On the latest Facing the Future, I was joined by Richard Jackson, president and founder of the Global Aging Institute and Concord Coalition Executive Director, Bob Bixby. We discussed the second paper in a new series called The Shape of Things to Come, a joint effort by GAI and The Concord Coalition. The paper is titled, “The Case for Longer Work Lives.”
[Note: Portions of this week's Facing the Future can be seen in the video clips posted below.]
Jackson said that many people believe that the only policy responses to the nation’s demographic shift as the population ages are difficult and painful tradeoffs, but he explained that there’s another option.
“There’s another kind of response that could greatly mitigate the need for those tradeoffs,” Jackson said. “What we’re talking about, of course, is longer work lives.”
He added that working longer is both a natural and necessary response to the aging of America, especially in the context of how life and health spans have improved dramatically since WWII.
“Back in 1950 … a 65 year old had a 1-in-4 chance of living to 85,” Jackson said. “Today, the odds are 1-in-2; the typical American today spends nearly the last third of their adult lives in retirement.”
Bixby provided context as to why encouraging longer work lives is a topic of focus for the organization right now, while a pandemic is raging and millions of people are out of work.
“The Concord Coalition is always focused on the long terms,” he said. “When we come out of the pandemic, which we will, we need to look to the long term growth of the economy.”
“We’re going to have to have two things for stronger economic growth in the future,” Bixby added. “We’re going to have to have better workforce growth than current projections, and we’re going to have to at least meet productivity projections, and hopefully exceed them … those are really the components of economic growth.”
He said one way to promote workforce growth is to take advantage of longer life expectancies by encouraging individuals to work longer.
Jackson said that extending work lives would have substantial benefits.
“There’d be economic benefits,” he said. “Longer work lives could help offset this demographic drag on growth.”
“If workers aged 65 to 74 … were as likely to be employed as younger adults, that would add roughly half a percent to employment growth and GDP growth,” he said.“By 2050, the economy would be 15 percent larger; that’s a big deal.”
He also highlighted fiscal benefits as well as individual financial and health benefits.
Jackson explained that the goal is not to have everyone work until they drop, or even work longer, because there are many people that would find that a hardship because of physically demanding professions.
“The reason I chose 65 to 74 is because the overall health profile and capacity for work in the 60s and 70s isn’t all that much different from the 50s or even the 40s,” he said. “The 60s, even the early 70s, is no longer old age; it’s mature-midlife.”
Jackson also said that policymakers can encourage longer work lives with minor tweaks to Social Security and minor tweaks to Medicare, but they do not necessarily have to raise the retirement age to qualify for benefits.
Policy recommendations and job market changes Jackson suggested, include:
New investment in lifelong learning
More flexible leave policies
Make Medicare the primary-insurance payer, as opposed to its current, secondary-payer status, for employers with retirement-age employees
Engage in two minor reforms in Social Security: change the benefit formula to include a worker’s entire wage history, not just the last 35 years, and reduce FICA taxes for workers beyond the full-benefit retirement age.
Jackson added that, relative to other countries, we are well positioned to engage in these changes as we adapt to an aging population. In fact, the U.S. has already made some progress, but there is more to be done.
Click here to read Jackson’s issue brief, “The Case for Longer Work Lives.”
Hear more on Facing the Future. I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Play Music or with an RSS feed. Follow Facing the Future on Facebook and watch videos from past episodes on The Concord Coalition YouTube channel.