A few decades ago, the baby boomer generation made it necessary to retire older workers from the workforce to give younger job seekers a chance. In the 1980s, the then Federal Minister of Labour in Germany, Norbert Blüm, asked, “Why should older workers work longer when younger people are unemployed?”
At that time, paid jobs were scarce in Western industrialized countries, and the introduction of partial retirement followed as a response to this challenge. Franz Steinkühler, the former deputy chairman of the German trade union IG Metall, rightly predicted that older workers would be chased by companies like “hares” to terminate their contracts and make way for the emerging baby boomers in the job market.
However, times have changed. In the present day, the Western world faces not mass unemployment, but rather a shortage of skilled workers due to the aging baby boomer generation seeking retirement.
It is expected that due to the skills shortage, older employees will once again be hunted like “hares,” but this time to ask for extensions of their contracts.
The German „retirement wave“: Learning from Japan?
Japan also faces significant issues related to an aging population. With an average life expectancy of around 85 years, Japan has a high life expectancy. However, the fertility rate is low, with 1.31 children per woman, leading to an aging population and relatively low pensions.
In Japan, many retirees between the ages of 65 and 69 continue to work one or more jobs because their pensions are often not sufficient to live on. This trend could serve as a blueprint for the demographic developments expected in other Western countries.
Working beyond retirement age in Japan is viewed as a social obligation and an opportunity to be socially useful. The lower pensions in Japan provide an additional financial incentive for longer work. In contrast, the attitude towards retirement in Germany still differs significantly, as retirement is often seen as a time for oneself.
The changing world of work
Companies as fitness centers and educational institutions The promotion of health and lifelong learning will become increasingly important in companies to keep the aging workforce intellectually and practically qualified through appropriate training offers.
Well-being and identity in old age
Measures to support well-being are gaining importance to keep the aging workforce fit and productive. To cope with the skills shortage, companies in Germany will have to recruit more baby boomers as employees. Therefore, it becomes crucial to retain and support the existing workforce for as long as possible.
The end of youth obsession
The prediction made by the British economist Paul Wallace in his book “Alterleben” in 1999 is coming true. The obsession with youth is coming to an end, and society is increasingly dealing with the organization of life in an aging population.
The human attitude towards work In Japan, many people take pride in working beyond retirement age, seeing it as a social responsibility and a way to be useful to society. The lower pensions in Japan also provide a financial incentive for working longer.
The Japanese concept of “Ikigai” as a fulfilled life
Ikigai helps people find their life goals, utilize their abilities, and experience deeper fulfillment. It involves the harmony of four elements: passion (what you love), vocation (what you are paid for), profession (what you are good at), and mission (what the world needs). An fulfilling life is achieved when all these elements overlap and connect harmoniously.
For those who find meaning and identity in their work and can continue working in their older age, Japan could serve as an example. However, not all professions are suitable for working until an advanced age, and some people may desire to dedicate their later years to other pursuits.
The fair distribution of retirement financing is one of the most significant challenges in the Western world. Companies are now engaged in a kind of new “hare hunt,” but this time with reversed intentions. Successfully, there are more seniors who want to remain professionally active beyond the retirement age. However, a retirement system relying solely on the willingness of an aging workforce is neither fair nor sustainable.
The challenges of an aging society require a comprehensive and forward-thinking approach. Besides promoting the employment of older workers, other measures must be taken to ensure social security. It is the responsibility of policymakers, employers, and employees alike to work together in close cooperation to successfully tackle the challenges of demographic change and ensure stable social security for all members of our society.
Susanne Gold, July 2023.