The ageing of Australia’s population has been particularly apparent since the 1960s and is attributed to falling mortality and fertility rates combined with the effect of a baby boom generation as it moves into the older age brackets. Over the past two decades the workforce (and especially the full-time workforce) has been ageing at a rate faster than the general population. Workers in education and health are amongst the oldest workers; fewer younger people and more older women in the workforce. Three important consequences are:
1. Labour supply – Labour force participation rates fall sharply after age 54 years and therefore it might be expected that an older workforce will have a lower average rate of participation. It follows therefore that unless older workers can be persuaded to stay on in the labour force, and assuming that labour force participation rates do not rise for the other age groups, labour shortages could occur resulting in increased pressure on wages.
2. Economic growth – By constraining labour supply growth, the ageing of the workforce could also slow down Australia’s economic growth performance.
3. Productivity – The Productivity Commission has noted that productivity levels initially increase and then decrease with age. At any point in time therefore, the effect of ageing on Australia’s average productivity level will depend on the particular age mix of the labour force. It will also depend on the extent to which improved health and higher education levels have lifted productivity levels for older workers. Most research supports the view that there will not be a decline in worker productivity with age.
A forum held in early 2011 by COTA Victoria identified that not only was the exit of older workers from the business causing costly labour supply challenges, it was virtually impossible to have a discussion with the workforce (and in particular older workers) about the issue for fear of non-compliance with relevant legislation.
Victoria is Australia’s lead manufacturer but the industry faces critical labour issues. Across Australia the health and ageing sectors cannot attract enough qualified nurses and carers to replace older, mostly women, workers who are retiring.
There are a range of factors: all need to be considered with representatives from all areas of society at the table.
As part of its sponsorship of the Shared Value Project, Ellis Jones will be launching a pilot to develop a model for business that has, at its foundation, the shared value approach. The forum will consider:
- how to nurture discussion within the workforce about transition into retirement
- what clarification is needed from government about application of relevant laws
- how can community, employee and industry organisations contribute on behalf of the people they represent