It has been somewhat optimistically stated that it is time to retire retirement. We are being told to expect to work until 70 or beyond. Governments internationally are pushing out the ages at which pensions can be claimed and influential bodies such as the OECD are pointing to the inevitability of longer working lives as the average life expectancy is increasing.
However, it is contestable whether this is a realistic goal for all workers, raising the question as to what happens to those who, for whatever reason, are either unable or unwilling to remain in the paid labour force, for instance if they have caring responsibilities, cannot find work or are forced to exit due to a health condition.
More generally, with the present national debate framed around 'lifters and leaners' and 'taxed and taxed nots', there may be a risk of stigmatising those who retire from the paid workforce as no longer pulling their weight in a society where retirement is rapidly being recast as a kind of unemployment.
The Australian labour market has undergone substantial changes over the past few decades. This trend is likely to continue as we are confronted by what has been called the 'Fourth Industrial Revolution' -- driven by artificial intelligence and robots.
By 2031, up to 2.5 million older workers may have been made redundant due to automation. Not only will they be out of work but also their skills will be outdated.
While numerous reports have considered what this technological revolution will mean for the labour market, the specific impacts on older workers have not been considered. Workers of all ages will be affected by these changes, but older workers may be disproportionately so.
A report last year by the Committee for the Economic Development of Australia (CEDA) found that around 40 percent of current jobs in Australia are at high risk of automation in the next 15 years. This remarkable statistic, while only a rough estimate based on extrapolating from more detailed U.S. research, highlights the significance of this issue for the future of the Australian economy and society.
However, if older workers are considered, the impact is even more dramatic. By 2031, of the roughly 5 million Australian workers currently aged between 35 and 50, 49 percent will be in occupations highly likely to have been automated.
This means that, by 2031, up to 2.5 million older workers may have been made redundant due to automation. Not only will they be out of work but also their skills will be outdated. This will not be occurring in isolation, at the same time an approximately equal number of younger workers will also have been made redundant.
Most economists and futurists are optimistic about the impact of artificial intelligence and robots on overall labour demand. They suggest that this will be like all other major industrial and technological change that has historically occurred and will create as many jobs as are destroyed.
However, the new jobs will be radically different from the old ones and will require different skills. If projections are even half true and 2.5 million Australian workers are made redundant over the next 15 years, it will require a massive program of retraining and education to avoid substantial social and economic deterioration.
When large scale layoffs have occurred historically, many workers have moved on to find other employment. However, this is least likely to be the case for older workers. One study found that 96 percent of retrenched workers aged between 55 and 59 did not find further employment following retrenchment.
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Recommendations for addressing the challenge presented by the rise of AI and robots have focused on creating a flexible and versatile workforce, primarily through the education system. However, older workers are significantly less likely to be offered training by their employer to keep their skills up to date, due in part to a perception that it is a less worthwhile investment when compared to training a younger worker.
Even if older retrenched job seekers do manage to retrain after their old skills are made redundant, they may have to enter a new job at, or close to, entry level and compete with newly trained, younger workers. Evidence suggests that those younger workers are often more likely to be hired.
Unless Australia takes urgent steps to head off this confluence of factors, it faces a steep rise in the numbers of unemployed and underemployed aged over 50.
This will mean carefully examining all of the above factors and developing strategies to counteract the negative forces and harness the positive. In particular, it may mean that many workers will see a widening gap between the age at which they cease paid work, and the age at which they will qualify for the Age Pension or superannuation.
Rather than stigmatising retirement, perhaps we should be embracing the notion of stopping paid work in our fifties and let robots do all the hard yakka... Or is that just wishful thinking?