Thank you, Minister Johnson, for hosting this conference.
And thank you, Secretary-General Johnston, for that interesting and informative overview of OECD aging employment issues.
The United States, like many of your countries, will soon experience a dramatic change in demographics.
In just a few years, Baby Boomers—those born from 1946 to 1964—will begin to retire. And because from 1965 and 1985, the U.S. experienced a declining birth rate, there will be fewer younger workers to replace older workers as they retire.
The U.S. labor force growth will slow from an annual rate of 1.6 percent over the last 50 years to a projected annual rate of just .6 percent over the next 50 years.
The aging workforce will pose new challenges to our retirement and health-care systems. In fact, by 2018, the Social Security system will pay out more in retirement benefits than the government collects in payroll taxes.
That’s why President Bush has made strengthening the Social Security system one of the highest priorities of his second term. But there are many other aging workforce issues that must be addressed, as well.
The United States is working hard now to build a skilled and prepared workforce that includes more options to accommodate the growing number of older workers choosing to stay in the workforce.
After all, many of the challenges our societies face regarding older workers are the result of positive trends: people are living longer than ever before, are healthier than ever before and are choosing to stay in the workforce longer than ever before.
Since 2001, employment in the U.S. among persons aged 55-64 has increased. In fact, the unemployment rate for older workers is 3.5 percent—well below the U.S. national unemployment rate of 5.4 percent. And since 2001, median wages and earnings for full-time older workers have grown at a faster rate than for any other age group.
The vitality of this segment of our population is reflected in the fact that, according to the 2000 U.S. Census, 78 percent of Americans 65 and older owned their own homes. More than 70 percent earned income from financial assets.
Between 2002-2012 it is expected that the annual growth rate of workers 55 and older will increase nearly four times faster than that of the overall labor force.
So it is important that economies continue to grow, create new jobs and that workers of all ages continually update their skills so they can have as many choices as possible throughout their working lives.
The U.S. economy has a strong record of achievement in all of these areas. We’ve seen 21 straight months of job growth and 3 million new jobs created. Unemployment remains at about 5.4 percent, lower than the average of the 1970s, 1980s and 1990s. GDP grew at an annual rate in 2004 of 3.8 percent.
In addition, productivity continues to increase at a historically high level—3.1 percent over the past 12 months—ensuring higher wages for workers.
During this time of growth, older workers have fared better than almost any other segment of the population. That’s due in no small part to the fact that the United States has adopted flexible labor market policies that provide as many options as possible for all workers, especially older workers.
Studies have shown that almost four out of five workers plan to continue working after reaching retirement age.
In fact, the participation rate for the 55-64 age group has grown from 55.1 percent in 1982 to 56.2 percent in 1992; to 61.9 percent in 2002; and it is expected to reach 65.1 percent by 2012.
So the United States has adapted its workforce policies to accommodate these changes.
In addition to flexible labor market policies, other key changes and trends influenced by the changing demographics of older workers include:
* Employment laws prohibit age discrimination in all aspects of employment;
* More workers are phasing into retirement. Most older workers—80 percent—say they plan to work at least part time in retirement;
* In 2000, retirees 65 to 70 years of age who wished to remain in the workforce in some form were no longer penalized with reductions in their social security payments from the government. This helped increase the labor force participation rate of older workers.
In fact, between 2000 and 2008, the proportion of older workers in managerial/administrative and professional technical jobs is expected to increase by 2.9 percent and 1.6 percent respectively.
Many employers recognize that retaining the skills and knowledge of older workers in the workforce is a big plus for our economy and for our competitiveness.
Also, beginning in 2000, the retirement age for receiving Social Security benefits increased gradually, to reflect the fact that older workers are healthier and choosing to remain in the workforce longer.
To help older workers keep their skills current, the United States has developed several initiatives and programs to help. Chief among them are the President’s High Growth Jobs Training and Community College Initiatives.
Community colleges are a tremendous resource for older workers. They are accessible to every major community and provide affordable, value-driven, skills education.
The President’s High Growth Job Training Initiative seeks to leverage this key resource by linking community colleges with employers to develop relevant, up-to-date curricula.
This initiative recognizes the fact that one of the key challenges for workers of all ages in the G-8 economies is to commit to the lifelong learning necessary to maintain a high level of skills.
In addition, the Labor Department’s Partnership for Jobs Initiative helps employers connect to the services of the publicly funded workforce investment system and develop national employer partnerships for older workers.
Through just one of these employer partnerships, more than 12,000 older workers have been hired nationwide.
This has been accomplished through the nationwide network of more than 3,500 One-Stop Career Centers, which provide a wide range of services to meet the needs of our workforce—young and old.
I know there is a similar network of resource centers throughout Great Britain. I am pleased to note that the U.S. Department of Labor has been working with the U.K. Department of Work and Pensions to exchange ideas on strengthening these services.
In closing let me say that education, innovation and flexibility are the keys to ensuring the widest possible range of choices for older workers.
Today, more workers than ever before are living longer, healthier and more productive lives. Today, more workers than ever before are choosing to remain in the workforce in some form. And today, more workers than ever before can afford the secure retirement once available only to a few.
Working with these trends, rather than against them, is the best way to accommodate the wishes of older workers and ensure that the dreams of this key segment of our society indeed become reality.