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90–721 PDF 2004

S. HRG. 108–230

OVERCOMING OBSTACLES AND CRAFTING

OPPORTUNITY FOR OLDER WORKERS

FORUM

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

WASHINGTON, DC

SEPTEMBER 3, 2003

Serial No. 108–20

Printed for the use of the Special Committee on Aging

(

SPECIAL COMMITTEE ON AGING 

LARRY CRAIG, Idaho, Chairman 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

MIKE ENZI, Wyoming 

GORDON SMITH, Oregon 

JAMES M. TALENT, Missouri 

PETER G. FITZGERALD, Illinois 

ORRIN G. HATCH, Utah 

ELIZABETH DOLE, North Carolina 

TED STEVENS, Alaska 

RICK SANTORUM, Pennsylvania 

JOHN B. BREAUX, Louisiana, Ranking 

Member 

HARRY REID, Nevada 

HERB KOHL, Wisconsin 

JAMES M. JEFFORDS, Vermont 

RUSSELL D. FEINGOLD, Wisconsin 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

DEBBIE STABENOW, Michigan 

LUPE WISSEL, Staff Director 

MICHELLE EASTON, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Larry E. Craig ..................................................... 1

PANEL OF WITNESSES

Barbara Bovbjerg, U.S. General Accounting Office, Washington, DC ................ 2

Debra J. Cohen, Ph.D., SPHR, Vice President of Knowledge Development, 

Society for Human Resource Management, Alexandria, VA ............................ 4

Craig Spiezle, CEO, AgeLight Consultancy Group, Clyde Hill, WA ................... 24

Leora Friedberg, Ph.D., Professor, Department of Economics, University of 

Virginia, Charlottesville, VA ............................................................................... 32

Melinda Adams, State Older Worker Coordinator, Idaho Commission on 

Aging, Boise, ID ................................................................................................... 52

(III) 

(1)

OVERCOMING OBSTACLES AND CRAFTING 

OPPORTUNITY FOR OLDER WORKERS 

WEDNESDAY, SEPTEMBER 3, 2003 

U.S. SENATE, SPECIAL COMMITTEE ON AGING, Washington, DC. 

The committee met, pursuant to notice, at 2:36 p.m., in room 

SD–628, Dirksen Senate Office Building, Hon. Larry Craig (chairman of the committee) presiding. 

Present: Senator Craig. 

OPENING STATEMENT OF SENATOR LARRY CRAIG, CHAIRMAN 

The CHAIRMAN. Good afternoon everyone. Welcome to the U.S. 

Senate’s Special Committee on Aging’s Forum on Older Workers. 

We have attempted this format for the second time today to bring 

experts together moderated by another expert to talk about issues 

and to build a record for the Congress that we think are critical 

issues to older Americans. Certainly overcoming obstacles and 

crafting opportunities for older Americans as it relates to their ability to stay in a workforce and be a part of a workforce is critically 

important. 

Today’s forum will be moderated by Barbara Bovbjerg of the 

General Accounting Office. Barbara, we thank you and I will turn 

this over to you in just a moment. 

It is so important and appropriate for us to expand our discussion as it relates to America’s workforce, as we have just come out 

of the Labor Day holiday where we honor America’s workforce, and 

to talk about the role older Americans can play in that workforce. 

As many of you know, unemployment in the United States has 

risen considerably over the past 3 years and has leveled off at 

around 6 percent. Of course, this unemployment is a cyclical response to an economic turndown that began in 2000 and had its 

seeds, some would argue, back to the technology stock bubble of the 

mid–1990’s. 

Fortunately, tax relief policies undertaken over the past 3 years 

have finally begun to bear fruit. If you look at inventories today 

and all of that, there clearly is significant growth in the economy. 

If you look at the stock market as an indicator, it has jumped almost 2,000 points in a half a year. 

At the same time, when we talk about the dynamics of returning 

to full employment in the economy, there remains out there, an argument of concern for so many of us. In seven short years the U.S. 

Bureau of Labor Statistics projects a shortfall of 10 million workers 

in the United States. Prior to the recession I had seen figures that 

2

would have suggested that by the year 2010, if we had sustained 

the level of full employment we saw during the last half of the 

1990’s, that we would be at a nearly 20 percent deficit in the workforce. 

Americans aged 65 and older are expected to increase 26 percent 

from 2005 to 2015. The number of Americans aged 40 to 54 will 

shrink by 5 percent. Our aging population makes it essential that 

we find ways to harness the skills, the talents, and the experience 

of older Americans, what they have to offer to their communities, 

and what they have to offer to this nation. 

In order to prepare for the future it is important that lawmakers 

understand what is happening now with the older workforce and 

learn what the experts say about necessary changes as we move 

into a new era of work shortage. 

Other hearings we have held before this committee talk about 

the dynamics and the character of our culture in this country 

versus that of other countries. While we have been a country that 

has allowed significant in-migration that can help offset a workforce problem, what that in-migration oftentimes does not offset is 

the skill or the talent that is critically necessary. Sometimes those 

who come must train. Those who come must develop a level of expertise or education that is, in many instances, held by and offered 

up by older Americans who have already been in the workforce and 

have that talent. 

In order to prepare for the future I think it is important for lawmakers to understand, as I have said, ‘‘What is happening and 

what we ought to do about it.’’ That is why we have assembled this 

panel of experts today and I look forward to their testimony. 

I am going to be able to stay around for a few moments and listen to some of the testimony. With that consideration, I would like 

to introduce to you today and to the forum, Barbara Bovbjerg. Ms. 

Bovbjerg is the Director for Education Workforce and Income Security at the U.S. General Accounting Office. 

Her record of achievement at the GAO, I think, is very impressive. I think both by her comments and her expertise with the experts today you will readily agree that she is the right person to 

moderate this forum. 

So Barbara, I will turn it over to you and again thank all of you 

for attending today. I hope these kinds of forums are valuable for 

the audience as we work to build a record for the greater Senate 

to use. Thank you. I will turn it over to you. 

STATEMENT OF BARBARA BOVBJERG, U.S. GENERAL 

ACCOUNTING OFFICE, WASHINGTON, DC 

Ms. BOVBJERG. Welcome back to work everyone. An interesting 

week for some of us. Some of you had to travel a long way to get 

here this week when everybody is going back to school and going 

back to work. Some of us are fighting traffic that we had gotten 

used to not seeing. 

I am very pleased to be here and I thank Chairman Craig and 

the Committee on Aging for sponsoring this forum and calling attention to this important issue. 

GAO has, for this committee and for their colleagues in the 

House, done several studies of older workers and some of the issues 

3

that come about in thinking about the future of our labor force. 

There is a lot of room in this field so we are really pleased that 

a lot of people are thinking about these issues. I appreciate your 

all being here. 

As Senator Craig said, the population that is 55 or older is poised 

to grow dramatically. It is about 21 percent of the population 

today. It will be 29 percent in 2019. At the same time, however, 

labor force growth will slow from about 1.1 percent to .7 percent 

annually. This is a huge reduction. 

Slower growth in the labor force and the resulting shortage of 

skilled workers has serious implications for the national economy— and for our retirement systems, by the way, which is something 

that I know that the Aging Committee has called to everyone’s attention. 

We need to provide incentives for American workers to delay full 

retirement and incentives for American employers to let them. 

I am looking forward to what everyone has to say here today 

and, as I understand the format, each person will be speaking for 

about 10 minutes. But we are forgiving here. 

Once each panelist has an opportunity to speak, we will take 

questions. I know that you have little cards to write your questions 

on. I hope you will pass them to Scott Nystrom, and we will go 

from there. If you guys are not very forthcoming with questions, I 

am sure I will have some. 

Let me go ahead and introduce each panelist and then I will just 

turn it to them—we will start down at the furthest end. 

Debra Cohen is the Vice President of Knowledge Development at 

the Society for Human Resource Management. I know that she is 

coming here today to speak about a survey of human resource professionals that she has done. I think you will find it quite interesting, and I encourage you to read her paper as well. 

Craig Spiezle is the CEO of AgeLight Consultancy Group in 

Clyde Hill, WA, which I understand is in Seattle. He will be talking about technology and older workers. 

Leora Friedberg is a Professor in the Department of Economics 

at the University of Virginia. She will be here to talk about the disincentive to labor participation that the earnings limit in Social Security creates. 

Last, but not least, from Idaho, Melinda Adams is the State 

Older Worker Coordinator with the Idaho Commission on Aging. I 

think she probably, the most among us, is right there in the 

trenches with this issue. So we will be very interested in what she 

has to say. 

