Breaking News: The Rocking Chairs Can Wait.

By Karen and Erica

Newsflash: business people and academics are beginning to see what Lustre sees—a future where society welcomes older people and is enriched by our wisdom, instead of isolating us and foregoing our vast resources.

For some time, we have heard the concern that, after we reach the golden age of about 65, older people will do nothing but become needy and greedy, spending the decades we have left sucking resources away from younger people, causing the world as we know it to come to a nasty end.

The only way this will happen is if we sideline older people, which will indeed make us sick and hopeless. But why would society want to do that? For the first time in history, experience derived from years of life can be joined with vigorous longevity. Those of us with access to financial well being and medical support (which should be all of us) are living much healthier, longer lives. We have extensive experience, a resource we want to use. So why put us out to pasture—and waste that resource—just because we reach some age that, a couple of hundred years ago, might have been too old for hard manual labor?

Let’s not do that. The rocking chairs can wait. Instead, let’s use our brains. Many of us want to keep engaging in purposeful activity. We are happy to trade in 24/7 work for a more flexible routine, and we have no desire to take jobs from younger people. What we do want are creative solutions that allow us to use what we know to help younger people get ahead. We just need to design those solutions. (We know we can do it—we did it recently, and quickly, in the face of a global pandemic.) If we use our brains to come up with new options for keeping people integrated in the world, the aging population will be a source of huge benefits.

That is exactly the point of a recent post, Embracing Demographic Transition, published on Citi GPS, an interesting site where Citibank publishes informed, often academic, papers about matters of especially economic interest. An up-front summary says it all:

[P]opulation aging has far-reaching consequences that governments, businesses, and wider society must reckon with. Economists have already sounded the alarm bells on some of these consequences: a ballooning older population will be dependent, they say, on a working-age population that is too small to support it.

We argue that, while the trend towards a population that is older than it ever has been is intractable, the trend towards an increasingly dependent one need not be.

In this report, we collate perspectives from across Citi and our global network to explore how our extra years of life expectancy can be lived as social contributors rather than dependents. From these expert contributions, we find that supporting the health and wealth of an aging population are the levers to pull if our aim is to minimize the dependence of an aging population. We see four dimensions: 

• Maximizing the economic contribution of older groups, including evolving labor markets in support of longer working lives.

• Supporting economic resilience in later life, through financial inclusion and incorporating longevity into financial planning.

• Preventing the onset of dependence by supporting healthy aging, including the shift to a more preventive healthcare system.

• Ensuring access to affordable healthcare for all, including boosting the supply of care work and joining up health and care systems.

Makes sense to us.

The post consists of several quite dense reports that merit a close read. But here are key points:

• Boosting the size of the workforce is a key component of responding to population aging, and it might involve supporting migration, inclusive workplaces, and longer working lives.

• [I]t is reductive to assume that age 65 marks a shift from economic and social contributor to dependent (as this metric does). Over 65s often have far more than a decade to live and much of that time can be spent as an economic and social contributor. To put it simply – what it means to be 65 in the 21st century is different to what this meant in the 19th century, when the average life expectancy was less than 40 years on every continent

• [W]hile the trend towards a population that is older than it ever has been is intractable, the trend towards an increasingly dependent one need not be. The salient question about the consequences of the demographic transition is therefore — how can we shift upwards the age at which we become economically or socially dependent on the younger population?

• Developments in technology are already shifting the nature of work in a way that might sustain longer working lives, including by facilitating remote and hybrid work. As Professor Carl Frey notes, “technological change [allowed] people to work longer by shifting the bulk of the workforce from farms to factories, to airconditioned offices”.

• Continued development and training are vital to lengthening working lives by ensuring that workers’ skills remain fit for use over the longer term – especially in the context of an increasing use of technology. Experienced workers are also key to developing technologies for the workplace. Governments and businesses can both lead on this.

• [T]echnology can help to eliminate bias in recruitment processes. Andy Haldane, Former Chief Economist at the Bank of England, has noted that “the most important reason for low employment of older workers is endemic ageism[.]

• Technology is not a total solution to ageism, though: only 63% of UN member states have national legislation and enforcement strategies against age-based discrimination,41 so there is room to go. Adding measurement and reporting of employee age profiles, hiring, and training can help. In Japan companies even have to offer new contracts to workers who reach retirement

• Supporting longer working lives requires more than the technology revolution that is underway: it requires flexibility like part-time and hybrid work schedules, opportunities for phased retirement and ending ageism – which the World Health Organization defines as “[using] age to categorize and divide people in ways that lead to harm, disadvantage and injustice and erode solidarity across generations”. Policy plays some role, but employers must also support evolving the labor market to facilitate longer working lives and in many cases, they can lead.

• One way to address this is for diversity and inclusion initiatives to include older workers and to balance the competing demands of a multi-generational workforce. Research suggests that older people experience ageism both at work and elsewhere, which curtails their income and makes them more likely to retire early. 1 in 3 report having experienced some sort of ageism in Europe. Yet, data from a survey of UK-based companies shows that age lags other aspects of diversity in terms of the actions being taken by leaders. Moreover, age related Employee Resource Groups (ERGs) lag ERGs on other aspects of diversity, like gender and race.

• [T]he health of tomorrow’s aging population is not immutable. Just as it is in our gift to increase economic resilience, for example by lengthening working lives, so we have an opportunity to improve how healthy our older population can be. The idea that age 65 marks a threshold at which one requires more healthcare spending can be both questioned in theory and altered in practice.

• The first salient question is, then, what is needed to support healthy aging? We again collate insights from experts across Citi and our global network, from which we observe two key levers to support healthy aging:

• A preventive approach to healthcare, like encouraging healthier lifestyles from a young age, could help to maximize the years lived in good health. This requires the collaboration of healthcare systems, pharmaceutical companies, civil society, and governments.

• Innovation for diseases associated with older age must continue. As the UK’s Chief Medical Officer, Chris Whitty, noted in his 2022 lecture for Gresham College, “there are […] diseases of old age which we do not have a good treatment for yet, such as the major dementias. While healthy aging can minimize the number of people affected by these conditions, innovation is a second lever to minimize the potential negative impacts of population aging. Aligning market incentives with the economic impact of these innovations will be key.

The people who wrote these papers have credentials that we at Lustre do not. Their conclusions give force to Lustre’s message. We hope policy makers and employers listen.

Lustre is glad to lead the way.