Maturing labour force trends

New federal Treasury figures show that mature-aged workers are hanging onto their jobs and staying in the labour force longer. Unemployed mature-age workers, however, don’t have it so good.

Courtesy of JSmith Photo’s photos via Getty Images

By Yasmin Noone

Australia’s mature-age workforce is on the up and up, with the latest Treasury calculations showing that the nation’s employers are increasingly retaining more older workers.

New employment and participation rate figures, released by federal Treasurer Wayne Swan at a conference in Sydney yesterday, reveals a steady growth in employment and participation rates among people aged 55 to 64 years over the last 10 years, with the largest increase recorded over the last three.

“Between May 2002 and May 2012, the labour force participation rate for those aged 45 to 64 years increased by 6.2 percentage points to 73.9 per cent,” Mr Swan told the Open Mature Age Employment conference.

The latest figures portray a national labour market where more older employees are being retained by employers, choosing to stay in the workforce and able to hold down a job.

CEO of National Seniors Australia, Michael O’Neill, said the new Treasury figures were “encouraging”.

“For far too long, participation rates [for this cohort] have been at really low levels and there has not been adequate growth at all,” Mr O’Neill said.

The Treasury growth calculation is not just “a flash in a pan”, he said, but instead reveal “pretty good signs” that Australia is moving forward on the issue of mature-age worker retention.

“Over the past 10 years, we’ve seen a greater emphasis on people preparing for their retirement. It’s been more pronounced in recent times as going back a decade, people were becoming more aware of the need to build a nest egg. And that’s one reason why people continue to try and work.

“Secondly, the health of mature workers is certainly better [these days] and hence there is more opportunity for people to remain in the workforce.

“The GFC has also had an impact on [mature-age employment growth trends] over the last three years and perhaps…the other thing is just the sheer demand for skilled and experienced folk has grown.” 

“…The labour force participation rate for those aged 45 to 64 years increased by 6.2 percentage points to 73.9 per cent.Treasurer Wayne Swan

 But, he said, while the employment growth trend is positive, “we shouldn’t get carried away”.

Treasurer Swan also announced that although older workers, already in a job, are staying put, those outside of the labor market find it hard to break through employment barriers.

“On the flipside, mature age workers, once unemployed, can find it difficult to re-enter the labour market, particularly those with limited education or skills that are no longer in demand,” Mr Swan said.

“The figures here are not so encouraging. The average duration of mature-age unemployment (people aged 45 years and above) was 62 weeks in May 2012, compared to 34 weeks for those aged 25-44 years and 24 weeks for those aged 15-24 years.

“And yet participation of mature age workers in the labour market is critical to Australia’s ongoing economic success.”

Mr O’Neill attributed age discrimination as the major cause preventing older, unemployed workers from getting a new job.

“All the evidence remains that the discrimination issue is the most significant impediment facing older workers [getting a job],” Mr O’Neill said.

“Employers don’t simply say I don’t want an older worker. They say they want someone [younger].

“…To some extent, in more recent years – say in the last two or three – the opportunity for [national] growth in employment has presented itself more in the resources area, where there is travel involved for most who take up [the opportunity].

” But older workers might be at a time of their life where they are not necessarily keen to pack up and move, while 25-44 year olds are able to do so.”

Mr O’Neill added that retraining, upskilling and applying for a new job might also be a major employment hurdle for a percentage of mature age workers.

Focusing on solutions

At the moment, Mr O’Neill said, there are positive signs of change for mature-age workers facing employment and labor force participation challenges.

“The issue has got the government’s attention and that’s a real tick,” he said. “It’s on the agenda. And the government has the desire to do things.”

Mr O’Neill believes the federal government should lead the charge and make a public statement about age discrimination in the area of employment.

Next, it should abolish the age limit in its own worker’s compensation schemes, and thereby set a good example.

“At a stroke of a pen, the federal government could abolish age discrimination in an area of their own responsibility by ensuring there are no more age barriers to workers compensation claims.

“Now that would send a very strong message that the government is actually serious about this.”

Mr O’Neill said it would show that they “practice what they preach”. They did it in the area of superannuation, he said, “here’s another opportunity to act on that”.

Further proof

The Australian Human Rights Commission  have also hailed mature-aged workers as key to nation’s future economic growth.

A new report,  prepared by Deloitte Access Economics and released by the Australian Human Rights Commission at a conference yesterday, predicts that Australia’s workforce is set to grow by billions of dollars due to the contribution that older workers will make in the near future.

The Grey army advances says current growth in mature age workforce participation is already expected to see a $55 billion increase in national income by 2024-25.

A three per cent additional increase in mature age workforce participation would mean the national economy would be a further $33 billion larger. An increase of five per cent, the report said, would add $47.9 billion per annum.

“People are living longer, want or need to work longer, and older workers are needed in the workforce if the Australian economy is to grow,” said Age Discrimination Commissioner, Susan Ryan at the Older Workers and business growth strategy forum in Sydney.

“Older workers are the obvious and available major solution to skills shortages currently holding back economic growth.”

“The bottom line is that, were we to see this increase in older worker participation, of five percent, we are talking about an additional three quarters of a million people aged 55 years and older who would be in work instead of having to live on public benefits.

“This would be a massive success, both in terms of growing the workforce and reducing the national cost of welfare dependency.”

Tags: employment, labour, mature, national-seniors, participation, superannuation, treasurer, treasury, wayne-swan, workers-compensation,

3 thoughts on “Maturing labour force trends

  1. This is very encouraging news but there are two caveats. One of the reasons we are seeing more mature age workers in the workforce is due to large cohorts rising up in to the 55 year old bracket. Remember back in 1947-55 approx, we had large birth numbers. We are seeing them enter the 55+ bracket now.

    But clearly more older workers are staying in work longer for a variety of economic and social reasons.

    The other caveat is that while more mature age workers will work longer, most will seek to work part time or casually. One important measure of labour productivity is the net amount of hours worked – not the number of workers. So as the boomers age, we will see the number of hours worked fall. But the fact that they want to work longer is to be applauded and so Susan Ryan’s hard work.

    What we really need is a boomer financial literacy push to ensure they make informed decisions about transitioning to retirement. But that’s another story.

  2. Cause and effect can be strange bedfellows. It is possible also the reason for an increase in the number of mature people remaining in the workforce, other than to recover losses to their superannuation funds is that once they leave its so damned difficult to return. It could also be that many mature workers have finally begun to recognise that they need to develop skills and competencies that they didnt need ten years ago, and therefore have become more valuable.

    Whatever the reasons, its good that the numbers are increasing as it is a complete waste of collective wisdom to lose such a large group of people in a short time.

    Mr Swan is correct in say let’s not get carried away with the figures as the gap between being able to stay in the workplace and wanting or having to retire is becoming shorter and the overall percentage of the population in the retiring baby boomer ranks, at around 26% remains the same. Eventually all these people must leave the workforce and the predicted shortages will then become obvious.

    The challange for aged care workers remains, how to do more, and better, with less people.

  3. The take home message i got was that pushing back pension and superannuation acess age will keep people at work, don’t worry about that.

    But for those who don’t have attractive skill sets, or are simple unwel or tired, we might be simply damning them to longer years on grossly inadequate income such as the Newstart Allowance.

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