With that let me turn over to Dr. Cohen.

4

STATEMENT OF DEBRA J. COHEN, Ph.D., SPHR, VICE PRESIDENT OF KNOWLEDGE DEVELOPMENT, SOCIETY FOR 

HUMAN RESOURCE MANAGEMENT, ALEXANDRIA, VA 

Ms. COHEN. Thank you. Good afternoon, Chairman Craig and 

other members from the Senate Special Committee on Aging that 

may also be here. 

My name is Deb Cohen, as Barbara said, and I am the Vice 

President for Knowledge Development at the Society for Human 

Resource Management. Thank you very much for the opportunity 

to speak here today. 

Let me start by just telling you little bit about the Society for 

Human Resource Management, SHRM. We are the largest association devoted to human resource management, representing more 

than 175,000 human resource professionals. Our mission is to serve 

the needs of human resource professionals by providing the most 

essential and comprehensive resources available. 

As an influential voice, the Society’s mission is also to advance 

the human resource profession to ensure that human resources is 

recognized as an essential partner and contributor in developing 

and executing organizational strategy. 

The Society was founded in 1948 and currently has more than 

500 affiliated chapters within the United States and members in 

more than 120 countries. 

Related to our mission to serve the professional and to advance 

the human resource profession, SHRM conducts research on important workforce issues on an ongoing basis. I would like to report 

today about one survey in particular, our older worker survey, 

which we recently completed with two partners, the Committee for 

Economic Development and the National Older Worker Career 

Center. 

In addition, I will also mention research from two additional 

studies, our 2002 workplace demographic trends survey, as well as 

the 2002 SHRM/USATODAY.com job satisfaction poll, both of 

which have implications for a discussion about older workers. 

First, let me start by talking a little bit about the context here. 

Individuals who are age 40 and above are protected by Federal legislation in the Age Discrimination in Employment Act. From a 

legal perspective, this means that as workers age, they should be 

able to get, retain, and advance in jobs. 

As a practical matter, though, organizations are still in need of 

dealing with perceptions related to older workers and understanding any stereotypes that might exist. 

What then is the age at which someone is considered to be an 

older worker? That was the first question that we had. Does it coincide with what Federal law states? 

In the chart on the screen, what you can see is that really the 

data is all over the map. The largest percentage of respondents, 28 

percent, indicated that they think workers begin considering employees between the ages of 55 and 59 as older workers, followed 

by workers between the ages of 60 and 64, which was at 25 percent, and workers between the ages of 50 and 54 at 23 percent. 

Just 12 percent on either end reported that workers considered 

to be between 40 and 49 to be older and those above 70. 

5

Let me just stop for a moment and tell you a little bit about the 

methodology to provide you with some context here. 

The survey program at the Society, in conjunction with the two 

partners, developed the survey instrument. We worked back and 

forth and also used human resource professionals as experts to determine are these the right questions we should be asking. 

We then pulled a random sample of our membership. Our membership at the time was about 170,000. We pulled a sample of 

2,500. Of that we got about a 20 percent response rate. So we feel 

pretty confident in the results. We actually had responses from 428 

human resource professionals. 

So the context here is that we are asking H.R. professionals what 

they thought about older workers relative to employment, as well 

as what they thought employees in their organization thought 

about hiring older workers. So that is the context for this. 

So what this data indicates, in terms of the age people are considered to be older workers, is that human resource professionals 

believe that workers have perceptions regarding older workers that 

vary widely and are not necessarily limited to what Federal legislation protects, and spans a relatively long period of time in terms 

of a work life. 

Next, I would like to talk a little bit about the advantages and 

disadvantages of hiring older workers. In two separate questions, 

H.R. professionals were asked their opinion about the advantages 

and disadvantages of hiring folks as compared to other workers. 

Respondents were then provided with a list of 13 advantages and 

10 disadvantages and were asked to check all that applied. 

In this chart, and the chart that I will show in a moment, clearly 

indicate that opinions about factors that were considered advantages were far stronger than opinions about factors that were considered to be disadvantages. You can see just by the space alone. 

But in terms of some of the issues, organizations really might 

wish to capitalize on the factors that are seen as advantages and 

address the factors that are seen as disadvantages. For example, 

in the previous slide, the top three factors identified as advantages 

provide some potential suggestions for H.R. professionals and their 

organizations. Creating and allowing flexible schedules, for example, has become a necessity in today’s work environment for all 

workers, certainly. By in this particular case we are seeing this 

time and time again with older workers. 

So if older workers are indeed more willing to work different 

schedules, then organizations that work with this flexibility may be 

able to have a positive impact on schedules overall for the entire 

workforce. 

Using older workers as mentors, for example, may also be a way 

for organizations to retain and develop institutional memory and 

knowledge, while at the same time capitalizing on the invaluable 

experience of older workers. 

Programs that capture and use these advantages will need to be 

modeled in organizations but the concept is a good starting point. 

Clearly every organization is different and programs would need to 

be modeled to each organization. 

In terms of the identified disadvantages, the only factor to receive a majority percentage response referred to the concept that 

6

older workers do not keep up with technology. I know that Craig 

will be talking about that in just a few moments. 

This fact clearly may vary from organization to organization, but 

it is an issue that is easily dealt with, regardless of how strong of 

an issue it might be in an organization. Providing training and 

education, for example, for all workers, including older workers, 

and to communicate to all employees the organization expectation 

for keeping up with technology as it relates certainly to one’s job 

are part of an employee’s review performance or could be. 

So every organization may have its own unique issues and this 

survey clearly, however, indicates that many of the factors that are 

identified in organizations as relating to the advantages and to the 

disadvantages can be addressed through regular employment interventions and activities. As human resource professionals, these 

folks certainly are in the best position to do that. 

We then looked at whether or not there was any hesitancy of organizations and of hiring managers to hire older workers. Although 

we did not actually survey hiring managers, we felt that human resource professionals who worked with hiring managers on a dayto-day basis would be in an excellent position to know what they 

were thinking and what their perceptions were. 

So H.R. professionals were asked their opinions about how hesitant they thought their organization is to hire older workers and 

how hesitant hiring managers are in hiring older workers. So one 

of the questions essentially reflected organizational culture and 

then the second question reflected individual perceptions, if you 

will. 

Overall, the results show that 48 percent of H.R. professionals 

believe that organizations are not at all hesitant, while they think 

only 38 percent of hiring managers are not at all hesitant. So this 

indicates that the culture of an organization may be a bit more 

open than individual hiring managers, in terms of not at all being 

hesitant about hiring older workers. So although this question reflects the H.R. professionals’ perspectives, again we think this is a 

pretty good insight into what hiring managers might be thinking. 

If you will notice in the bar on the far right, the opinions flip 

when you look simply at a little bit of hesitancy on the five point 

scale. Overall, the result if you look at means, it is 3.13 for the organization versus 3.24 for individuals. Essentially what this shows 

is that there may be room here for organizations to educate their 

hiring managers with regard to their openness to hiring older 

workers. It may well be that the organization’s culture is more 

open to them than individuals are. So that is one thing to keep in 

mind. 

Next, we wanted to look at the impact of the aging workforce. 

SHRM has certainly been interested in the impact that an aging 

workforce will have on H.R. policies and practices, as well as other 

demographic factors. The reason for this interest, of course, has 

been many fold. As Senator Craig stated in his opening remarks, 

we know from statistics tracked and published by the Bureau of 

Labor Statistics as well as other agencies, that the workforce is 

aging and that there is going to be a shortage of workers in the 

next 10 years and beyond, particularly in certain skilled jobs. 

7

So our concern then has been that while we know that there is 

an aging population that is going to spark greater retirement, and 

fewer births will result in less replenishment of retired workers, 

that organizations are perhaps more concerned with current employment issues and have less focus on the implications of demographic changes. 

A focus on current issues is certainly not a bad thing but a focus 

on that to the exclusion of focusing on changes that will occur and 

will have an impact is potentially problematic. 

So in our 2002 workplace demographic trends survey, we asked 

H.R. professionals in their opinion about to what extent the aging 

population impacted their workplace in the past year, what they 

thought over the next 2 years, and what they thought for the next 

5 years. 

Chart 5 shows that while H.R. professionals believe there will be 

a greater impact from the aging population than in the year preceding the survey, the reported impact is still not particularly 

great. So these results also indicate that H.R. professionals and 

their organizations are probably not likely to address these issues 

of an aging population to any great extent in the near future. 

Again, this may cause some problems. 

