Too old to work, too young to die
Pension changes, age discrimination and workplace automation are driving older Australians into poverty

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The first of October is the International Day of Older Persons. The United Nations want us to put the spotlight on age discrimination, and so we should. A perfect storm is brewing against older workers: unless we think carefully about it, we’re going to end up with a huge cohort of older Australians spending 15 or 20 years on the dole, living in poverty, while they wait to qualify for the Age Pension.

Age discrimination is already rife in Australia, with over a quarter of older job seekers reporting being affected by it. When you combine this with the push to lift the Age Pension access age to 70, the rise of contract and casual employment, and the current and projected impact of technology on the demand for skills, the situation for many older workers looks grim. If you’re an older woman, trying to return to the workforce after raising children, then things are going to be particularly hard for you.

Many studies have been published over the last few years predicting that vast numbers of jobs (or tasks) are likely to be automated in the coming decades. There are differences between the predictions, but there are areas where they all agree. A recent report by the Committee for Economic Development of Australia estimated that 40% of Australian jobs are highly like to be replaced by artificial intelligence (AI) and robots in the next ten to 15 years. That’s a staggering change in such a short space of time. In a few decades, almost nobody will be driving vehicles for a living, and that transition is expected to begin in the next few years in wealthy western countries. (Uber and Lyft are already trialling self-driving cars with customers in the US – albeit with human engineers still, for the moment, sitting in the driver’s seat).

Some are predicting the demand for human labour will decrease – in other words there will actually be less jobs – while others suggest that this technological change will be like every other since the industrial revolution, where some jobs are destroyed while others are created. It doesn’t matter which is correct for many older workers: if their existing job is destroyed, their chance of retraining and restarting in a new career is slim.

This isn’t a dystopian vision of a distant future. It’s already happening.

It was through working with women over 50 in Melbourne who are at risk of poverty that we first put all these pieces together. Many of these women are already trapped in unemployment or underemployment, due to gender and age discrimination and out-of-date skills and qualifications.

Starting next July, the age at which you can access the Age Pension will rise from 65 to 65 and six months, and it will increase by six months every two years until it reaches 67. The government wants to increase the pension age to 70 by 2035, but this has not yet been legislated. They see this as the solution to the “problem” of an ageing population.

The “burden” of all these old people on the health and social security budgets is said to be one of our greatest challenges. Putting aside for a moment the fact that all of this “problem” and “burden” talk is nonsense and only adds fuel to age discrimination, the simplistic solution of adjusting the pension age ignores all of the above factors that make it difficult for older Australians to stay in the workforce.

Before introducing measures that force people to work longer, we need to address the problems that make it very difficult for many who already want to do so.

The increasingly contractual and casual nature of employment means that workers in their 50s and 60s are increasingly likely to find themselves out of work. Once they become unemployed they are far more likely to stay that way for a long time. Adding to this, employers are more reluctant to spend money training older workers.

This perfect storm of longer working lives, discrimination, technological change and less secure work will leave many without the skills that employers are looking for and with limited prospects of obtaining them. Even if they do manage to retrain, who’s more likely to get hired: a newly trained 58 year old or a newly trained 24 year old? If that 58-year-old job seeker can’t find a job, they may face 12 years on the dole before qualifying for the Age Pension. And the longer they’re on the dole, the harder it will become to get a job.

A huge technological transformation of work is coming and we need to think very hard about how we’re going to deal with it as a society, both generally and specifically with respect to older workers who lose their jobs. Unless we first break down the barriers to employment for all the unemployed older workers who are already out there, further increases in the pension qualifying age will only drive more older Australians into poverty on the dole.

Warwick Smith

Warwick Smith is a research economist at progressive think tank Per Capita.

@RecoEco

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