Many Older Workers Want To Retire, But Can't
NEAL CONAN, host: This is TALK OF THE NATION. I'm Neal Conan in Washington. With graduation season upon us, a new class of young adults will be looking for work, competing not only with each other but with much of the class of 2010 and 2009. And while legions of millennials try to land that first job, a lot of baby boomers plan to stay in theirs.
The recession left plenty of them with little choice, and many of those who do have a financial cushion see no particular reason to sail off into the sunset right now. Some argue the longer older workers hold on, the fewer opportunities there are likely to be for the younger generation.
Later in the program, the founder of Minnesota Public Radio and the future of public media and your local public radio station. But first, older workers. When is it time to go? Give us a call, 800-989-8255. Email us, email@example.com. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
We begin with Ronald Brownstein, columnist and editorial director at the National Journal, the author of a piece titled "Why Millennials Can't Start Their Careers, and Baby Boomers Can't End Theirs." And he joins us from a studio at his office in Washington. Nice to have you on TALK OF THE NATION today.
RONALD BROWNSTEIN: Thanks, Neal.
CONAN: And you write in your piece: For every member of the millennial generation frustrated she can't start her career, there may be a baby boomer frustrated that he can't end one. Why is this such a challenge these days?
BROWNSTEIN: Well, we're seeing historically high levels of unemployment among young people, and the level of the - the share of young people who are actually engaged in the labor force, now, is at the lowest it has been in the past 60 years. People are having enormous difficulty moving out of - whether it's college or high school - and finding that first job.
On the other hand, in this recession, the only group of workers whose level of participation in the labor market has held steady are those over 55. You are seeing, while it's going down for everyone else, they are holding steady and in fact, holding steady at a level that's as high as its been in 40 years, since about 1970.
So on the one hand, young people are finding it very difficult to get that first job, and older workers are, after the financial meltdown of 2008 and the vaporizing of their 401(k)s and their housing values, are find it very difficult to afford retirement.
We have people who are staying in the labor market longer than they probably intended and people who are finding it difficult to enter it as soon as they intended.
CONAN: And this a one-for-one proposition? If an older worker leaves, that means there's some room for a younger worker?
BROWNSTEIN: Well, I mean, I think most economists think it doesn't work precisely that way in the sense that there are very few jobs that someone 58 and 23 would be both competing for, but it is, I think, two different reflections of kind of a common challenge about the way our workforce is now structured and operating.
I mean, there is kind of a clogged feeling. I mean, you kind of - you look all the way up the ladder. The ability of people to move up is somewhat affected by this. But it's really - I mean, there isn't, like, a lot of cases where there is direct competition. We just have - these are the kind of manifestations of the disorder and the dysfunction that is created when you have a very slowly growing job market, and also you have an erosion in retirement security.
CONAN: That group, 55 and over, that also represents the biggest demographic bulge in American history.
BROWNSTEIN: Yes. Yeah, and look, there's a political dimension to all of this, as well, as I have written about on other occasions. We call it the brown and the gray. When you think about it, the baby boom is the biggest demographic bulge that we've had. It is a preponderantly white generation. Eighty percent of baby - roughly 80 percent of American seniors are white. We had very little immigration into the country from 1924 to 1965.
This under 18, this under 30 generation is increasingly nonwhite. The census says 47 percent of Americans under 18 are non-white. So the class of 2012 and 2013 and 2014 will be increasingly minority. Those are the young people who are having trouble getting started.
And the political dimension is that these older, white baby boomers who are moving toward retirement have been growing more conservative, voting more Republican, expressing views more skeptical about the role of government and increasingly dubious about some of the public investment in things like health care and education that many of these younger people and their families believe is necessary for them to ascend into the middle class.
So we have kind of a - not only an economic divergence but something of a political clash that is kind of baked into our politics for the next several decades. I've called the phenomenon the brown and the gray, and I think resolving that tension is going to be a big part of coming to any kind of political consensus in this country in the coming decades.
CONAN: So don't trust anybody over 55.
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BROWNSTEIN: Well, I don't know. They are just moving in very different directions, both politically and economically. I mean, you see this in - in, you know, in 2008, for example, I mean, Barack Obama won two-thirds of Americans under 30, and roughly 60 percent of white seniors voted Republican, a big divergence here.