The data then from the older workers survey that we just completed, just a little bit more than a year later, has a similar approach and a similar theme to it. That is the majority of H.R. professionals indicated that they did not believe that changes in the 

workforce were forcing changes in recruiting, in retention, and in 

management policies and practices. Only 4 percent indicated that 

changes were occurring to a very large extent, about one-quarter 

said to some extent. So this may indicate a shortsightedness on the 

part of organizations and perhaps H.R. professionals with regard to 

addressing the impact of an aging population. 

For example, if recruitment or retention of management practices 

are adjusted to account for the aging workforce in one’s organization by capitalizing on the advantages and the disadvantages that 

we just showed you, it may well be that the organization can be 

better prepared to deal with labor shortages and better able to accommodate an older workforce. 

Next, because recruitment and retention is such an important 

issue, we also looked at that as well as reasons for folks wanting 

to work, as opposed to remain retired. Although it appears that not 

many H.R. professionals or their organizations have made changes 

in their recruitment and retention and management practices, we 

felt it would be important to know how they actually do recruit and 

attract older workers. So we asked what methods were currently 

being used directly to target older workers in the recruitment efforts. 

A variety of methods were, in fact, used. But the more telling result is that long bar on the bottom which says that 59 percent do 

not actively recruit older workers. One would expect that this number is going to decrease over time as it becomes increasingly clear 

that one way to deal with the pending labor shortage is to tap into 

existing skills and capabilities in the workforce or in the retired 

workforce. 

8

In addition, the array of recruiting methods which is mentioned 

here in this particular chart may also provide some insight as to 

how organizations might search for older workers in the future and 

to retain or to look for that talent. 

While it is certainly important to know why older workers want 

to work or return to work, from an H.R. perspective it is important 

to know what H.R. professionals think as well. This study only 

looked at H.R. professionals. One recommendation I have is to do 

a study in the future that looks at older worker perceptions in conjunction with H.R. professional perceptions, because this study in 

fact shows that when it comes to why people have returned to 

work, H.R. professionals believe that it is primarily because of, or 

at least at the top of the list, enjoyment, occupying their time, 

money was second, social interaction was third, benefits fourth, 

and so on. For example, challenge only came in at 30 percent as 

reported by H.R. professionals. 

The reason we need to know what older workers are thinking in 

connection with H.R. professionals is because if, let us say for example benefits were at the top of the list or challenge were at the 

top of the list, but H.R. professionals are thinking the opposite essentially, they are the ones that are working within their organizations to design jobs, to price jobs. If there is a disconnect between 

what H.R. professionals or organizations think older workers want 

versus what older workers themselves want, then the jobs will not 

be designed in a way either for the job content or the pay to be in 

conjunction with one another. 

So this chart shows a little bit of that information. 

One of things we also need to look at is that although H.R. professionals cited many advantages to hiring older workers and we 

know that there is this pending labor shortage, it is important to 

also understand what organizations are doing to retain these older 

workers. Retention is important for all workers. We know that 

when organizations experience turnover, it is not necessarily always all bad. But we do know that turnover is expensive and we 

do know that turnover can, more often than not, be dysfunctional 

than functional. 

So that being the case, most organizations tend to make a conscious attempt to consider retention in their mix of human resource 

practices. Our survey, however, revealed—and this is in chart 

nine—that 65 percent of H.R. professionals report that they do 

nothing specific to retain older workers. Relying on traditional retention methods may or may not have a positive impact on older 

workers. There were, however, a few strategies that were reported, 

such as flexible schedules, such as training, reduction of work 

hours, and so forth in an attempt to specifically retain older workers. 

So what are organizations and H.R. professionals doing to prepare for the labor shortage? One theme that has been fairly constant in the past 5 to 10 years is the prediction that as the baby 

boom generation retires there will be a shortage of workers to replace them. As a result, it is important to understand the strategies that organizations and H.R. professionals are using to prepare 

for this shortage. 

9

About one-third of the respondents in our survey, in fact, said 

that they were doing nothing in preparation. However, the other 

two-thirds reported using a variety of strategies, though most were 

used by less than 20 percent. That is what is shown in chart 10. 

Increased training was cited by 36 percent, succession plans or 

replacement charting were cited by 29 percent. This chart shows 

the array of strategies currently being undertaken by respondents. 

In the future, though, one would hope that these strategies would 

be used more often by organizations. 

The final point that I want to make before I turn things over to 

Craig, is to talk a little bit about older workers and job satisfaction. 

Job satisfaction is an issue that is important to both organizations 

and to employees who work in organizations. Historically, there 

has been a correlation between satisfaction and turnover, such that 

if individuals were dissatisfied they were more likely to leave or 

consider leaving an organization. Satisfaction is also believed to be 

related to other workplace behaviors. 

As a result, most organizations tend to be interested in understanding what causes satisfaction and how to maintain satisfaction 

among their employees. Many years of research have shown that 

there is a wide variety of facets of job satisfaction. As a result, 

SHRM has been very interested in studying and understanding 

satisfaction. 

In fact, in late 2002, we conducted a job satisfaction survey in 

conjunction with USATODAY.com. For this particular poll, what 

was interesting is not only did we do a random sample of our professional members, but we also put a similar survey on the 

USATODAY.com website which attracts employees or potential employees. It was a random pop-up. So we had a sample of employees 

and H.R. professionals to compare to one another. 

The perceptions of H.R. professionals and employees varied in 

their assessment of how important certain aspects of job satisfaction are to overall employee satisfaction. H.R. professionals perceived that communication between employees and management as 

the No. 1 aspect that employees deemed as very important to their 

overall satisfaction. Employees, on the other hand, viewed job security as the top aspect that was very important when assessing their 

job satisfaction. 

We then went ahead and did an analysis by employee age and 

employee gender to determine, in fact, if there were any differences. In fact, there were some notable differences in terms of 

what employees considered to be very important. So what we did 

was we took the employee side of the survey and we analyzed it 

by age and we broke it down into these three categories. Employees 

35 and under rated communication between employees and management as the facet of satisfaction of greatest importance contributing to overall satisfaction. Job security, however, was rated as 

the top aspect by employees 36 to 55 age range, while benefits was 

most valued by employees 56 and above. 

So if you take a look at job satisfaction, just in terms of the first 

factor, it was very different when you do a breakdown by age. So 

the application is that organizations then really need to consider 

the needs of different groups of employees if they are to retain and 

10

maintain their satisfaction. You can look at the other factors, as 

well, and see some wide differences there. 

Treating workers generically may not produce the results that 

organizations need or want in terms of retaining and attracting 

and motivating their workforce. 

So the conclusion here is pretty straightforward. We can talk 

about examples of successful older workers and successful plans by 

organizations. In fact, in addition to a copy of the survey today, I 

also brought with me two articles from Human Resource Magazine, 

one that was just recently published last month and one from a 

year ago, both focusing on older workers and highlighting examples 

of organizations and employees who are older workers and successful stories of that. 

So there are lots of examples that abound, but it is very clear 

from the research that we have done, both in the older workers 

survey as well as other surveys that we have done, that human resource professionals and organizations are probably not paying as 

close attention to this issue as they need to in terms of understanding the issues to attract, retain and motivate an older workforce. 

Thank you. 

[The prepared statement of Ms. Cohen follows:]

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Ms. BOVBJERG. A little commercial, I am a little nervous about 

Linda getting to speak. So we are forgiving, but at close to 10 minutes as you can. 

STATEMENT OF CRAIG SPIEZLE, CEO, AGELIGHT 

CONSULTANCY GROUP, CLYDE HILL, WA 

Mr. SPIEZLE. Thank you. My name is Craig Spiezle. I am President of AgeLight, which is a life stage marketing and technology 

consulting group. I would like to thank Senator Craig and the Senate Special Committee on Aging for this opportunity to speak here 

today. 

This afternoon, I am going to discuss the convergence of three 

revolutions facing the Nation. First and foremost is how the United 

States has become a workforce of information workers. Second are 

the effects and implications of the aging workforce. Third is the reliance and the role of technology equipping mature workers to lead 

productive, fulfilling, and rewarding careers. 

Since I last testified, the Nation has made significant inroads in 

providing Internet access to millions of older Americans. Our nation is an information society. The focus of what used to be the digital divide has now shifted to affordable wireless connectivity. 

Based on data from the U.S. Bureau of Labor Statistics and the 

National Telecommunication Information Administration, upwards 

of 70 percent or 93 million workers require the use of computing 

and data input devices. These devices are not only PC’s, but PDAs 

and portable tracking and data input devices. 

