The Future of Work Podcast

-Hello and welcome back to The Future of Work podcast.

I'm Sophy Fisher.

[music]

-Let me start by giving you some figures.

More than 10% of Japan's population is now aged 80 or over.

For the first time in recorded history, there are now more elderly people

than young children on our planet,

and a child born today in Europe has a 50% chance of reaching the age of 100.

What that shows is that people are living longer than ever before.

This issue of an aging population has huge implications for the world of work,

for businesses and policymakers, as well as for the workers themselves.

Yet, when we compare it to some of today's other megatrends

such as climate change and technology,

the aging of the workforce seems not to get

the same level of attention.

In this program, we're going to try and shift that dial a little.

With me now is Dorothea Schmidt-Klau.

Dorothea is the Chief of the ILO's Employment,

Labour Markets, and Youth Branch in the Employment Department.

She's also done a lot of work on the issues surrounding

an aging workforce.

Dorothea, welcome, and thank you very much for joining us.

-Thank you very much to you. [chuckles]

-Right. Let me start by asking you a fairly basic question,

which is that many people perceive this problem of an aging workforce

as being a problem of the rich developed world.

Is that actually the case?

-Well, maybe a figure will help there, which is adding to the great figures

that you already mentioned.

We know that the aging

that has been happening in the course of this centenary

and if we look at it,

it has been dominated so far by developed economies.

As of now,

it's actually the developing economies who determine that trend.

Developing countries will age the most rapidly compared to others.

The less developed countries will see their older population rise by nearly 350%

until the end of the century.

Developed countries are likely to see less increase.

It's only 70%.

Well, of course, they are already older.

Still, what we will see is that aging will continue

and then will really be dominated in least developed countries.

-This is a global problem now?

-It's absolutely a global problem, especially for one reason.

There is one thing we know for sure,

you better grow rich before you grow old.

What we see in developing countries, they will not be rich

before they start growing old.

-If you haven't managed to get rich before you get old,

what are the consequences of that?

-It's that older people will move directly from the job,

if ever they have one, into poverty.

Because they are the fastest growing part of the population,

we will see poverty rates increase again.

Everything we gained will be lost just simply

because we don't know what to do for the older people.

-Now, in a lot of countries,

particularly in the richer developed countries,

there's an awful lot of talk about getting more people back into the labour force.

"We haven't got enough labour supply.

What are we going to do about it?"

Politicians talk about getting young people back into the labour force.

They talk about getting

a higher proportion of people of working age

back into the labour force.

There's a very,

in many cases, acrimonious argument about the pros and cons of migration

to improve your labour force,

but there isn't much talk about keeping older workers in the labour force.

Why do you think that is?

-Well, I think

we have a huge problem of perceptions here.

We think that older people are not as useful for the labour force

as our young people, which I don't think is the case,

and which people working in this area clearly show

that it's not the case.

The other thing is that it's very interesting to see

that law determines whether you can work or not as an old person.

We have the mandatory retirement ages in literally all labour laws.

It just says, "As of a certain point,

you're not allowed to work anymore," which is very unique.

-Right.

Let's talk a little bit about that point of perception

that you raised.

I'm going to give you a couple of commonly held views,

which may be myths.

You can tell us. You tell me whether they are true or false.

First one,

older workers get sicker more often and they take more leave,

true or false?

-Absolutely false.

Actually, what we do see in many studies is older people,

especially with chronicle diseases, they know how to handle them

because they've handled them all through their lifetime.

We also see that older people have no intention to stay at home

more than younger people when they are sick.

It's actually almost equal.

There is no reason to believe that they have less working days in a year

than young people do.

-Right.

Myth or view number two.

Older people can't learn,

and they can't pick up new and modern skills,

true or false?

-Absolutely false.

The reason for that is yes, it's true,

if you stop learning,

then you lose the capacity to learn.

The problem is not that older people cannot learn anymore.

The problem is that many of us, at a certain point in our career,

we stop learning.

You learn a lot when you're young.

Then you have other priorities, families,

making a career, but without having to invest further into learning.

Then, all of a sudden, you think at the older age,

you want to learn something again,

then it becomes difficult.

If you learn throughout your life course, then there is no issue.

Many studies actually show that older people are just as capable

to learn as young people are.

-Argument number three against older workers,

they're less productive. -Again, absolutely false.

We don't actually see any impact on productivity

or productivity increases of older people way beyond the 60s.

On top, what we have with older people is that they have more experience

than young people.

Even if there was a slight decrease in their productivity,

there's a huge increase in their knowledge,

in their capacity to do things, in their experience,

and that certainly overcomes, if ever there was a gap

in terms of productivity.

As said, this gap only comes up very, very late in people's lives

as long as they stay healthy.

-Indeed. I was reading a report in the Financial Times of a study done

by the British Medical Association that essentially found

that the capacity of healthy older people to perform,

they perform as well as their younger counterparts,

and in some ways, their capacity to process complex problems is greater

because they do it on the basis of experience.

Would that essentially be in line with what you found?

-This is exactly what we find as well, and this is exactly why our employers

should not shy away from hiring older people.

-Why this barrier

against hiring older people?

I suppose one should simply call it what it is, which is ageism.

Is that what it is?

-It's absolutely true.

Ageism in the workplace is identified as one of the big, big challenges.

Older people report a lot of cases where they feel

that there's discrimination against them.

Why it is the case?

Well, there is one very old argument, which still has some truth,

and that's just simply because older workers

in most of the systems are a bit more expensive than younger workers.

