Over the previous years, societies across the globe have debated on the globally exacerbating demographic issues. Particular emphasis has been put on the phenomenon called the aging of society. Due to significant improvements in the quality of life and general access to health care, our world has been experiencing growth in the number of older people constituting our population.
It may not be a surprise to hear that an aging society can substantially impact the economy. Affecting the economic growth, labor market, and retirement systems, this demographic trend can evoke numerous social concerns and keep economists up at night. This outlook can effectively absorb our attention and direct it in a particular, quite pessimistic way.
However, one more phenomenon related to the aging society has a significant impact on our everyday reality but is not adequately discussed. I am talking about age discrimination.
Ageism - the term widely used to describe this problem – was coined and popularized in 1969 by an American pioneer in exploring the process and effects of aging, Robert Neil Butler. This term describes general discrimination embedded in the age of a person; it has been referred to as the "discrimination approved by society" due to the prevalent risk of death, illness, and lack of independence that can be experienced by older people.
According to the study reports from the American Association of Retired Persons (AARP) and the Economist Intelligence Unit, "age discrimination cost the nation $850 billion" in GDP in 2018. Bias related to age can be harmful to older people, their professional position, and the economy. As AARP documents show, "by 2050, losses due to age discrimination could climb to $3.9 trillion".
Among the central issues related to ageism are involuntary retirements due to widespread age bias in many companies' environments. Older people tend to be pushed to the decision of retirement despite the will to continue their work. In addition to that, older people often have to search for part-time jobs due to the lack of long-term offers available for them in the labor market because of the screening process. The reality of ageism taking over the world can become even more severe if we think of technological advancements due to the fourth industrial revolution.
Why is ageism so harmful?
First of all, it is crucial to bear in mind that the older the person is, the more experience and valuable knowledge they possess. Those are qualities are exceptionally hard to substitute and generate enormous profits for companies of all branches. Paul Rupert, the founder and the CEO of Respectful Exits, highlights: "People walk out of companies now with an enormous amount of intellectual property in their heads (…) if that knowledge is not captured and transmitted to the next generation, that company is losing a tremendous chunk of capital".
As I have already mentioned in my posts about diversity and epistemic injustice, discrimination is a thief, robbing us of the (already scarce) human resources. Denying the elderly opportunities to enrich the market with their intellectual assets takes away society's possibility to profit from their solutions.
The aging of our society leads to the enlargement of the customer segment consisting of older clients who need specific solutions, primarily due to numerous technological developments. Older people in the labor market are naturally the best advisors regarding this particular customer group's needs.
How could the problem of ageism be fixed?
Particular measures may turn out to be significantly helpful in combating the adverse effect that age-based bias could have on society and the economy.
Introducing more flexible hours and forms of work can successfully enable our society's older representatives to continue their professional careers. Developing new ways to allow them to adjust to neverending dynamic changes in the world could create even more opportunities to enrich our society. Can you imagine your grandma completing a complicated financial analysis spreadsheet in Excel? Well, you actually could.
A multigenerational workforce is a concept that could effectively help economies, especially those based on the redistributive pension system: the more active employees, the easier it is to hold the pension costs.
The aging workforce's realities will eventually force companies to change their attitudes towards older employees - in the end; we will all finally age! Demographic changes related to the aging society cannot be solved by short-term solutions fueling discrimination. They need multifaceted changes in the social perception of older people and significant reevaluation of the current systems.
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