We have moved from a Nation of service workers to what is 

called information workers. Information workers are you and I, individuals who are participants in the flow of data and information. 

Information workers are prevalent in nearly every business sector 

and industry. Their occupations range from architects and call center operators to rental car agents and many factory workers, and 

even the meter maids here in D.C. 

Workplace computing has been expanded to include a wide range 

of devices, applications, and occupations. Fueling this is the growth 

of wireless connectivity and more powerful mobile devices, making 

anytime and anyplace computing a reality. Usage is no longer confined to the physical office but in delivery vehicles, city streets, and 

even the corner Starbucks. 

But what do all of these occupations have in common? They all 

require the worker to have the ability to read displays and to have 

the dexterity to type and control input devices to access and enter 

information. 

The profile of the U.S. labor force is in the path of an age wave 

and in the midst of the most dramatic change ever recorded. This 

sea change is the result of the sheer magnitude of the numbers of 

aging baby boomers and reduced birthrates of echo boomers and 

GenXers. Fueling this change is the record number of workers who 

are now continuing to work past their traditional retirement age. 

A study from AARP reports that 69 percent of employees over 

the age of 45 plan to continue to work past the age of 65. The economic recession that began in 2001 and its impact on retirement 

savings and 401(k)s is causing many to re-evaluate their plans and 

lifestyles to now accommodate employment. With longevity and the 

25

economic necessity, many will be working well through their 70’s 

and their 80’s. 

Within the next 5 to 10 years, over 78 million baby boomers are 

scheduled to retire with only 44 million GenXers joining the workforce. According to the Bureau of Labor Statistics, workers between 

the ages of 25 and 54 will only increase 5 percent between 2001 

and 2010. But at the same time, workers over the age of 55 will 

increase 46.6 percent. 

As more workers reach the retirement age, the adverse impact 

on their retirements will have a significant impact on many industries and occupations. Those most affected include public administration, education, and health care. According to the GAO, more 

than 50 percent of all Federal workers will be eligible for retirement by the year 2005. According to research by the Hyde Group, 

70 to 80 percent of all airline pilots will retire within the next 5 

years. Left unaddressed, these workforce shortages threaten to stifle economic growth while increasing wages in high demand occupations. 

Technology skills are playing an ever-increasing role in one’s employability. As boomers work into their later years, they will need 

to embrace new skills and technologies to remain employable. But 

to be employable, one must not only have the skills, but the devices 

must be usable, adaptable, and customizable to compensate for the 

natural physiological changes of aging. 

As our population lives and works longer, the likelihood of developing age-related vision, hearing, and dexterity impairments increase as we approach the age of 40. These changes directly affect 

the aging worker’s ability to use computing devices. For some, such 

as the need of bifocals, this may be an inconvenience. While for 

others, it may become a disability. 

According to a 2001 report from the National Organization of 

Disability, people aged 45 to 54 have an 11.5 percent chance of developing a disability. Yet this figure nearly doubles to 22 percent 

for those ages 55 to 64. 

As reported by SHRM, the largest obstacles cited to hiring older 

workers is that they do not keep up with current technology. The 

respondents overwhelmingly stated that the best way for an employer to prepare for the approaching shortage of workers is to invest in an increase in technical training for the pre-retirees. Clearly ongoing technology training needs to be mandatory. 

Technology has proven to be a counterbalance for people with 

age-related limitations, and the use of implementation of assistable 

and accessible technologies provides a significant benefit. To be accessible, technology must be flexible enough to meet the needs and 

preferences of users with various needs and abilities. Often simple 

customization of the device interface can provide workers the ability to adapt their computing environment to their human factor requirements. Such personalization can benefit all users by offering 

increased usability, productivity, efficiency, and comfort. 

These features can accommodate a range of vision, hearing, and 

mobility needs. Examples include the ability for a user to increase 

fonts, sizes, color, et cetera. Accessibility features built into standard operating systems today include keyboard filters that can help 

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tions. One such example is something called Microsoft StickyKeys 

which allows a user to hold and enter key combinations sequentially without having to hold one key down while depressing another. Users can also adjust mouse properties such as button configuration, pointer and cursor size, and how quickly the cursor responds to the movements of the mouse. 

While these features are included in the majority PC sold today, 

the overwhelming majority of employees and employers are unaware of these options or how to change them. Additionally, few of 

these options and alternatives exist today in many PDAs, cell 

phones, and portable devices whose use is increasing daily. 

For computer users with more severe disabilities, there are over 

100 third party technology vendors who create products specifically 

to accommodate an individual’s disability. Such products include 

speech recognition software, alternative keyboards, braille embossers, and screen readers. 

One example that I think is excellent, is something called a 

PACmate PDA developed by Freedom Scientific for blind users. The 

key to this device is it does not rely on proprietary applications and 

allows the user to share information directly with other information workers. What is unique is prior to this, it was not compatible 

with other devices in the workplace. 

In conclusion, the interaction of technology has rapidly become 

woven into our lives. I believe unless business and industry are 

proactive, they will miss the opportunity to tap the considerable 

value of the aging workers, resulting in a decline in workplace productivity and a negative impact on economic growth. 

To be successful, we need to focus in five major areas. One, the 

workplace environment. Two, the employee. Three, the devices and 

tools required. Four, training programs. Five, the human factors 

and universal design of devices, websites, and user interfaces. 

The workplace environment includes ergonomics, personalized 

work stations, as well as lighting and ventilation. The employee 

needs to also participate in training and education of these new 

technologies, as well as practice healthy computing exercises that 

have proven to reduce muscle and eyestrain. Font size, color and 

such need to be optimized along with the use of ergonomic keyboards and pointing devices offering an enhanced control and precision. 

Companies need to consider replacing CRT monitors with LCD 

displays which dramatically reduce eye fatigue. Employers need to 

consider a comprehensive strategy that includes training policies, 

retention, and recruitment programs. Doing so will slow the exodus 

from the workforce and the knowledge and talent drain while maximizing older worker’s productivity. 

Planning for this inevitable population shift and recognizing the 

importance of the aging workforce will help employers achieve 

maximum productivity and commerce. 

Unfortunately, the technology industry has not been committed 

enough to these human factors and universal design needs of this 

increasing proportion of our population. Hardware, software applications, websites, and user interfaces must both be functionally usable but are often designed for a target audience in their 20’s. FoVerDate 0ct 09 2002 12:06 Jan 05, 2004 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 C:\DOCS\90721.TXT SAGING1 PsN: JOYCE
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cusing on these requirements will enhance usability and improve 

computing and the online experience for users of all ages. 

The recommendations I have made today are not expensive but 

they do take commitment and participation by all stakeholders including employers, employees, as well as the technology vendors. 

Technology can extend, enhance, and enrich employability for all 

Americans. But only if businesses and industry adopt a 

generational perspective so that we understand and integrate mature Americans’ needs into tomorrow’s technologies. Doing so will 

ensure the ability to continue their rich tradition of being positive 

role models will contributing to our Nation’s economy. 

Mr. Chairman, again, thank you for this opportunity to share my 

views with the committee. Thank you. 

[The prepared statement of Mr. Spiezle follows:]

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STATEMENT OF LEORA FRIEDBERG, Ph.D., PROFESSOR, DEPARTMENT OF ECONOMICS, UNIVERSITY OF VIRGINIA, 

CHARLOTTESVILLE, VA 

Ms. FRIEDBERG. Thank you for inviting me here today. I am 

Leora Friedberg. I am a Professor of Economics at the University 

of Virginia. I have done research on the Social Security earnings 

test, which I am going to talk about today. 

One of the obstacles facing older workers is the earnings test, 

which imposes some of the highest tax rates in the economy. A beneficiary aged 62 to 64 loses a dollar in benefits for every $2 in earnings once earnings pass above a little over $11,000. That is effectively a 50 percent marginal tax rate, since total income rises by 

only a dollar when earnings rise by $2. 

Evidence from my research suggests that older workers who are 

on the brink of retirement are more sensitive than younger workers 

to high tax rates. There are two additional features of the earnings 

test that are perverse. 

First, it is a tax that raises virtually no revenue in the long run. 

A 62-year-old beneficiary who works so much in a year that her entire benefit is lost to the earnings test will gain future benefits, so 

that her future benefits will be raised by about 7 percent, the same 

thing that would happen if she had waited another year to claim 

Social Security. Over her remaining lifetime, this gain in the expected present value of future benefits will approximately make up 

for the year of benefits lost earlier. 