And kind of a larger issue - I mean, you know, you could make an argument for this new labor market pattern if you were doing it on purpose because generally speaking, as life spans extend, as longevity improves, you do want people working somewhat later, and you could make an argument for spending more time in their early - spending more time equipping people and infusing people with skills in their early 20s. But that's not really what's happening.
I mean, we have - the share of young people who are not in school or at work is going up, what they call the idleness rate. About 24 - you know, it's steadily increasing over the last several years. You also have this kind of divergence in the ability to obtain college education, where we've now reached the point where if you were parents were graduated from college, you are now five times more likely to graduate yourself than someone whose parents were not graduated.
And so you see the society kind of separating into separate branches, divided along that line of opportunity.
CONAN: We want to hear from older workers in our audience. When it is time to go? 800-989-8255. Email firstname.lastname@example.org. Keith's(ph) on the line calling from Santa Rosa.
KEITH: Good afternoon, Neil, thank you so much for taking my call. I certainly wasn't ready to go.
CONAN: And how old are you?
KEITH: I'm 58 now. I left the company fortunately when I was 55.
CONAN: Fortunately? You said you weren't ready to go.
KEITH: Well, it was just under 25 years, Neal, and I worked for a major corporation, and it seemed to me that they had a policy of putting - it's sort of like you've made your bones, and you've done fine, and part of the deal is if you're not promoted past a certain place by 55, you should kind of fade into the sunset, and that's just kind of part of the deal, with a pension and all. I mean, I'm very fortunate, Neal. I want you to know that.
KEITH: But in my case, I had a disabled child with severe learning disabilities, and so how they foment this is they put people into, like, night shifts where it's difficult to maintain contact with their family. And that's hard enough for two parents. And I certainly believe this was a policy.
And what I think the economic benefit was, the different in my salary as to the person that replaced me was about - was over 50 percent. And they shifted the pension cost into another bucket so it didn't show on the local nubmers.
CONAN: So they saved a lot of money when you decided to leave the company because...
KEITH: When I chose to try to help my son rather than to fight it out.
CONAN: I can understand. All right, well, are you working now?
KEITH: We're in a hold position, but we're able to hold on to our property, and we're really doing fine, Neal. And thank you so much for asking. We really appreciate your show and all the work you do.
CONAN: Thank you very much, Keith, and good luck to you and to your son.
KEITH: Thank you.
CONAN: And that's - Ronald Brownstein, yeah, I mean, older workers make a lot more money than younger workers. You'd think the companies would be trying to find ways to make this happen.
BROWNSTEIN: Well, you know, on the other hand, there are, like, skills and experiences that have been accumulated, as well. I think the issue, at least from my perspective, is less about the inclination of the company. What we're seeing now is driven less by the desires of the company than the realities of the economic situation facing older workers.
I mean, I think the reason why that level of older worker participation in the labor market is holding up at this high level is not so much that companies are saying boy, we really want to retain these people, it's that a lot of Americans who anticipated having the resources having the resources to retire simply don't have as many resources as they expected and are finding that they have to work longer than they probably intended or wanted.
I know the AARP surveys regularly on these questions, and when I spoke to their director of policy, their belief is that the - most of the people who are extending their work lives are doing it because they have to not because they want to or that they are doing something that is so fulfilling, which is definitely real.
I mean, as we've moved toward more of a service economy, and more people are working with their, you know, their heads than their hands, the opportunity to extend your career is greater, and I think there are many people who are going to enjoy doing that in the coming decades. But clearly part of what's going on now is people have to do it and didn't really want to or expect to.
CONAN: Ronald Brownstein's article in the National Journal, "Why Millennials Can't Start their Careers, and Baby Boomers Can't End Theirs," prompted a discussion on the New York Times website. It was a discussion about do older workers need a nudge.
Among those participating in that conversation, Todd Buchholz, a former White House economic advisor to the first President Bush, author of a new book called "Rush: Why You Need and Love the Rat Race." He recently discussed this issue. You can find a link to that conversation on our website. Todd Buchholz joins us now by phone from Cambridge in England. Nice to have you on TALK OF THE NATION today.