Then they are more expensive because they bring

additions that young people cannot.

In this regard, maybe another interesting fact

is that we find that enterprises created by older people are much more sustainable

than those created by young people.

All these fancy start-ups, it's a great thing,

some will survive, but the majority might not survive.

Whereas if an older person

opens an enterprise, it usually stays open and is successful.

This is A, because of the experience.

This is B, because older people don't take the risk.

They only open a business if there's a high chance to succeed.

The last reason is they have their networks,

so they really do something which is good enough to be done.

We shouldn't underestimate older people even when it comes to opening

new businesses.

-Let's just turn to the question of pensions for a little.

Because if we have an aging global population

and there are fewer children being born,

presumably both state and private pensions are going to be put

under increasing pressure

because who is going to be working to pay for those pensions?

-This is one of the big, big problems,

and this is maybe why the developed economies

are more and more interested.

We see we are getting closer to collapse of pension systems.

Just to manifest that in figures,

in Africa,

you have, for the time being, 5 people at older age

who depend on 100 people at working age.

Do you know what the figure is for Europe?

-What's the figure?

-55 people

at older age depend on 100 people

in the working age. -It's not sustainable?

-It's not sustainable,

and that's only the older people.

There are still the younger people who also depend on these 100.

It's very important to see that this increase in dependency ratios,

the ratio between those who are working and those who are not working,

become unsustainable, and we really need to do something about it.

-Pensions are a good thing, aren't they?

The money that is dished out in pensions gets spent, doesn't it?

It doesn't get saved. Actually, it's boosting consumption.

-Absolutely, and this is what social protection

does in general.

It's not just the case for pensions, it's for all the cases where you protect

those people who definitely cannot work anymore.

There are a lot of people at old age who cannot work anymore or who do not want

to work anymore.

I think it's very important that there is a very good pension system in place.

Actually, the ILO has done some estimates because especially

in the least developed countries, people don't want to talk about aging.

What we actually try to estimate is how much impact does this have

if in the least developed countries, we only introduce a very,

very basic pension system but for everybody.

In the least developed countries, right now, we have 23.2% of people

covered by a pension system.

If everybody gets a minimum pension, it would mean that the GDP

in the least developed countries would increase by 14.8%

over the 10-year period,

and the poverty would be reduced by 6 percentage points,

which is enormous.

Plus, we would see a huge impact on gender equality because right now,

what we see is that women have a much higher likelihood to be poor

when they are old.

This is a huge impact.

Now, people will say,

"Yes, but where should the money come from?"

Well, it's only 1.6% of the GDP of these countries

that would be sufficient to actually finance.

The reason why you see this huge impact is because once you're protected,

you can buy things,

you can contribute, not just to work-life, but you can contribute

to your community,

you can contribute to the well-being of your family,

and all this has positive impacts on GDP.

-Presumably, the sort of things that older workers or pensioners buy

are different.

I think that they buy more services rather than products,

so this is actually going to reshape economies as well.

-Absolutely. It's a reshape that is very positive,

especially for women

because the type of services they are asking

for are often care services, and care services are dominated by women.

By putting them in a position so that they can actually pay

for care services or that their care services are protected,

we create jobs for women including for young women.

-Presumably, it's domestic jobs because you can't outsource

your care services to the other end of an internet connection.

-That's very true, so it would be very good

for the local economy.

-Okay.

Let's talk a little bit about what changes we need

to get more older people back into the workforce or encourage them

to stay in the workforce.

We've already talked about the issue of aging, so I guess

perception is a big one.

-That's one of the big ones.

Just to say upfront, policies matter.

Policies really make a difference.

You need to have the right policies in place to actually make it possible

that older people work longer.

Other than that,

you have to increase the labour supply.

That's definitely the case, which actually really,

really means that you have to put people in a position to work at older age.

That means very little things but very big things at the same time.

It means workplaces that take into account the needs of older people.

With new technologies, that can be easily done.

Older people preferably work from home, if this is possible.

Older people might not want to work full-time but maybe just part-time.

Older people might need a bit of different technical equipment

from younger people, but all this is feasible, and it's not even very expensive.

-They presumably maybe want to do fewer strength-based tasks

and perhaps more intellectual-based tasks or service-based tasks.

-We should let them do that because this is what they are best at.

The thing is you cannot just simply do the same things we do for young people

for old people.

They have special needs.

If we want to get their full potential, we need to adjust to these needs.

Above all, as we already discussed, we just need to make sure that people

understand that older workers can contribute

just as much as young workers.

It's actually a mixed workplace, where you have older and younger people

working together,

where you get the maximum out of working and out of these generations

actually linking to one another.

-The kind of cross-fertilization of skills and talents and experience?

-Absolutely. Of course, we know that younger people,

they more like new technologies

whereas older people might not like that so much,

but then there are other issues that older people are very good at.

We talk about at the workplace mixed teams.

We talk about mentorship programs where older peoples mentor young people,

while young people mentor old people, for example,

in the use of new technologies.

That really makes a difference.

It also helps to overcome all these perceptions.

-Well, I think it's a fascinating topic and perhaps one that requires

more attention from policymakers.

For the moment, that's all we have time for.

Dorothea, thank you so much.

Let's leave it there for today.

Hopefully, we can come back to this topic in the future.

My guest has been Dorothea Schmidt-Klau, who is chief of the ILO's Employment,

Labour Markets, and Youth Branch.

Thank you to you, our audience.

Please join us again soon for another Future of Work podcast.

Goodbye.

[music]