Yet, most beneficiaries are unaware of this adjustment to future 

benefits and act as if they were facing a pure tax. 

On the other side of the coin, the Social Security Trust Fund 

gains in the short run from paying out less in benefits, but loses 

an equivalent amount in the long run. 

Second, the earnings test applies only to workers younger than 

Social Security’s full retirement age, which is now 65 years and a 

few months. Then, there is no earnings test anymore. Therefore, 

workers face a high tax from the earnings test for a few years and 

may reduce their labor supply as a result. But later on it is often 

difficult to ramp up hours in a part-time job or to re-enter the labor 

force after retiring. So the effect on hours of work and on labor supply may be the same as if the earnings test were imposed on beneficiaries of all ages. 

I am going to describe today the conclusions from my earlier research on the earnings test. After that I will discuss some research 

by others on the earnings test, as well as more recent evidence I 

have collected about how the earnings test continues to affect older 

workers. 

In a study published in 2000, I analyzed how beneficiaries 

change their hours of work as the earnings test rules changed. Earlier rule changes reveal significant responses to the earnings test. 

Many workers in survey data collected by the U.S. Government responded noticeably by restricting their hours of work so that their 

earnings stayed just at or below the earnings test limit, which has 

gradually increased over time. 

For example, in 1983 the earnings test was eliminated for workers age 70 to 71. Before that, one can see in the data that many 

of them kept their earnings just at the earnings limit. This is 

33

shown later in my statement, if you are interested in looking at the 

distribution of earnings. Afterwards their earnings smooth out. So 

we can conclude they had been restricting their hours of work because of the earnings test. Earlier, in 1978, the earnings limit was raised from $3,000 to $4,000 for people age 65 to 71. In the data one can see the cluster 

of workers just below $3,000 then move their earnings up to the 

new higher limit. So these shifts provide evidence that older workers are sensitive to high taxes. 

Based on these past responses, I used statistical methods to predict how hours of work would change if the earnings test were 

eliminated for ages 65 to 69. These predictions focus on hours of 

work among males who are already working. After I did this study, 

the earnings test was lifted at those ages, in the year 2000. But 

we do not have data yet to compare my simulation results with actual responses. 

The predictions of how hours would change if the earnings test 

were eliminated differ in important ways depending on how much 

someone works and earns. Low earners, who keep their earnings 

just at or below the earnings limit, react most visibly to the earnings test and would be the most responsive to a change. Compared 

to their actual hours of work in 1995, they would be predicted to 

work 50 percent more on average if the earnings test were eliminated. 

Medium earners, who are working somewhat more initially and 

losing some but not all of their benefits, might work more because 

the tax imposed by the earnings test is eliminated, or they might 

work less because eliminating the earnings test raises their total 

income. The estimates I obtained suggest that they would work 

more if the earnings test were eliminated, so that their hours of 

work would increase by 18 percent on average. 

But, there is a different prediction for high earners who work so 

much that they lose all of their benefits. If the earnings test is 

eliminated they receive extra income but face no change in their 

effective tax rate since they were already earning too much to lose 

additional benefits. They would be predicted to work 4 percent less 

on average if the earnings test were eliminated. So it is important 

to keep in mind these different responses by different groups of 

workers. 

Next, I will discuss some research by others on the earnings test 

and after that evidence of how the earnings test continues to affect 

older workers ages 62 to 64. 

Another recent study took a different approach to analyzing the 

earnings test, in a paper by Jonathan Gruber of MIT and Peter 

Orszag of the Brookings Institution. These authors use the same 

data but reached somewhat different conclusions. The important 

difference is that they combined all of the different groups together 

whom I just mentioned, the low, the medium and the high earners, 

to analyze whether overall labor supply changed. 

They reached a few key conclusions. First, they suggested that 

the earnings test has little effect on hours of work. This contradicts 

my findings. It may be attributable to their looking at everyone together which does not distinguish whether large responses among 

individuals are being obscured in the aggregate. 

34

They also looked over different time periods, when the responses 

in the aggregate might have changed and also might obscure big 

responses among individual. 

So, we might reach very different conclusions if eliminating the 

earnings test induced no response by individuals, or if it induced 

large but offsetting responses. In the latter case, even though the 

earnings test might lead some high earners to work less, the gain 

in well-being among low and medium earners who work more is 

substantial. 

My results show that for low earners who kept their earnings 

just at earnings test limit the earnings test makes them worse off 

by an amount equivalent to over $1,900 annually. So, it is important to know how individuals and not just average labor supply is 

affected. 

A second conclusion in Gruber and Orszag’s research is that the 

earnings test may induce some people to retire completely. That is 

something I did not look at in my initial paper, but I have found 

some additional evidence in support of, which I will discuss that in 

a moment. 

The third conclusion, or the third argument that Gruber and 

Orszag made, was that eliminating the earnings test for workers 

age 62 to 64, to whom it still applies, would have a pernicious effect down the road on some people who would benefit from it at the 

outset. 

This argument is based on the adjustment to future benefits that 

I discussed earlier. If the earnings test is eliminated, those who 

would have lost benefits today, and also some deterred from claiming early today, would get benefits early and no longer get higher 

benefits in the future. The concern is that they would end up impoverished at a very old age. 

This argument rests on the following assumptions: that workers 

would prefer to save some or all of the higher benefits that they 

would get today if the earnings test is eliminated in order to consume it at older ages, but that they would not actually save it even 

though they wanted to. Perhaps because they lack the means or 

the foresight and would consume it too soon. 

If those assumptions hold, then we could make them better off 

by getting them to save through the earnings test. That is the 

heart of that argument. 

But we have very little firm evidence about these assumptions. 

If they do not hold, then forcing them to postpone benefits makes 

them worse off, and deters labor supply. 

Another way to address the same concern, that too many beneficiaries would be induced to claim too early if the earnings test 

was eliminated, would be to try to explain how Social Security 

works, and in particular that you get a good rate of return, 7 percent per year, for delaying a year’s worth of benefits. 

In preparation for this forum, I have analyzed recent data on the 

impact of the earnings test and I will briefly summarized that. 

Some graphs and more discussion are available in my longer statement. 

I find that workers age 62 to 64 continue to react to the earnings 

test, with many keeping their earnings just below the earnings test 

limit. That is significant because, at the same time, more people at 

35

those ages are working and fewer are retiring than in the past. So, 

through the 1990’s, more people age 62 to 64 continued to work 

and therefore are being inhibited by the earnings test. 

Moreover, women are reacting a little more strongly than men. 

In my earlier study, I did not look at women because in my earlier 

data they were not working as often at those ages. But increasingly, they are staying in the labor force and working as well, and 

reacting to the earnings test. 

Interestingly, increases in the real value of the earnings limit 

after 1996 led to a little less clustering of earnings just at the limit. 

So workers do continue to show responsiveness to changes in the 

earnings test. 

In my statement, I discuss evidence that older workers age 65 to 

69, continued to react up until the year 2000 when the earnings 

test was eliminated. 

One other piece of evidence focuses on retirement. The concern 

is that the earnings test may lead some people to retire altogether. 

Even though you can earn up to $10,000 and not lose any of your 

benefits, either because jobs are inflexible and it is difficult to tailor your hours to the earnings test or because people are unsure 

about how it works, the earnings test might induce some people to 

retire completely. 

I found that there was little trend in retirement rates among 

workers age 60 to 61 during the 1990’s, just under the age of the 

earnings test. However, retirement rates fell among workers aged 

62 to 64. At the same time, the earnings limit for workers age 62 

to 64 was increasing. The trend matches up pretty closely, and I 

intend to do more research to try to understand what the magnitude of this effect is. 

The effects are significant. For example, the percentage of female 

workers age 62 to 64 who retire each year fell from about 25 percent to 15 percent. That is quite a substantial change. 

Again, by comparing them to 60 and 61-year-olds, we are controlling for other changes in the economy, for example the better economy in the late 1990’s, and the recession that began 2000. 

In conclusion, my research shows that the earnings test leads 

some beneficiaries to reduce their hours of work and perhaps to retire early. 

I want to briefly summarize other research I have done on factors influencing retirement, in part because they relate to some of 

the presentations of the other panelists today. I have done research 

on computer use among older workers and I find that older workers, who use a computer retire later on average than older workers 

who do not. Yet, we should be concerned because firms may be reluctant to train older workers since they do not know when the 

workers will retire and take those skills with them. 

Second, I am finding that older workers are engaging in parttime work at increasing rates, suggesting a growing flexibility of 

the labor market. 