TODD BUCHHOLZ: Good to be with you, thank you.
CONAN: And I think it's fair to say - to count you among the skeptics about whether older workers need a nudge.
BUCHHOLZ: Well, you know, I don't believe that we've got a zero-sum society. I don't believe that there's a fixed number of jobs. I don't believe that we should think of our society as some mythical Eskimo village, where you take the old people, stick them on ice floes when you run out of blubber.
The fact is our economy, over the course of the last century, has absorbed millions and millions of workers. We absorbed the baby boom generation. Here's a classic time when many economists got it wrong. After World War II, because World War II was preceded by the Great Depression and unbelievably high unemployment, so many economists said once the war is over, we're going to go back to the Depression because how in the world could the economy possibly absorb all those young soldiers.
And instead, it did absorb those soldiers. We had tremendous, booming economic growth in the '50s and '60s. So my view is yes, now we have a terrible recession. It is the great recession. It's not quite over yet. The unemployment rate is terribly high, and it's a burden on everybody. But I don't think that we should make massive changes in our job situation or in the way we look at older workers because we're in the midst of a recession.
This recession will end, and we may then be faced with a labor shortage. Casting old people aside is not a very intelligent thing to do at this moment.
CONAN: I'm not sure that's what Ronald Brownstein was arguing about, but Ronald Brownstein, I'll let you speak for yourself.
BROWNSTEIN: Oh, no, no, like I said, I don't think of this as kind of a zero-sum game, either. And what I think is happening is we are seeing two different manifestations of the dysfunctions that we're now experiencing in our labor market after a full decade without meaningful job growth.
I mean, we went through, you know, a decade where the median income was lower than when it started, where job growth was minimal and of course where there was the financial meltdown in 2008 that undermined people's retirement plans.
So basically, on the one hand, young people are having trouble getting into the market. Older people are having trouble getting out. They are both, I think, just manifestations of the larger problem that our economy is not producing broadly shared prosperity in the way that it did in the 1990s or even through much of the 1980s and that neither side really has a great answer at this point how to produce more of that broadly shared prosperity.
CONAN: So older workers, when is it time to go? 800-989-8255. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.
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CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan in Washington. In this economy, it's tough for anybody to find a job. Many recent graduates complain they face an added obstacle: older workers who can't afford to retire or have no interest in quitting. As the New York Times put the question in their Room for Debate: Do older workers need a nudge?
Well, older workers, when is it time to go? Give us a call, 800-989-8255. Email email@example.com. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Our guest is Todd Buchholz. He wrote the recent op-ed for the New York Times "It's Not a Zero-Sum Game." There's a link to that at npr.org. Click on TALK OF THE NATION. He also served as White House economic adviser to president George H.W. Bush. Still with us also, Ronald Brownstein, columnist and editorial director for the National Journal.
And let's see if we can get another caller in. Let's go next to Brad(ph), Brad with us from Cleveland.
BRAD: Yes, hi. (Unintelligible) your show.
CONAN: Hi, Brad. Thank you.
BRAD: I'm 62 years old, and I don't need a nudge or a swift kick. I would love to back out. In fact, that's been the plan all along. I own a small business, and, you know, the last couple years were so horrific, I've not only got a first mortgage, but I've got a second mortgage on my home, and I see no light at the end of the tunnel.
The added problem that I have is that there's no ready cash out there. Banks are very reluctant to loan. And I've been in business 22 years. And my business is not rocket science. I have a semi dealership. And it's - I really don't see any relief.
And additionally, my son, who just came back from Iraq, you know, a mention was just made a little bit ago about soldiers coming back, well, he served two tours in Iraq, and he re-upped. He couldn't find work.
CONAN: He re-upped.
BRAD: Yeah, he's going to Afghanistan in March.
CONAN: Well, we wish him the best of luck. And was the idea that you would turn the business over to him?
BRAD: Well, no. Actually, I was looking at the business as an annuity for myself and my partner. And that's still the plan, but, you know, as I said, I'm 62, and gosh, I'd like to back off before I'm Methuselah's age, but I don't see it.
CONAN: Ronald Brownstein, Brad...
BROWNSTEIN: Wow, there it is.
