What Sweden and Japan Can Teach the U.S. About Its Aging Workforce

The global population is getting older. What can countries do?

Vincent Kessler / Reuters

In just 15 years more than 20 percent of the U.S. population will be over the age of 65. That's more than double what it was in 1970, according to Census data. And as my colleague Bourree Lam wrote recently, an aging population means that the number of workers who are older than 65 is growing quickly: By 2022, nearly 25 percent of senior citizens will be fully employed. For some older workers it's a question of staying active, but for many others it's a matter of financial necessity.

Around the globe many countries are facing a similar question: how to cope with a population where older residents will soon outnumber those who are typically considered working age, and what to do about elderly citizens who may not have enough money to make ends meet for the duration of their lives.

One of the first places that many nations are looking for answers is the labor market, where the possibility of  lengthening years of employability can help on both fronts.

I spoke with Joseph M. Coleman, author of the book Unfinished Work: The Struggle to Build an Aging American Workforce, about how the U.S. stacks up against other countries when it comes to easing the shift to an older workforce.

The interview that follows has been lightly edited for clarity.

Gillian B. White: You spent a lot of time researching the labor force and changing demographics around the world, in your opinion how prepared is the U.S. for the shift to an older population?

Joseph M. Coleman: There are good things and bad things. We have a very dynamic economy, we're able to react to changing circumstances in a relatively rapid way. That's a great strength as far as responding to the the changing circumstances of the demographic composition of the labor force. The bad thing is that we're very short-term focused and I think that the recession only exacerbated that.

In Europe there was a lot of interest in accommodating older workers and that kind of abruptly stopped in 2007. The thing we don't really have in this country, that you see elsewhere, is a role governments can play in making it a priority to employ older workers. Certainly compared to Japan and in some parts of Europe, the United States government is not really that active. I think partially that's because we see ourselves as a very market-driven economy, so the hurdle is higher to get the government involved. It's going to be important for us to find employment for people as they get older because we're pushing retirement ages higher, but we're not doing anything to make it easier to keep those people employed until we start giving them Social Security.

White: What were some of the primary differences you found in the mindset of older Americans versus elderly citizens elsewhere when it comes to the idea of continuing to work in their later years versus retiring?

Coleman: I visited four countries and it seemed like the mindset was different in each place. I think there are a lot of Americans who want to continue working. You have a lot of people who are highly educated and identify very strongly with their work. When 65 rolls around they don't necessarily feel like that identification ends, they want to continue to do something. In places like France the feeling is a little different. I think what happens is that the idea of self fulfillment may be less associated with your workplace and your economic role.

Japan is interesting also, because the Baby Boomer generation in Japan was a generation that was very much wrapped up in work. You have a lot of people who just want to be busy, the idea of being idle does not sit very well in that culture. So you see a lot of people working for peanuts but they're just working because they want to continue doing something.

White: In your travels, was there any particular program or plan that you found the most compelling when it came to keeping older workers in the labor force, but also not risking their health or safety?

Coleman: One interesting thing that I noticed in Sweden was job councils. It's lubrication of the labor market. If your company runs into trouble and has to lay you off, you go to an employment agency that is geared toward your industry. I found that very interesting because it acknowledged that there are business cycles that may require companies to cut their labor force. This is just a fact of life. We have to provide something for them so that they can perhaps get retrained, get some job counseling, brush up on their job-search skills and retool themselves for the labor market—which may be very different from the last time they looked for a job 20 or 30 years ago—and the labor market is going to look at you in a very different way. You may very well need to update your skills to be ready to compete in the present circumstances. I think training is really important and it's something that we don't get enough of anywhere, but certainly for older workers I think it's a critical. Training can really extend your employability.

White: If training is one of the key components to creating a U.S. labor market that's friendlier toward older workers, what are other components that you think are particularly important?

Coleman: In Japan there was another program in which the government played the role of keeper of best practices. This agency basically found companies that were having some success in attracting or retaining older workers and then pooled those best practices, sending advisors out to other companies to help them in devising their own ways of attracting and retaining older workers. Flexible schedules is one big one, and access to training in terms of tuition benefits for someone who wants to go back and get a master's degree when they're in their 50s. Also the physical conditions of work: ergonomically designed workstations, better lighting. There all sorts of ways that you can make the work environment more physically comfortable for older workers and produce less wear and tear on their bodies.

White: You talked about the role of unions in finding a place for older workers, and keeping them in the labor force in other countries. Do you think that translates to the U.S., and that unions in America—in their current state—have enough power to accomplish some of the things they have abroad?

Coleman: No. That's why it's kind of treacherous to say, "We should do exactly that thing in our country." Circumstances are completely different. So one of the reasons why that works in Sweden is that it's a cooperative venture between the industry and the labor unions. You've got 70 percent unionization—they speak for almost three-fourths of the workforce. In this country it's not even close. Trying to build a job-council system based on working with the unions, while it might be a good idea in some industries, it might not be viable in all areas. These systems have to be adapted to conditions on the ground. You could find a version of that that would work in the American context, but you certainly couldn't import it wholesale.

White: One of the things I noticed is that some of the examples you came across focused specifically on employing seniors rather than generally creating a more integrated or diverse workforce in terms of age. Is that a problem or ultimately the solution, to carve out different areas where seniors can continue working?

Coleman: I think it's a good beginning, in the sense of we have this problem, how are we going to go about fixing it? My hope would be that by making workforces more welcoming and more comfortable for older workers, we end up making them attractive for everybody. I think it helps in terms of discrimination. There have been laws on the books in the United States since the 1960s outlawing ageism, but pretty much everyone I talked to said it still happens. The complaints went up pretty dramatically during the years of the recession and have stayed high. It's just one aspect of a broader diversity issue. One would hope that if you accept diversity in one respect, you would tend to accept and encourage it in other respects. I know that when we when we do talk about diversity, age diversity is not on the list—maybe it should be.

White: It seems that businesses, through corporate programs and policies, are leading the way when it comes to reforming the labor market in favor of older workers. Is that the most effective path and do you think that government programs will soon catch up, or at least increase the level of assistance that they give to this specific population?

Coleman: I don't see a huge push right now. There was this one program where junior colleges and community colleges developed programs geared toward older workers. By the time I got there their funding had already run out. It was a pilot program and there are schools that are still doing it, but it's not something that's been embraced as a priority by the government, though it could do quite a bit of good. I think that's a great idea, to create programs where older workers can go to the local community college. It's not terribly expensive and getting some kind of training will help them in employment.  I see more awareness on the corporate side.

White: What's at stake if the U.S. doesn't figure this out, or is not able or willing to find ways to to better incorporate the elderly into the workforce?

Coleman: There are a couple of things. Older workers are a great resource that we are not making use of, in the economy and in society. There are skills, a lot of experience, and a lot of energy in people in their late 50s and in their 60s that's not being capitalized on. People always ask me,"If all of these old people start working, are there going to be jobs for the young?" That's a question that economists would not ask. If older people are working then they're spending money, because they're earning money, and then that creates jobs. These people want to work they're motivated, they're educated, society can get some benefit from them.

For the individual workers themselves, corporate pension or the company pension that our parents had, are rapidly fading. Instead it's up to you to save your money and the research up until now shows that people don't save as well as they ought to, and then they don't manage their money as well as the old company pensions managers used to. You can very easily see a crisis coming where people are going to be in their late 60s and there's no way they can afford to retire. People really need to continue working and if the jobs aren't available then we're going to have an increasing elderly poverty problem in this country.