The yawning gap in the plan to keep older Australians working

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There’s a yawning gap in the plan to keep older Australians working

A key reason for deciding to retire has to do with getting tired at and through work, how that tiredness affects partners and families. Andreas Cebulla, University of Adelaide

In the past decade a 30-year trend to earlier retirement has been reversed. In OECD countries the average age at which people retire has risen by about one to two years. In Australia the average age has risen from 64 to 65.6 for men, and from 61.8 to 64.2 for women.

For the Australian government, though, this isn’t enough.

In a speech last night, Treasurer Josh Frydenberg called Australia’s ageing population an “economic time bomb”.

Over the next four decades the number of Australians working and paying income tax for every person over the age of 65 would fall from 4.5 to 2.7, he said. The proportion of people over 65 in the workforce would therefore have to grow substantially.

The government needs people to keep working and paying income tax to offset spending on age pensions, health care and the like.

Its most obvious policy stick is to raise the eligibility age for the pension, which is now 66 but will be 67 in 2023. Raising it further, however, is something the government has rejected as not on the cards. Instead Frydenberg is talking about more training for older workers to keep their skills relevant.

Read more: How we could make the retirement system more sustainable

But my research with Mikkel Barslund, Jürgen Bauknecht, Nathan Hudson-Sharp, Lucy Stokes and David Wilkinson suggests this is a very small and unappealing carrot.

Our findings suggest there’s a limit to retirement ages rising organically. Because there comes a point where work, especially full-time work, just isn’t something most people want to – or indeed can – do.

The reason has to do with getting tired at and through work, how that tiredness affects partners and families, and the limit to which workplaces have shown themselves capable of accommodating the needs and preferences of older workers.

This is something that can only be addressed by dramatically reconfiguring work options.

The limits of job satisfaction

These conclusions are based on two studies into the experiences of older workers.

These studies have been based on data gleaned from two large European surveys, the Survey of Health, Ageing and Retirement in Europe (SHARE) and the European Social Survey (ESS). SHARE is a database of information on the health, socio-economic status and family networks of about 140,000 individuals aged 50 or older in 28 countries. ESS measures the attitudes, beliefs and behaviour of people in more than 30 nations. The demographics of these surveys means the results are relevant to the Australian population.

The first study used data from SHARE to model the link between the step into retirement, job satisfaction and the factors that shape job satisfaction.

The results found people happy in their jobs retired later than those who were less satisfied with their job and its working conditions.

That’s perhaps not a surprising finding. But what is interesting is that our modelling showed that, if every mature age workers’ job satisfaction was raised to its highest level, the effect on retirement would still be small.

It would add, on average, about three months to current retirement ages.

The effect was stronger for women and those with tertiary qualifications. If working conditions made them more satisfied with their job, they would spend an extra 9 to 12 months in work before retiring.

Read more: Keeping mature-age workers on the job

Job satisfaction is only part of the story, though. The second study, using data from ESS, highlights the obstacle of increasing tiredness to longer working lives. This is so because tiredness after work can adversely affect relationships with partners and families.

Interestingly, the significant factor in the perceptions of partner or family is not the number of hours worked but ability to determine a daily work schedule.

Those with greater influence over their working day were much less likely to find their partner or family “fed up” with their working beyond the time they could have retired. This greater control did not eliminate tiredness, but it appeared to help non-retirees better balance work with home life.

Tangible measures

Our studies do point to a few tangible things that can be done do to make working in later life more bearable.

Improved job satisfaction could come from reducing time pressures, minimising physically demanding work, better pay, skill development opportunities and more autonomy. In particular, greater flexibility over working hours would help.

These are things, of course, that might improve job satisfaction for any worker, regardless of age. But they are within the control of the employer, not the government.