CONAN: You describe almost perfectly in your article the person who would like to leave but just can't.
BROWNSTEIN: Yeah, I wish I had found this family when I was writing it and the younger person who would like to enter and also can't. Look, I mean, I think these are both problems. But I think if I had to put my finger on one or invest in one, I would say the problem of the young people is even greater because - and our other guest probably can comment on this.
The economic research is pretty consistent that if you graduate into a recession and have a difficulty getting your footing in the labor market, have difficulty getting on that escalator, it will - the effects of that can last your whole life. The lost earnings can compound through your life.
We did a special - we do a quarterly supplement with our colleagues at The Atlantic, our sister publication, on the economy. And last year, we did a big look at the millennial generation. And some of these stories, Neal, of the 25- and 26- and 27-year-olds who are kind of living in this fog of part-time work and freelance gigs and full-time jobs that evaporate after three months and are 26, 27 years old and really have nothing on their resume but a lot of very short-term kind of engagements, you really feel their struggle to be able to put down firm roots in the economy.
And then every 12 months, you know, there's another class. There's the class of 2010. There's the class of 2011. And I have this image of all of them congregating at the beginning of the escalator, trying to get on and all jostling with each other, and meanwhile, the whole thing is kind of stuck all the way up because the people at the top can't get off.
BRAD: Yeah, tell me about.
BROWNSTEIN: There you go.
CONAN: Brad, thanks very much for the phone call, and good luck to you.
BRAD: Thank you.
CONAN: And Ronald Brownstein, we know you have to leave us, you've got another appointment, but we appreciate you taking the time to be with us today.
BROWNSTEIN: Well, thanks for having me.
CONAN: Ronald Brownstein, columnist and editorial director for the National Journal. He joined us from their studio there at their offices in Washington, D.C. And Todd Buchholtz, are you concerned about that lost generation of millennials?
BUCHHOLZ: Well, I am concerned. Now, just to take the caller's point for a moment, he wants to retire at 62. You know, that's pretty young these days to retire. I mean, with life expectancy way beyond, it's not unreasonable to think that, you know, citizens will have to work longer than that.
But look, if we somehow nudged him aside, are we really serious in thinking that a 25-year-old is going to be able to take over for the founder, a 62-year-old, who's 62 years old, of a company that's been around for a while? So the idea that one replaces the other, that there's one cog in the wheel and somehow a cog 30 years younger or 40 years younger can take the role, that doesn't work.
But younger people, yes, I am concerned. I mean, in my book "Rush," I say: Imagine you're a young person. You're 20-something years old. You're going for a job interview, and you give good answers, you've shined your shoes, you've done some research, and on the way out, you realize you've been wearing a sign around your neck, and that sign says: I'm very expensive, and I don't know very much.
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BUCHHOLZ: The fact is we've got some terrible social government pathologies, such as an education program, an education system that is not world competitive anymore. We've got an immigration system that doesn't make sense. I don't mean illegal immigration, but our legal immigration system doesn't make sense.
We've got a legal system where you hire an American, and you figure his brother-in-law is probably a lawyer. I'll never be able to get rid of this guy if he doesn't work out because he'll sue me. And before you know it, American companies are saying why not hire the Indian, why not outsource, and therefore, you know, I won't be subject to this.
So we have really put obstacles and shackles on young people. And yes, I am concerned. But I don't think by pushing aside the older people you solve the problem of the ill-educated or under-educated young person in America today.
And, you know, I just point out the unemployment rate between college graduates and non-college graduates is just staggering, and that goes on for, as Ron was pointing out, it's not just at age 25 there's a difference, at age 35 and 45, it compounds.
So these really are terrible problems, but again, they're not going to be addressed by getting grandpa to quit his job at age 62.
CONAN: Alexander(ph) in Richmond, Virginia, disagrees. He writes: I have a message to old people: Get out of the way. I have two college degrees with reputable schools. No company will give me a full-time job. All they offer is paid stipends and internships. With young people facing an aging society, we need to have our time, too.
And this from Judith(ph) in Sag Harbor in New York: I'm 70, have no plan to retire anytime soon. I don't want to lose my generous benefits, my salary or my very satisfying and interesting job in publishing. On the other hand, I feel very...
