This author’s words are too valuable to not share…
Published on August 1, 2017
By Dean Barber, Principal at BBA: A Good Process Ensures a Good Product
In my last blog, which I modestly titled, “The Future of Everything,” I said that predicting how technology will affect the future of work is pretty much a fool’s game.
We should keep in mind John Kenneth Galbraith’s reminder that, “We have two classes of forecasters: Those who don’t know — and those who don’t know they don’t know.”
The older I get, the more I realize how much I do not know. But if I were to hazard a guess, it would be that AI-engineered robots will probably not take all of our jobs and then kill us. But I could be wrong.
Also, as I outlined in my last blog, I believe the findings of a group called Shift: The Commission on Work, Workers, and Technology, a joint project of New America and Bloomberg, has great value as it portends to the future of work.
The Commission outlined four core scenarios that could play out in the next 10 to 20 years, each reflecting whether there will be more or less work, and whether work will exist in the form of jobs or fragmented into “tasks.”
If you want a quick snapshot of those four scenarios, again I would refer you to my last blog or better yet go to the Shift Commission website.
The future of work will shape cities and regions, but I seldom hear my friends in economic development talk about it. Understandably, much of their focus is on the most pressing question as to whether people in their respective communities have the skills to perform the jobs today.
Disturbing to some, the data shows that the richest cities are pulling away from the rest, with discrepancies in access to education, technology, capital, and networking opportunities.
This is in keeping with Brooking Institution’s reports of the last few years that American cities and metropolitan areas have firmly established themselves as the engines of the nation’s economy and are the centers of technological innovation and global trade and investment.
(I hope to tackle this subject and the notion of innovation districts in cities in an upcoming blog.)
A Profound Impact
Millennials (adults ages 18 to 34), are now the largest share of the American workforce (more than one-in-three American workers), but older adults will have the most profound impact in the coming years on both the supply of labor and the demand for workers.
By 2024, the Shift Commission report notes, nearly one-quarter of the workforce is projected to be 55 or older — more than double the share in 1994. Falling fertility rates and tighter immigration rules mean U.S. employers will likely need to hire and keep older workers just to get the job done in coming decades.
“We will need older workers to do the work,” said MIT AgeLab Director Joseph Coughlin at the Milken Institute Global Conference.
While many consumer companies are gearing their businesses toward a growing “active aging” market, many if not most companies still do not understand that it is in their long-term best interest to retire this whole idea of retirement.
“Older people have so much to offer as workers, colleagues and mentors. It is in the business community’s self-interest to recruit, train, promote and retain them,” wrote Paul Irving, chairman of the Milken Institute for the Future of Aging.
The concept of formally ending work at age 65, while it may have been appropriate in the last century, does not make a lot of sense today. Seventy-two percent of pre-retirees want to work past 65, and nearly half of current retirees either have worked in retirement or plan to, according to the Bank of America Merrill Lynch/Age Wave 2015 report, Work in Retirement: Myths and Motivations.
Major Cost Savings
Eventually, however, more companies will see the light and older workers will become more in demand particularly for reasons of costs. The fact that older workers on Medicare don’t require primary medical insurance will prove to be a major cost savings for employers.
Companies will also like the fact that millions of retirees will move to freelance, part-time or contract employment with no benefits having to be paid.
The Real Gig Workers
While young people are the supposed to be the vanguards of the new economy, valuing happiness over money, gigs over jobs, and flexibility and meaning rather than status and hours at work, older Americans are being more millennial than millennials.
People over the age of 65 are four times more likely to be self-employed than those under 34, and are more likely to work part-time jobs, according to the Bureau of Labor Statistics.
The labor force participation rate, or the share of American civilians over the age of 16 who are working or looking for a job, is expected to increase fastest for the oldest segments of the population—most notably, people ages 65 to 74 and 75 and older—through 2024. In contrast, participation rates for most other age groups in the labor force aren’t projected to change much over the 2014–24 decade.
The rise of “alternative work arrangements,” like freelancing or part-time work, jobs that often lack benefits like health care, have grown significantly in the last decade. As of late 2015, 24 percent of employed 55-75 year-olds were in alternative work arrangements, compared with just 14 percent of prime-age (25-54 year-old) workers, according to the economist Jed Kolko.
Many companies and entire industries are now beginning to realize that they are on the verge of losing a wealth of great talent. As of 2015, almost 33 percent of our workforce – including 48 percent of supervisors – was eligible to retire. Replacing that kind of talent isn’t easy.
A Rapidly Aging Workforce
The workforce is aging because the population is aging. By 2024, the U.S. Bureau of Labor Statistics projects that the labor force will grow to about 164 million people, of which 41 million people will be ages 55 and older—of whom about 13 million are expected to be ages 65 and older.
While they make up a smaller number of workers overall, the 65- to 74-year-old and 75-and-older age groups are projected to have faster rates of labor force growth annually than any other age groups. This in a nutshell means that tomorrow’s seniors will retire later.
Also, it should be noted that the aging population is creating demand for health care jobs, which are projected to lead employment growth over the next decade.
Older Workers are the Future
While the overall numbers favor the millennials, older workers find themselves the future of work. Employers, not wanting to lose valuable knowledge, will do a better job at finding ways to accommodate them, while millions of older workers will transition from full-time jobs to part-time work. Look for growing numbers of older Americans in the gig economy, working freelance, with short-term contracts or with pick-up jobs.
On a personal note, I have come to epitomize that older “boomer” gig economy group. I am a 62-year-old consultant doing contract/consulting work for economic development groups and companies needing help with corporate site selection.
Through the years, I have picked up some knowhow, and I want to continue to grow by learning new stuff. I think of it as expanding my horizons while helping others, which is a pretty good gig.
I’ll see you down the road.
Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at firstname.lastname@example.org
Frances J. Trelease is founder and owner of Boomer Den, LLC. Business owners in and around Hartford and Fairfield Counties: contact us for a list of mature professionals eager to pitch in to help your business grow. http://boomerden.com. Info@Boomerden.com