” skills are irrelevant to management. It’s all about the bottom lines, those of every manager, as above, and the firm. The idea of criminogenicity applies to employment in spades. If employment isn’t a racket, I don’t know what is.
        A few people who work at the Chicken Palace also work at WalMart. Most of them are fairly young; they have to be, considering the grueling pace they have to hold up under. They universally mention constantly changing managers and excessive expectations for work loads.

        Reply
  17. TG

    Indeed, well said.

    One is also reminded: there is not, there never has been, there never can be, a labor ‘shortage.’ The term itself is absurd. No society in all of recorded history has ever actually run out of workers. It does, however, sometimes happen that employers are unable to find workers at low wages and low benefits. This is otherwise known as prosperity, as employers bid up the wages of a limited workforce, and invest in training and increases in productivity to make better use of a valuable resource. The work always gets done, the issue is simply how much the people doing the work get paid.

    A labor ‘shortage’ is a good thing. Would that the world had more of it.

    Reply
    1. JBird

      >>I told him in front of several others, not a good career move, I’ll admit, that he had poisoned the well with his workforce. He didn’t understand.

      No wonder America is falling apart. It is being run by greedy idiots.
      Rant over. Sorry if I stepped on any toes.<<

      I don't you are stepping on any toes. You might be accused of heresy though as we have a cult running our world.

      Blast. Disposable skills, disposable knowledge, disposable jobs, disposal people, disposal companies, and I think disposable nations, and countries, all being sacrificed to the Gods of the Free Markets, and of Capitalism, at the behest of the priests call the Job Creators and their Acolytes in the media and government.

      Reply
      1. ambrit

        It’s a shame that we don’t also have enough “disposable” Econometric Priests. Perhaps if we re-instituted the practice of sacrificing the leaders when things get bad….

        Reply

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