So perhaps what Josh Frydenberg and the federal government now need to talk about is not just a narrow focus on education or training to help older Australians remain in the workforce for longer, but how to encourage better working environments for everyone, regardless of age, gender or occupation.The Conversation

Andreas Cebulla, Senior Research Fellow, South Australian Centre for Economic Studies, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Written by The Conversation


Total Comments: 52
  1. 0

    Frydenberg can’t stay in Parliament forever. One day in the future he, too, will be unemployed and wondering why no one will hire someone with his credentials. Perhaps he will be eligible to take his super by then; perhaps not. In any case, he will have to navigate the enormous gap between forced retirement and pension age. No one will hire him because he’s considered too old. Wonder if he’ll change his tune when the time comes…

    • 0

      I don’t know, Anne. Frydenberg, like many of his ilk, will be voted out at some stage and will then receive a very good parliamentary pension that most of us would drool over. On top of this, as an ex-minister, he’ll probably be offered some cushy and very well paid jobs. Of course, unlike the masses that he wants to work longer working lives, he won’t need to be working when he is in is 60s and 70s.

    • 0

      Anne, Frydenberg will be on a Parliamentary Pension. For example, since his defeat Tony Abbott now received $300,000pa. In fact, all retiring MPs are receiving pensions higher than their base salary and receive additional in loadings based on previous responsibilities. They also receive a Lifetime Gold Pass for travel. So, Frydenberg has some hypocrisy there because he is never going to be in the position of having to look for work when he’s 60.

    • 0

      That’s not so Anne, the likes of Frydenberg will always get a job as Used Car salesperson, no doubt about it. but, the question will be , ‘ Would you buy a used car from this man?”

    • 0

      Not likely Anne. He has a super payout for life that is very generous.

  2. 0

    Where my wife teaches (a government primary school), a few years ago the principal posted an organisational chart with a green dot against every older employee – signifying that these people are considered surplus to requirements, too expensive to keep employing and need not apply for promotion at this school.

    This is the extent of the ageism in the workplace that older people face (probably past 50+ years of age). Note that this is in a government workplace where ‘Human Resources’ regulations supposedly work against this type of bullying, so imagine how this works in private industry!!!

    Needless to say, my wife is retiring in 4 weeks at 65 years and she is only just going to survive the year.

    Good luck with your brilliant ideas for keeping older workers in employment JOSH!!!

    • 0

      It would have been hard for your wife to keep teaching to age 65, PJ. It is such a stressful job. It mightn’t be physically demanding but it certainly is mentally and emotionally demanding. While I retired from full time teaching in government schools at age 60 (I couldn’t have lasted longer there!), I did casual teaching which, at times, was sheer hell until about 70. I hope she just leaves teaching and never does any casual work. Good luck!

      The likes Frydenberg would have no concept of what it is like.

    • 0

      That discrimination is appalling. I would think the teachers’ Union would (should?) have something to say about those ageist green dots.

    • 0

      The other thing about this is that you will have little idea about the ageism until you are faced with it yourself (makes you also appreciate how people must feel when faced with other more aggressive forms of discrimination).

      Also the point about the Teacher’s Union – the numbers of young teachers in the Union now is virtually nil, so their influence has been effectively cobbled.

    • 0

      They won’t even employ older teachers as they cost more than a fresh uni grad.

    • 0

      PJ, regarding your comment “Note that this is in a government workplace where ‘Human Resources’ regulations supposedly work against this type of bullying, so imagine how this works in private industry!!!” Alexii also to note:
      In private industry, it is a jungle out there with discrimination widespread – especially based on age, race, origin, colour, etc. Surprisingly, maybe thanks to feminists, females are doing quite well, in fact far better than the other categories I mentioned.

      I can’t see the above situation changing, so Josh F needs to just put a sock into his mouth and stop pretending the country gives a fair go to older workers or job applicants. He is precisely the type of person (too young) who has NO understanding of the situation in the real world. When a Senior Manager hires a young chappie below him as a Manager who will not answer back or threaten his own role, then that young bloke WILL NOT hire any older person below him / her who may be more experienced and smarter than him / her! Now look at which companies have young CEOs (CBA comes to mind immediately, many more) and you can see what’s the future there.

    • 0

      I should have mentioned religious views as well – we all know the Folau case which had nothing to do with his rugby performance or any actions by him against the rugby game or administration.

    • 0

      PJ, 2 years ago I worked in a hospital and wanted to do ‘transition into retirement’ after an accident. I worked Monday to Friday and was wanting to cut back to Tuesday to Friday – Monday being our quietest day and one of the other staff members was willing to work that day.
      It was knocked back because ‘they needed a full time person doing my job’. Worked to retirement age then handed in my notice. Apparently the place is a mess now.
      Yes that is blowing my own horn, but I had been there 25 years and knew the work inside out. It is a very, very busy place where you needed to be able to think on your feet and solve problems almost instantly.