Third, I am finding a major shift in retirement age in response 

to changes in private pension structure, which no one here has 

mentioned yet. As many of you know, workers increasingly have 

defined contribution pensions like 401(k)s, instead of the traditional defined benefit pensions, where you stayed in a job for 20 to 

36

30 years in order to get your pension benefit and then got very little incentive to stay in the job after that. Defined benefit pensions 

first discourage and later encourage retirement whereas the defined contribution pension is neutral toward retirement or toward 

changing jobs. 

I am finding that people with defined contribution pensions are 

retiring 2 years later on average than people with defined benefit 

pensions, also a large difference. 

Thank you. I will be happy to answer questions about my research afterwards. 

[The prepared statement of Ms. Friedberg follows:]

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STATEMENT OF MELINDA ADAMS, STATE OLDER WORKERS 

COORDINATOR, IDAHO COMMISSION ON AGING, BOISE, ID 

Ms. ADAMS. Mr. Chairman and members of the committee, I welcome this opportunity to address how administrative changes in 

employment and training programs could better serve both the 

older worker and the employer. 

I am here today representing the Idaho Commission on Aging. As 

the State Unit on Aging, we are responsible for all Older Americans Act programs and State funded services for older Idahoans. 

I have administered older worker programs for the past 16 years. 

I currently manage Idaho’s Senior Community Service Employment 

Program and serve as staff to Governor Kempthorne’s State Workforce Council. 

Over most of those 16 years, our programs have performed exceptionally well. In fact, the U.S. Department of Labor has profiled as 

best practice our older worker efforts in coordination with the 

broader one-stop career system, and for success in placing low income seniors in jobs. 

Yet, since enactment of the Workforce Investment Act, job training has become increasingly difficult to obtain for older individuals, 

even in Idaho which has historically enjoyed strong State level support for older workers. 

This is consistent with the GAO report issued earlier this year 

which found that most older people enrolled in the Workforce Investment Act received only job search assistance such as instruction on resume writing or interviewing techniques versus job training for specific jobs. Yet occupational training is so critical because 

many older individuals have outdated skills and no recent work experience. 

Why are so few older job seekers getting the training they need? 

In large part, the performance measures that drive the Workforce 

Investment Act actually discourage older worker participation, another fact substantiated by the GAO report findings. 

So, as the Workforce Investment Act is reauthorized, we urge 

that disincentives to serve older workers within the performance 

measure framework of WIA be removed. Specifically, the earnings 

gain measure which compares pre-registration wages with post program wages because it works against serving older individuals who 

want or need part-time work. It also works against people who are 

willing to take a pay cut over what they used to earn simply to get 

a job. 

Additionally, we urge that local workforce boards be required to 

serve older job seekers; that service goals be established as part of 

the State and local WIA planning process; and that long-term unemployed be reinstated as an eligibility criterion for the WIA adult 

and dislocated worker programs. 

The most critical change, reinstate designated funding to serve 

the older unemployed. The legislation just prior to the Workforce 

Investment Act, the Job Training Partnership Act, required each 

State to set aside 5 percent of adult training funds specifically to 

serve older individuals. It was a far more effective approach in that 

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plement to the Senior Community Service Employment Program 

also known as Title V of the Older Americans Act. 

For those not familiar with Title V, it is both a public service and 

work experience program for needy older workers. The program 

pays wages, minimum wage, 20 hours a week to seniors assigned 

to schools, hospitals, other nonprofits. The program also, though, 

provides valuable infrastructure support to the aging network within the States as well as providing critical income support for many 

poor seniors. 

At the same time, the program has evolved into an employment 

program, a springboard for those seniors who with occupational 

training and work experience can successfully compete for jobs off 

the program. The demand for the program is great, as evidenced 

by a study conducted by the Urban Institute that found that the 

program only reaches 2 percent of the eligible population. 

However, to expect increased appropriations for Title V within 

this economic climate is simply unrealistic. So it seems the practical solution is to look at cost efficiencies within the program. 

An immediate improvement would be to rescind the recent prohibition on the use of existing Title V grant funds for 502e activities 

which includes private sector work experience. 

The administrative structure of the Title V program also needs 

revision. Currently, 78 percent of the allocation goes to 14 national 

aging contractors. The remaining 22 percent goes to each State for 

a State administered program. To illustrate, 78 percent of Idaho’s 

allocation goes to four different national aging contractors who, in 

turn, each operate the program in Idaho. 

Current law allows each aging contractor to take up to 13.5 percent for administration. This is duplication. If administration were 

streamlined, more funds would be available for services. 

Additionally, within the current system, several Title V operators 

often cover the same geographic area, another example of duplication. 

With reauthorization of the Older Americans Act coming up in 

2005, now is the time to prepare for legislative change. Our recommendation is to move 100 percent of the State’s allocation, including the procurement function, to the State Unit on Aging. Invite all national aging contractors, all qualified private and public 

entities to submit applications. In other words, competitive procurement at the State level. May the best possible service providers 

win. 

Procurement policy could also specify one program operator per 

area to eliminate the current program duplicity. This approach also 

ensures close coordination with the workforce system within each 

State. 

Also, the Older Americans Act now requires each Governor to 

prepare a State Senior Employment Services Coordination Plan 

and what is termed an Equitable Distribution Plan to distribute 

Title V funds based on where low income seniors reside within the 

State. However, States currently have no real enforcement authority over the national aging contractors that operate within our 

States. Such a change could correct these structural inconsistencies. 

54

It is important though to note that the fear in moving the procurement function to the State is that the Title V program could 

be dissolved into the larger Workforce Investment Act system 

which would create an irreplaceable vacuum. It is essential that 

the dual purposes of Title V, economic self-sufficiency and community service, remain unchanged. 

Title V provides much needed community support. During this 

past year, in Idaho alone, seniors completed 60,000 hours of public 

service. Thirty-seven thousand of these hours supported general 

community activities in libraries, schools, parks, city offices. The 

other 23,000 helped Idaho’s elderly, cooking and delivering meals 

to the homebound, providing support to local aging programs. 

In these difficult times, our communities and our aging service 

networks cannot afford to lose the Title V program. Placing procurement and administration responsibility with the State Unit on 

Aging would ensure continuity. 

In closing, unless changes are made, employment programs—as 

this headline from the August 20th Wall Street Journal so aptly 

puts it—will leave older workers in the lurch. 

Thank you. [Applause.] 

[The prepared statement of Ms. Adams follows:]

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Ms. BOVBJERG. Thank you everyone. 

I thought you all had really different perspectives on this overriding issue and I was interested that you talked about attitudes 

and training, and your support for workers, incentives, how different levels of Government are working together, and how different parts of the same Government are working together. 

I found myself getting a little bit discouraged because there are 

so many ways to think about this. I was thinking about how we 

really want to create incentives and opportunities and support for 

older people who can work to work. You also want to make sure 

that employers are ready for that. 

I was trying to think of the one question that can bring all of you 

into it. 

What are the kinds of things you can do? I think Leora would 

say the first thing you should do is just get rid of the earnings test. 

But then I am thinking well, maybe it is more direct to think about 

what you do with the early retirement age? Because the modal retirement age is 62 and is highly influenced by Social Security rules 

and policies. 

Or how do you work with employers? I was interested in your 

survey on attitudes because I think we have looked at employer 

surveys and things they say they are doing with older workers and 

phased retirement. But then we go out there and look at what they 

are doing and there is a real disconnect between what is actually 

happening and what people are saying they think about this. 

So I am winding up to the big question. I wanted to ask each of 

you, now that you have each heard each other, do you have a different take on how you would create these kinds of incentives and 

supports? There were, I thought, some very specific suggestions 

and recommendations that came from your papers. I just wonder 

if you have reactions to each other? 

I can start down at that end. 

Ms. COHEN. One of the issues that I think became clear, which 

I did not address to a great extent, is the whole issue of compliance. Within the human resource management profession, we are 

very compliance oriented. We talk about discrimination and we talk 

about protecting workers and so forth. 

With the issue of older workers, one of the things that I noticed 

in our survey, we did a few open-ended questions. One of the 

things that came back to us is we do not target people for age. We 

hire for the people who have the best qualifications for the job, regardless of age, race, gender and so forth. 

So I think we have a double-edged sword here in that on the one 

hand, we want organizations to be compliance-oriented and they 

need to be compliance-oriented. On the other hand, we have a concept here of gosh, we are going to have a labor shortage and we 

need to be able to somehow incentivize people to want to remain 

in the workforce. For the organization to be able to provide training 

and benefits and other things to encourage these folks into the 

workforce. 

