[Senate Hearing 108-230]
[From the U.S. Government Publishing Office]



                                                        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







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                       SPECIAL COMMITTEE ON AGING

                      LARRY CRAIG, Idaho, Chairman
RICHARD SHELBY, Alabama              JOHN B. BREAUX, Louisiana, Ranking 
SUSAN COLLINS, Maine                     Member
MIKE ENZI, Wyoming                   HARRY REID, Nevada
GORDON SMITH, Oregon                 HERB KOHL, Wisconsin
JAMES M. TALENT, Missouri            JAMES M. JEFFORDS, Vermont
PETER G. FITZGERALD, Illinois        RUSSELL D. FEINGOLD, Wisconsin
ORRIN G. HATCH, Utah                 RON WYDEN, Oregon
ELIZABETH DOLE, North Carolina       BLANCHE L. LINCOLN, Arkansas
TED STEVENS, Alaska                  EVAN BAYH, Indiana
RICK SANTORUM, Pennsylvania          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)

  













    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 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 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.

  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.
    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 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 day-to-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.
    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.
    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.
    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 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:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    
    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 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 compensate for erratic motion, slow 
response time, and other conditions. 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. Focusing 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 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.
    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 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 
part-time 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 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 it assured service as well as 
providing funds to purchase the skill training that older 
people need. It also was an excellent complement 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.
    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.
    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.
    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 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 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.
    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 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-year-old 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 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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