EUROPEAN PAPERS ON THE NEW WELFARE

A Comment on Flexible Work Option for All in the USA

In the US, effective January 2007, the Pension Protection Act of 2006 allows traditional pension plans to pay retirement benefits to workers at least aged 62 while still working. Some believe this may encourage older employees to work longer to ease the labor shortage caused by retiring baby boomers. However, many of those continuing to work would be part-timers. So, filling the gap of an impending labor shortage requires drawing workers from people of any age. A human resource strategy of flexible work options for all ages could help generate more workers.
Recognizing the need for an inclusive strategy does not detract from the policy of encouraging older people to work part-time while receiving a partial pension. Phased retirement remains a winning strategy. For these workers, such a system would help them not only prolong their work life and generate supplementary incomes, but also allow them time for caregiving, social engagement, or other personal activities, including rehabilitation of a disability.
For employers, it would help moderate labor shortages, while accommodating those who may wish to or can only work fewer hours than before. Employers could also benefit from hiring workers who are more likely to give their best hours of performance in a reduced work regimen. Allowing employers to dispense partial pensions would also help ease cash flow for pension plans.
Thus, society as a whole could benefit from more production, as employers tap into a larger labour pool, enhance workforce morale, and quite possibly improve productivity. At the same time, employees could exercise more choice about the timing and intensity of work and retirement. Besides, as people live longer and healthier lives, they will most likely want or need to work longer.
That explains why ‘live longer, work longer’ is being urged in many countries. As intuitively appealing as it sounds, however, this idea downplays the fact that some older people just cannot or will not work longer. Moreover, most older people who continue to work would be working part-time. Therefore, to help make up the worker shortage, we need an inclusive strategy to increase labor supply by drawing from other groups such as younger people, persons with disabilities, and women, at the same time that we encourage older people to continue working.
During the past 25 years, labor force participation rates in the United States have declined dramatically among people ages 55 and younger, especially those under age 25, as well as among working-age people with disabilities. As for women, their labour force participation rates have begun to drop somewhat in the last 10 to 15 years after rapid growth during the preceding several decades. Among the many factors that may explain these declines, one of the more influential ones is the lack of flexible work arrangements.
A strategy of flexible work options for everyone is needed to satisfy the desire of many individuals to combine work, family responsibilities and other pursuits. Such a strategy is also necessary to accommodate those whose ability to work is compromised by their health conditions.
There are already harbingers of such practices in many settings. For example, some high schools have instituted work-study programs to enable students to earn income toward school tuition. Some women professionals have created job-sharing arrangements so they could raise children as well as work. The federal government has recently announced a major initiative to find jobs for people with a severe disability. Some agencies in the federal government have also already started creating flexible work arrangements to retain older workers who would be retiring in the coming years otherwise. And AARP has a program for several years now of identifying and recognizing best employers for workers over age 50 in the private sector.
The strategy of flexible work options poses challenges to human resource management, and this cannot be minimised. To carry out such a strategy would require efforts in both the public and private sectors. Hence, industry, labor, government, community organizers, and the research community need to work together to help the workplace maximize the benefits while minimizing the costs of a new way of tapping society’s potential labor regardless of age and sex.
This strategy, being applicable to all people, would not be age-based. Such a strategy would have greater humanitarian and political appeal. Further, such a strategy would have another benefit: When combined with more day care options, family leave and other accommodations directed toward new parents, a flexible- work-options strategy could potentially reverse the declines in birthrate that have contributed significantly to ageing populations and ageing workforces in many countries.


Yung-Ping Chen: PhD, holds the Frank J. Manning Eminent Scholar’s Chair in Gerontology, University of Massachusetts, Boston, MA 02125, U.S.A. The author thanks Professor Jonathan (Jon) B. Forman for useful discussions.



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