So you need to look for people who are qualified for the jobs, 

which I think everyone would agree that older workers certainly 

can be qualified for a wide variety of jobs, having been in the workforce for a number of years in a variety of capacities. 

60

So it is a balancing act between the compliance that we are discussing, as well as perceptions and just day-to-day interventions. 

Ms. BOVBJERG. Craig. 

Mr. SPIEZLE. One of the things that was interesting, I think each 

one of us mentioned training and skills throughout as a common 

theme. One of my beliefs is that the definition of literacy to be employable clearly today is beyond reading, writing and arithmetic. It 

is technology literacy. What we believe is technology literacy today, 

in 5 years and 10 years, will also be out of date. 

So we have to constantly be looking at that. That is just one 

point. 

The other challenge, as I talk to businesses, is that they are still 

in the recession. They are still having some tough times. They have 

a hard time making these other investments, where they have to 

go week-to-week or month-to-month. So while we are out there advocating this sea change of demographic shifts, they are focused on 

the here and now. So we need to look at those incentives. 

The last point I want to just reiterate is being proactive. Companies will tell you training is provided for older workers at their 

companies, but they do not sign up for it, they do not take it. Sometimes they are not encouraged. So we need to be creative on how 

we can be more proactive and encouraging to the older workers, 

specifically in the area of workplace assessments. An older worker 

is not going to stand up and complain that they have a hard time 

using a computer, due to the fear of being viewed negatively, on 

that productivity or for fear of being discriminated against. 

So we need to think about how to step over that line and be 

proactive in helping versus the contrary that is occurring today. 

Ms. FRIEDBERG. Economists like to say things like if there is demand for something then the market will provided it, or it is going 

to happen, or it will work itself out. 

But the fact that we see, for example, the misinterpretation of 

the earnings test rules, and that we see employees say things like, 

I would keep working if I had more flexible hours, and employers 

do not always provide those conditions sometimes that employees 

want makes me think there is a role for providing information. 

Craig was saying that this is the information age. There is a risk 

that you flood people with too much information. But I think if we, 

for example, did more to tell workers about how Social Security 

worked, then there is some chance that they are going to change 

their views not just about the earnings test but about the whole 

course of their retirement. 

One step has been taken by the Social Security Administration 

in recent years to send out benefit statements that we are all now 

getting once a year. The statements say this is what your Social 

Security benefit would be when you retire. 

I think it would be interesting to actually follow up and try to 

evaluate what impact that has on people. Do they read those statements? Do they know what it means? Do they learn that oh, maybe 

I will not be getting as much from Social Security as I expected? 

So I think there might be a role there for the Government, which 

is operating this huge program, to try to do more to get people to 

understand how it works. 

61

On the private sector side, I was interested in Deb’s survey work 

where they are looking at human resource managers and they are 

talking to older workers. I think there could be a role there for an 

increasing effort to try to understand what would keep older workers in the workplace, and whether it is more flexibility with hours 

and more flexibility with benefits. For example, many defined benefit pensions discourage people from working part-time near the 

end of their career because that is going to reduce their benefits. 

So if there is some focus on specific concerns that may be remedied without too much difficulty, then I think there might be some 

progress. I think, to some extent, the market might take care of it. 

As older workers increase their interest in staying in the workforce, just as women of childbearing age like myself have, and 

there have been more arrangements made for maternity leave over 

time and flexible hours for mothers, then there might also be some 

change driven by the demands of older workers. 

I would be interested to hear whether Deb or someone else 

thinks that is possible. 

Ms. ADAMS. I would add that one of the key challenges is education at varying levels. On the Federal legislation level, I think it 

is incumbent upon us to advocate, to educate decisionmakers about 

the impact of employment and training legislation on the older 

workforce. It is critical. 

I do not think that decisionmakers, policymakers understand 

how important it is to effect legislative change, to turn around the 

trends that we are now seeing. 

Also, it is critical to educate employers and employees alike 

about the importance of training to workplace productivity. If employers understood the difference it could make in their bottom 

line, they would be placing much more emphasis on ongoing technology training. 

I also think that those of us in the workplace as employees need 

to better understand that it is also our responsibility. We need to 

take it upon ourselves to keep ourselves up-to-date and current. 

Those are a few of the key challenges I would add. 

Ms. BOVBJERG. I appreciate that. I think that we too have been 

thinking, when we did our first report at GAO on older workers, 

it was very descriptive, talking about who older workers are, what 

industries they work in, what older workers might look like in the 

future, what kinds of interactions were occurring with employers. 

That was where we discovered that the surveys did not tell us 

what was going on on the ground. It is not a lot. 

Part of it is the pension rules that you mentioned. We said at the 

end of our report that we thought that in some ways this would 

be market-driven and that a little further down the road that employers in particular would pay more attention to helping workers 

defer fuel retirement. 

But in listening to the panel, I was starting to think maybe you 

have to help employers think that far out. They are probably not 

going to. We have to be prepared more. 

One of the things that we found in some of our work in other 

countries, is you really have to think of these things comprehensively. You have to think of the public pension system and Social 

Security, the private pension system, and how they interact. So you 

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are not doing something on the public side while there is a mandatory retirement age in the private sector side. At the same time you 

are looking at education and training, because we have seen some 

real disconnects there. 

Joel Reaser, of the National Older Worker Career Center has 

asked about cost. It says that one barrier to employment of older 

workers is the perceived increased cost. What studies are there to 

compare the true relative cost of older workers versus younger cohorts? For example, increased health care cost versus low turnover 

costs. Increased training costs versus the value of mentoring. 

Ms. COHEN. I am not aware of many specific studies. I know 

there has been anecdotal evidence and there has been a lot of discussions. In fact, Larry Anderson from the National Older Worker 

Career Center and I had a conversation just before the start of the 

session today about that. 

I think there needs to be more research on this, because one of 

the things—we did an older workers study 5 years ago. Basically, 

the study was all about the myths surrounding it. I think that is 

what the issue is here right now. 

There is a lot of myths of what does it cost in terms of health 

care? It may well be that, in fact, health care is as expensive if not 

more expensive for women who are in childbearing age than older 

workers. Or for people who have infants, for example, or small children who take them to the doctors regularly versus older workers 

or older individuals. 

So there are a lot of cost factors. The training issue that we 

talked about also here. How much does it cost to train workers? 

There are so many issues involved here, in terms of retention of information, use of information on the job. Transfer of that training. 

You mentioned, Leora, I believe, about reluctance of organizations to invest in that sort of thing. Organizations that have high 

turnover of any workers, lower-level workers, upper-level workers, 

younger, older, may be reluctant to offer that training. On the 

other hand, if it is seen as an investment. 

So I think more studies need to be done to really look at some 

of these specific cost issues. It is an excellent point. Some have 

been done but a lot more needs to be done. 

Ms. BOVBJERG. The same questioner asks about adaptation to 

technology and suggests there is evidence that educational level, 

not age, is actually the predictor. What is the implication for the 

need to change employer perceptions and training programs? 

Mr. SPIEZLE. I am not 100 percent sure of the question there, 

Joel, but I will try to answer that. I think it kind of ties to your 

first question. 

There is not an added cost really for the training of the older 

worker in technology, it is just making it available. Quite often it 

is a limited budget. What we see is that the younger workers are 

the ones who sign up and are encouraged to do so. It is kind of investing in the youth perspective. 

From the technology perspective, in many cases, it is not a cost. 

It is really that the personalization and customization, the features 

are within the equipment they own today. But if you have some vision problems and mobility problems, you are not going to be able 

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to navigate through all the windows and all the menus to find it 

in the first place. 

So the cost there is being proactive. Not unlike making sure 

someone has their correct chair for their environment and the 

lighting is correct in their office, you need to take that step and 

customize their workplace to computing equipment. 

So I see some of that happening. Part of it is regulation and fear, 

because of ergonomics, people are thinking about that. But we need 

to go a step further and look at the total ecosystem of the work environment. 

Ms. BOVBJERG. When I read your paper, I thought some about 

Social Security and their disability programs and some of the assistive technology that they are beginning to look at as part of the 

Ticket To Work Program. 

Mr. SPIEZLE. I will comment on that for second. There is a fine 

line between the physiological aspects of aging and disabilities. 

Clearly, I am not here to say that older workers are disabled. But 

there are issues that we deal with. 