BUCHHOLZ: I'm sorry, and that's really a very interesting one because in "Rush," I point out that when people retire early, they literally lose IQ points. They become less engaged, and their levels of satisfaction in life decline.
So, you know, if we imagine a world where people are retiring sooner than they otherwise would, you get older people who are less satisfied in life, and also it's a bigger burden on Medicare and Social Security, and who's going to pay for that? The young people through higher taxes, and that will discourage job creation.
So if our previous caller who's 62 retires early, he then immediately draws Social Security and a couple years later Medicare, and that ends up creating a bigger burden for young people, and then we end up with fewer jobs.
CONAN: Well, another argument that was - one of the participants in the conversation in the New York Times. Jeffrey Sonnenfeld, a professor at the Yale School of Management, argued that the example of executives like Ed Land of Polaroid, Juan Trippe of Pan Am holding on for so long they hobbled their own creation. Sometimes it is time to go.
BUCHHOLZ: Well, I certainly agree with that. I certainly agree that there does come a time, and there are executives who lose that passion. They want to, you know, rest on their laurels and rest on their, what, Herman Aeron fancy chairs, and their companies end up in bankruptcy court.
And so certainly there is a time. There's a time when - I mean, in the New York Times piece, I say you don't want Shaky Johnson the surgeon for your friend's prostate surgery. Or I don't want an airline pilot, you know, who's shaky. So, you know, we need to make sure that, you know, there's an appropriate time.
But my point is the idea that, you know, creating more room at the bottom by pushing people out earlier at the top, those people at the top, and I'm not talking about necessarily the guy in the corner office but, you know, more senior, seasoned people, have experience, and they have skills, and if the companies wanted to get rid of them, they could give them early retirement to push them out.
CONAN: Let's go next to Paul(ph) - excuse me, Raul(ph) in Gainesville, Florida. I'm sorry for mispronouncing your name.
RAUL: Yes, sir. Good afternoon, and thank you for the program.
CONAN: Thank you.
RAUL: I am 82 years old. I retired when I was 68 for the first time. And after a while, I got tired of being retired, and I went back to work. I was able to get a job here in Gainesville, where I live, and I work now as a tailor. I've always been a tailor.
Now, there are no young people in this trade, first of all, because it takes a long time to learn the trade, and secondly, because the trade does not pay good enough. I'm working and working and working, and the more I do, the more I work. The pay is always the same. So what I'm trying to say is this: although I retire and I came back to work because I like what I do, I'm pushing to - I'm being pushed to the point that I don't want to work anymore because they want so much from me.
RAUL: And that happens to everybody who learns the trade. Now, do we want to come back to work? Sometimes, yes, sometimes, no. I have mixed feelings. Like I said, I like what I do, but they're killing my desires to work.
CONAN: Raul, we wish you the best of luck. How long do you plan to keep working at this point?
RAUL: Listen, like the gentleman said, until I drop probably.
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RAUL: In plain English. In plain English. No, I've (unintelligible) , you know, and then I just like what I do. But like I said, the whole point is (unintelligible) me.
CONAN: All right.
RAUL: So long - how much longer before I retire, I have no idea. The day I retire, the way I'm being treated probably. That will be one of the factors, otherwise I don't know.
CONAN: All right.
RAUL: But anyway, I thank you very much, sir.
CONAN: Thanks very much for the call.
RAUL: Okay. Thank you then. Bye-bye.
CONAN: And we have this email from John(ph) in Cleveland. The problem is that when retirees or older workers quit or retire, their jobs get eliminated through a process the corporations call attrition. They're just not refilling the jobs left behind when someone leaves.
And, Todd Buchholz, that's certainly true at least in some corporations.
BUCHHOLZ: Well, it is certainly true. There are companies that have fewer employees than they did. And look, I visited a Boeing factory in the state of Washington a few years ago. And there were so few people on the shop floor, I thought it was a Sunday or a holiday. I had to check my calendar. And it turns out they put together those airplanes with far fewer people than you imagine. Now, of course, different pieces of the plane are built in various places and they all bring them together to Washington for the final assembly.