  3. 0

    Funny that. Josh has only worked in the Public Service … never worked in the real world in either an office, on the road in sales, at a work site as a tradie.
    Hence has zero understanding nor knowledge of the “pressures” creating “tiredness” mentally nor physical “tiredness” …. methinks he needs to vacate his ivory tower in Canberra’s wonderland and soend a year or two working in a REAL job.

  4. 0

    There is age discrimination in the workforce which PJ knows. Even with the extra training this occurs. Also, Some people finish at 65 and therefore will be on Newstart until the retirement age which will eventually be 67 soon. The government has saved spending money as Newstart is less than retirement.

    • 0

      I have been asked – ‘why would someone your age want to work?’ ‘Can you lift items?’ (hobby is horse riding, so I lug around bales of hay, bags of 30 kg chaff, tow horse floats, caravans, etc). ‘How would you handle someone younger giving you orders?’ ‘Will you get tired working a 5 hour shift’? Even – ‘are you comfortable driving at night?’After 2 years, over 250 applications plus cold calls without a hint of a job – happily will no longer apply. A total waste of time. Why go to all the trouble when I know I don’t stand a chance? Funny how my resume is often described as – ‘you are exactly what we are looking for’. That is, until they see me. I DO dress and present well, I am NOT the hunchback of Notre Dame – but the minute they see you are senior – the interview is finished.

    • 0

      I have to agree with older&wiser. I was on Newstart for a couple of years. Did my job apps diligently. I got three interviews and no responses to any other apps. The three interviews were all conducted by people who were merely interested in me telling them about how my former workplace operated, so they could possibly implement ideas themselves. They had no intention of hiring an old chook, no matter how well-qualified.

      I have not been on Newstart for the past year. However, my savings will not stretch beyond more than a few more months. I’ve enjoyed the respite, but am hoping to find that unicorn employer in the meantime.

  5. 0

    Let Slow Mo.lead by example and work then retire as most Australian do.What a bunch of arrogant mongrels they have become since their election win.The Labor party have to lift their game as well and try to help pensioners.

  6. 0

    Fryburger & his onions keep throwing out something every week by doing that we forget that they could not run a up in a brewery

  7. 0

    Basically where Frydenberg says :
    “”Over the next four decades the number of Australians working and paying income tax for every person over the age of 65 would fall from 4.5 to 2.7”
    Is really a lie because it ignores the growing cohort of self funded retirees !! The govts since the 1970s discontinued and stole the funds put aside for everyone to receive a universal aged pension !!

    • 0

      Thanks johnp for reminding the younger readers of that fact. Let’s not forget that ever.

    • 0

      John, let us not forget that the average population growth in Australia between 1946 and 1964 (baby boomer generation) was 200,000 per annum. The population growth from 1980 to 2005 was about 300,000 per annum.

      So the figures tell me there are 100,000 more people who could be paying tax than those retiring.

      I suppose the way the questions are phrased by the Government to Treasury will give them the answer they want rather than the truth.

      The above averages are from Bureau of Statistics.

    • 0

      Quite right, johnp. Lies from politicians – what’s new. Must keep reminding them the tax rate still includes the contribution for paying age pensions.

  8. 0

    How come we oldies should work longer years when youth unemployment is high? Let the surfer boys do their bit not us oldies. All the boys and girls daily in our surf around here cannot be on night shift, too many of them. Reason might be that the age pension is higher than the dole and the oldies are easier to kick. Let us stop kicking that old can around along with the family home inclusion stories. These issues are getting to be a bore.

  9. 0

    Perhaps he means training of employers in the benefits of employing and retaining people over 65!

    Oh and what is Mr Frydenberg going to do about the little matters of workers comp insurance, income protection insurance, even life insurance all of which peter out the older you get.

  10. 0

    We don’t all leave our jobs by choice. I was made redundant at 57, tried to get another job but no luck. I believe many bosses are prejudiced against older workers. At 75 I don’t want to be in the workforce, but I was a highly qualified social worker and could have had another 10-15 years after that redundancy. The culture needs to change if people are expected to work for longer. Otherwise nothing will change

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