The incidence of color blindness increase. The mobility, the ability, the dexterity. But fortunately, in the area of disabilities, a lot 

of it is because of regulation, Section 508 says requiring corporations and companies to have products that are usable for people 

with disabilities, part of the ADA and such. 

I am not sure that is the right answer, more regulation, but you 

do see a lot of commitment, and a lot of corporations have done a 

lot in the area of assistive technology for those with disabilities. 

But that is because of fear of suits and for regulation. 

Ms. ADAMS. I might add a slightly different perspective. I think 

if you asked our front line older worker staff, you would find that 

most of them subscribe to the adult learning theory, that older 

workers can learn, have the capacity to learn, as much as 

youngers. It is just that their learning styles are different. The 

challenge then becomes to tailor the learning to the older worker. 

There is very little if no additional cost incurred by doing so. 

That is just one approach that we are taking in our State and 

it appears to be very workable. 

Ms. BOVBJERG. While you have the floor, someone asked to what 

do you attribute Idaho’s success in their older worker program and 

can it be replicated in other States? 

Ms. ADAMS. I think our success, in large part, is coupling occupational skill training with work experience. The population that we 

serve are primarily low income women. Many have spent most of 

their lives raising children and find themselves in a position where 

they have to go to work but the skill gap is huge. They have no 

recent work experience. 

For that group, getting them the skill training they need and 

then allowing them to practice that in a job setting through the 

Senior Community Service Employment Program or work experience options available through the Workforce Investment Act or internships. That hands-on practice, coupled with technology training 

and peer support, seems to be what makes the critical difference 

in getting seniors off the program and into jobs that, hopefully, 

have opportunity, and decent wages and some good fringe benefits 

attached. 

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Ms. BOVBJERG. While we are talking about specifics, there is a 

question for Deb on the specific strategies that employers are using 

or that they anticipate using for extending people’s work lives, that 

is, by encouraging people who would otherwise retire to defer retirement or phaseout of work gradually. Did you run across that? 

Ms. COHEN. Yes. In fact, we did ask a question in the survey 

about strategies for employees who might want to work past traditional retirement. In fact, what we did is we presented six potential 

strategies and asked whether or not organizations were currently 

using them, anticipating using them, not using them at all, or not 

at all sure. 

The six strategies were encouraging employees to work best traditional retirement. Establishing alternative career tracks for older 

workers. Hiring retired workers as consultants or temporary workers back into the organization. A fourth strategy, instituting a 

phased retirement program. For example, enabling workers to ease 

into retirement by reducing perhaps their work schedule. A fifth 

strategy was providing opportunities for workers to transfer to jobs 

with reduced pay and responsibilities. Then finally, providing 

training to update skills of older workers. So six distinct strategies. 

What we found is that the majority of the respondents indicated 

that they were either not using those strategies or were not sure 

whether they were using those strategies, which is again not such 

great news. 

The one that was, in fact, used the most was hiring retired employees as consultants or as temporary workers which is, again, 

something that we have seen a lot of evidence of. But 39 percent 

of the respondents said that they were currently doing that. Fourteen percent anticipating doing that. 

The next highest one on the list was encouraging employees to 

work past traditional, but only about a quarter of the respondents 

said that. Similar to training, only about a quarter of the respondents said that they were providing training to update the skills of 

older workers. 

So these were the six different strategies. But on the training 

point, I might add just as a comment to follow-up here, one of the 

things that we find with training is that it tends to be cut in organizations when they are having economic difficulties. So training is 

something that is not—we are talking about customizing perhaps 

training for older workers, which we know can work as far as 

adapted to learning styles and so forth. 

But the problem with that is that it is not always realistic because customizing training for any worker, whether it is a low income worker, whether it is an older worker, or an entry-level worker, is expensive. Organizations do invest in training, but to invest 

those dollars specifically is very difficult. 

Ms. BOVBJERG. I have a question for Craig, a very similar one, 

which is what can employers do? What is realistic to expect? 

Mr. SPIEZLE. A few perspectives on the training. I do agree to a 

certain extent it can depend upon the demographic being served. 

There is a different aspect in need from the style and focus of your 

training methodology. 

Just an aside, some work that I have done with the American 

Association of Community Colleges to focus their career training 

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for the older worker. It was a shift. In the past they had their adult 

or senior training, which are often non-credit free classes and 

structures for volunteers, to shift their curriculum into the mainstream but focused on you had to be 50 and above or such. 

So by reducing the intimidation factor was one of the things that 

we found in some studies was one of the big obstacles of a 50-yearold of versus being with a 20-year-old. 

Also taking the curriculum and focusing it on workplace environment issues. 

So that is just one thing. I do agree with you, at the end of the 

day it is a limited budget and the first thing to be cut. 

But areas of what an employer can do, I mentioned before the 

workplace assessment aspect, to customize it. 

There is also some things called healthy computing which I mentioned briefly. But basically training all employees on proper 

ergonomics, taking breaks. There is something known as the 20/20 

test, which is every 20 minutes take a 20 second stretch. Focus 

your eyes on a subject 20 feet away. So again, reducing the eye fatigue or the muscle fatigue really goes a long way. It does not cost 

anything. So there are some simple things that can be done there. 

The aging eye. At the age of 40 the tear ducts are not as productive. So you need to take wetting drops. Some simple things, that 

do not cost anything. 

So simple steps that actually all employees would benefit by. 

Ms. BOVBJERG. We are getting close to needing to close out but 

we have a couple of questions here on the earnings test. I wanted 

to ask you, Leora, what do you really see we should be thinking 

about in regard to encouraging people to work longer in the context 

of the Social Security system? 

I am asking this because I think about the combined impact of 

normal retirement age, early retirement age, earnings test, COLA 

issues, Social Security reform, and disability all balled up. 

So I just wonder if you have done work in the areas outside of 

the earnings test, if you had some thoughts on those areas? 

Ms. FRIEDBERG. I think a lot of research suggests that, as you 

said earlier Barbara, the early retirement age has a big effect, 

being eligible for Social Security at age 62. There is some research 

suggesting that—I alluded to this earlier—that maybe too many 

people claim benefits at age 62, given the generous rate of return 

you get for delaying. 

So maybe something, as I have said, as simple as providing some 

information about what your benefits would be at each age would 

help. 

But in the long run I think that we may need to raise the early 

retirement age. Even, as was started in 2000, raising the full retirement age, which is implicitly reducing benefits at age 62 at the 

early retirement age, may not have as big an effect as just changing that age itself. 

Ms. BOVBJERG. So it is more the stick than the carrot, unfortunately. We have talked a lot about carrots today. 

Ms. FRIEDBERG. Yes. 

Ms. BOVBJERG. There was a question here, before we wind up, 

about the implications of escalating health insurance cost and the 

elimination of retiree health benefits, speaking of the stick. What 

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do you see there? On the employer’s side, on the worker’s side, for 

older workers? 

Ms. FRIEDBERG. It seems like a huge issue. Health care costs are 

growing, technologies keep improving. There is more and more we 

can do to make people healthier and those things cost money. 

I foresee that probably more and more companies will drop retiree health benefits. Perhaps the only reason to have them is to 

ensure loyalty. But given that Medicare will cover many of those 

costs for people aged 65 and older, the retiree benefit dollar itself 

could probably be spent better by companies elsewhere. So that can 

also affect the cost of Medicare in the long run. 

But maybe that is going to be one of the carrots that is going to 

get people also to work longer, the fact that they are going to get 

better health insurance from their employers. That is an issue that 

we do not have a lot of evidence about yet. 

Ms. BOVBJERG. Any last licks any of you would like to get in before we close out? 

Just a little commercial for something that we recommended a 

few years ago at GAO. We suggested taking a comprehensive approach to helping people extend their working lifetimes. Either we 

have seen it in places where it is occurring or where it should be 

occurring, and we have certainly seen in our own disparate pension 

and Social Security rules and Workforce Investment Act approaches. We have not approached this as comprehensively as we 

probably should. 

So GAO recommended that to the Department of Labor convene 

a task force beyond the Department of Labor, that pulls in the Federal agencies that deal with some of these other issues, and their 

partners at the State and local level as well. 

We are still hopeful on that. Hearing what you have to say really 

raises the point that there is a range of things that need to be considered, and I think it just makes a comprehensive approach all the 

more important. 

I wanted to thank you all for coming. I want to thank the Senate 

Aging Committee for having this forum. I hope this is the first of 

many in the future on this issue because I think there is still much 

to be said. 

Thank you all for participating. [Applause.] 

[Whereupon, at 4:10 p.m., the forum was concluded.]

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