Controversy 10

Is Retirement Obsolete?

Is Retirement Obsolete?

The 20th century could be called the “age of retirement” After World War II, there was a consistent decline in

labor force participation with advancing age in all industrialized countries

For society, the decline in labor force participation represents a loss of productivity by older people, for several reasons: People are now living longer People are better educated People are in better health than ever before

History of Retirement

Widespread retirement by workers only became possible after the industrial revolution of the 19th century Prussian Chancellor Otto von Bismarck first

introduced the age of 65 as the basis for pension According to statistics:

The overwhelming majority of both men and women are retired from the labor force after the age of 65

Older men tend to move away from work and toward retirement

History of Retirement (cont.)

Retirement is not usually a negative event Leisure can be viewed as either a negative time

away from work, or a positive experience of free time However, retirement as a time of leisure is only

possible with a certain degree of wealth With longer lives, people have spent more time

in education, work, and retirement

Changes in the American Economy

A new postindustrial economy shaped by information technology and global competition has reshaped American society

Large companies can no longer guarantee employment or a predictable work life based on patterns in the past For organizations, corporate downsizing often means a loss

of older employees’ experience and skills The volatility of the labor market today is more difficult for

older workers to cope with than for younger workers

Today 86% of eligible workers participate in some type of retirement contribution plan

A New View of Retirement

On the negative side, the practice of retirement comes with large hidden costs Funding required for pensions and retirement systems, and

loss of accumulated skills and talents

On the positive side, the availability of retirement has meant expanded leisure and opportunities for self-fulfillment in later life More time for personal development and volunteer service to

others

Age Discrimination Act (1967) – forbids older workers from being limited or treated in any way that would harm their employment possibilities

Productive Aging

People over age 65 are productive in many ways Three-quarters of older people are engaged in unpaid

work such as housework or volunteer roles The total value of their contribution to society equals

nearly 12 million full-time workers, and equals 7 million workers in caregiving alone

More older people are volunteering today than a generation ago

Plasticity – the potential for retraining The discovery method of training – trainees discover

for themselves how to carry out a task to be learned Very effective with older workers