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Q. Dear Wizard: What are companies, such as stressed U.S. automobile manufacturers, doing to transform themselves in an effort to compete globally and - how do these changes affect the mature workforce?
A. Here's a peak at one such employer. 65% of GM's hourly workforce is eligible for early, or full, retirement. They will be replaced by newer workers earning approximately 50% less which will adjust GM's compensation to be more in line with Toyota's. GM still faces a major competitive challenge in that Japan's government subsidizes pension plans and other social benefits and, unlike U.S. firms, these costs are not passed along to their manufacturers.
Bottom line? Expect more early retirement offerings from firms saddled with high pay for blue collar workers, more outsourcing, more just-in-time or project work for mature workers. Market-based global competition is a reality we all have to face and figure out how to adjust our lives to the circumstances that prevail.
Q. What interesting reading about the looming brain drain have you read lately?
A. As a follow-up to their 2006 report, Ernst & Young has a new report available entitled "2007 Aging U.S. Workforce Survey: Challenges and Responses – An Ongoing Review." Basically, E&Y confirms that employers are still not deliberate in their planning for the coming brain drain. Results demonstrate that a serious approach to planning must happen NOW despite limited resources, escalating responsibilities and increased regulations. Survey findings are based on responses from a sampling of senior human resources/human capital executives from Fortune 1000 companies in a variety of industry sectors.
The IBM Global Human Capital Study (2007) surveyed 400 organizations in 40 countries and in a range of industries. The study's number one finding was this: organizations must develop an adaptable workforce that can rapidly respond to changes in the outside market. They also reported that organizations must have an integrated talent management model that addresses the employee lifecycle.
The S-AGE predicted all of this many years ago and adds that HR executives will be charged (and charged soon) with responsibility for identifying financial risks due to demographic change and ever-shorter job tenure among younger workers. According to the U.S. Bureau of Labor Statistics, median job tenure in the 25 to 34 year old group is now 2.9 years
Here's a book recommendation for you: David DeLong, author of Lost Knowledge: Harnessing the Creative Workforce, addresses specific examples of real knowledge loss that occurs, in part, as a result of retirement.
Finally, go to the www.agelessinamerica.com website and access archived newsletters for additional relevant data from our latest adventures in reading.
Q. Why do you keep writing about Social Security?
A. Because I keep being asked about Social Security, because the system is not what most people think it is and because nobody appears to be acting NOW while there is still time to seek a solution.
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Social Security was never intended to subsidize very many folks' old age.
- The government spends the money received from us for our Social Security.
- Social Security is not invested in generating revenue. It relies on workers' willingness to pay FICA taxes.
- If Boomers and Gen "Yers" each number between 76 and 78 million people but Gen X is much smaller than either group, who will pick up the burden in the intervening years? Will it be the taxpaying public?
- The government has made one very small step toward a "fix" by raising taxable income base on FICA from $97,500 to $102,000 in 2008. It is not enough.
- It is an election year and Social Security changes will not happen, while in the future raised taxes and cut benefits may be expected, regardless of who is elected.
- But - the real and immediate issues are Medicare and Medicaid. Given a choice, we had better start fixing this problem first. Your voice can be heard.
Q. You reported recently that the U.S. ranks 42nd in global longevity. How come?
A. Poor lifestyle choices, principally.
But, let's look at the future. Americans age 55 and older are expected to double between today and 2030. What does this mean? There are 60 million Americans (21%) of today's total population 55 or over and we will have 107.6 million (31%) of Americans 55 and older by 2030. Take another step. Get fit. Make better choices. Outlive predictions.
If you are 65 today, you have an average life expectancy of 17.9 years (19.2 for women and 16.3 for men). The likelihood of a 65 year old surviving to the age of 90 has doubled over the past 40 years. Do you have enough money for the journey if you don't work later in life than planned?
Q. Why do you think mature workers who work longer are important to our economy and our society?
A. Permit me to quote my colleague, Carleen MacKay, on the subject.
"The mature workforce is America’s competitive advantage,
an insurance policy against the ravages of poverty,
a safeguard against the loneliness and boredom of older age,
an offset to outliving our money
and the lifeguard of our children’s assets."
Have you ordered Ageless in America's MYTH cards?
Please read about our myth cards on our website's home page. They are being used by independent career coaches, the California Agencies on Aging as well as by the Santa Barbara Community College Job Fair attendees. Here's what one reader said about the myths, the facts and the tips our cards offer: "I was worried about overcoming a prospective employer’s concerns about my ability to compete as an older worker. I used a few of your tips in a recent interview and, in part, believe that knowing how to deal with these biases increased my self-confidence and resulted in my receiving a job offer."
Carleen MacKay & Brad Taft
info@AgelessInAmerica.com
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