But, you know, the steel industry today produces far more tons of steel than it did 30 years ago but produces it with far fewer workers. So this is a matter of efficiency and productivity and you can call it attrition. But, you know, it raises our standard of living, but it certainly means there aren't nearly as many workers in the steel industry as there were in the 1960s or '70s.
CONAN: We're talking about older workers. And you're listening to TALK OF THE NATION which is coming to from NPR News. You also wrote in the "Room for Debate" discussion that there are a lot of impediments to companies to try to get rid of their older workers. You mentioned offering them early retirement. You had another idea which I thought was interesting, the - you called it the single purpose consultancy act.
BUCHHOLZ: Yes, yes, the single purpose consultancy. Here's the situation that companies face, and this is an outgrowth of our litigious society. Lawyers give the following advice to companies and many of you in the audience will have experienced this, you know, for co-workers, friends, neighbors, maybe yourselves. These days when someone is let go, they're often escorted to the door, you know, their computers are immediately unplugged. They're denied all access immediately. There's an absolute clean break because companies don't - first of all, they don't want to be subject to someone going back and sending nasty emails about the company and their trade secrets and the like.
But also the advice of the lawyers is to make it an absolute clean break when you let somebody go and make sure you are defending against sex discrimination claims, age discrimination claims and so on. As a result of that clean break mentality, the ability of companies to offer a consultancy arrangement for an older employee who, maybe it's time for them to cut back on their work some, the company does not feel secure in going to that older person and having a negotiation for fear it will lead to age discrimination lawsuits.
So instead, they basically fire the person or come up with some reason not related to age. They may close the entire office, maybe a small office, two, three employees, and they decide, you know, let's just make a clean break, close the office for all of them, and then we can resurrect it a couple of months later with a new set of workers.
And so what I proposed is something in The Time's piece I called a single purpose consultancy act, which would basically allow a worker and the company within a streamline, five minutes, one sheet of paper, figure out a consultancy arrangement that won't get anybody in trouble with the ERISA laws which have to do with pensions or age discrimination or even, you know, the Obamacare health care reform that passed in 2010. And that would allow older people who want to cut back their hours and companies who want to cut back on their obligation to the older worker to immediately come up with a program that would, yes, allow room for another young worker to come in but also retain some aspect of the older person's talents.
Right now, it is an absolute morass. And if you ask any lawyer friend of yours to explain how ERISA works, the Employee Retirement Income Security Act, I assure you they will not give you an answer because no lawyer outside of a highly trained pension lawyer has a clue how that morass, Rube Goldberg system works.
CONAN: Here's an email from Jeffrey(ph) in Fairbanks. I was fortunate enough to find a job in what I studied in college. It would not have happened had someone not retired. A lot of my friends are in internships without the benefits of health care and retirement plans. They are - these are bright people companies should risk in training. The problem is there are more incentives for people to invest in labor-saving capital instead of people. This will lead to an institutional brain drain that will hurt the economy in the long run. College does not prepare you to excel in the workplace, seasoned mentors do.
And let's see if we get one more caller in. Let's go to John(ph) and John is with us from Sacramento.
JOHN: Hi. I'm calling as a 53-year-old had a career for the last 30 years as a chef, and 30-plus years have absolutely no retirement benefits. Never thought of retiring. Still don't think it's a good idea necessarily. I'll just cook - work till I drop dead - if I have the luxury, at least. And I'm currently looking at teaching in high schools in culinary arts and vocational ed. So at the same time, I'm assisting young students that may or may not or probably not go to college in finding employment in the - in today's job market. And I think that's - you know, in some ways, it's looking as though that may be the best way to do what I do, what I enjoy doing and utilize skills and experience and things that I have and sort of passing that on.
CONAN: And it's another way to act as a mentor. John, thanks very much for the phone call. We'd also like to thank Todd Buchholz, who wrote the recent piece for The New York Times, "It's Not a Zero-Sum Game." His new book is "Rush: Why You Need and Love the Rat Race." Thanks very much for being with us today.
BUCHHOLZ: Good to be with you. Thank you.
CONAN: Up next, Bill Kling helped create almost every major player in public radio, including NPR. He'll talk about the future of public media in just a moment. Stay with us. This is NPR News.
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