[Senate Hearing 108-746]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-746

                      BREAKING THE SILVER CEILING:
                  A NEW GENERATION OF OLDER AMERICANS
               REDEFINING THE NEW RULES OF THE WORKPLACE

=======================================================================

                                HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                           SEPTEMBER 20, 2004

                               __________

                           Serial No. 108-43

         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 John Breaux.........................     1
Statement of Senator Larry E. Craig..............................     3
Statement of Senator Orrin Hatch.................................     8

                                Panel I

Hon. John Glenn, Former U.S. Senator, The John Glenn Institute, 
  Columbus, OH...................................................     6
Jack Valenti, former president, Motion Picture Association of 
  America, Washington, DC........................................    10

                                Panel II

Ken Dychtwald, president and chief executive officer, Age Wave, 
  San Francisco, CA..............................................    16
Sharon A. Brangman, M.D., professor of medicine and division 
  chief, Geriatric Medicine, SUNY Upstate Medical University, 
  Syracuse, NY, on behalf of the American Geriatrics Society.....    40
Douglas C. Holbrook, vice president/secretary-treasurer, American 
  Association of Retired Persons, Washington, DC.................    47
Victoria Humphrey, executive direction of Human Resources, 
  Volkswagen of America, Inc. and Volkswagen Canada, Inc., Auburn 
  Hills, MI......................................................    76
Edward E. Potter, president, Employment Policy Foundation, 
  Washington, DC.................................................    81

                                APPENDIX

Statement of Emily DeRocco, Assistant Secretary of Labor, 
  Employment and Training Administration.........................   109

                                 (iii)

  

 
   BREAKING THE SILVER CEILING: A NEW GENERATION OF OLDER AMERICANS 
               REDEFINING THE NEW RULES OF THE WORKPLACE

                              ----------                              --



                       MONDAY, SEPTEMBER 20, 2004

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The committee convened, pursuant to notice, at 2 p.m., in 
room SD-628, Dirksen Senate Office Building, Hon. Larry Craig 
(chairman of the committee) presiding.
    Present: Senators Craig, Breaux, Hatch, and Kohl.

    OPENING STATEMENT OF SENATOR JOHN BREAUX, RANKING MEMBER

    Senator Breaux [presiding]. The committee will please come 
to order. Good afternoon, everyone, and welcome to this hearing 
of the Senate Special Committee on Aging. We are glad we have 
so many guests for this very important hearing this afternoon.
    We are here to talk about how older Americans are breaking 
the silver ceiling in our nation's workplace. Since 1985, there 
has been an upturn in the number of older Americans who are 
choosing to work past the age of 65. These people are better 
educated, they are healthier, they are living longer than 
previous generations. They aren't ready to sit in a rocking 
chair just because they happen to be 62 or 65 years of age.
    However, over the past 50 years, both corporate and Federal 
policies have encouraged workers to leave the workforce as 
early as possible. Social Security benefits allow people to 
retire as early as 62, with normal retirement age currently at 
65. Today, 75 percent of Americans apply for Social Security 
benefits at age 62. Companies built their pension plans to 
favor early retirements and to encourage the hiring of younger 
workers. I say that it is time to reevaluate these outdated 
policies because they do not reflect modern society.
    We have millions of talented, healthy, and energetic older 
Americans who want to keep on working, and it is a good thing 
that our older Americans want to work because there is a labor 
shortage looming in our country. As baby boomers reach 
retirement age in a few years, the economy will start to 
experience negative effects of mass retirements. There will be 
fewer younger workers to fill the mass vacancies of the older, 
experienced workers.
    The rate of workforce growth peaked in the 1970's at nearly 
30 percent. However, it is now at 12 percent and expected to 
drop to less than one-fourth of 1 percent by the year 2020. 
Even if we increase immigration significantly, we would still 
need millions of older workers to remain in the workforce.
    Right now, this is still what I would call a sleeper issue 
and much of corporate America has not recognized the need to 
retain and recruit older workers. Some companies have, and they 
are listed in AARP's list of top employers for workers over the 
age of 50. Many older workers want to work part-time or on and 
off throughout a particular year. They want to telecommute. 
They want to continue to provide services where they can, even 
on a part-time basis. Benefits like retraining, elder care 
locator services, and time off to care for relatives are 
important to them.
    Phased retirement is a concept that sounds appealing to 
most workers, but as we will hear today at this hearing, it is 
still more of a concept than a reality due to Federal 
obstacles.
    I strongly believe that it is time our country's labor and 
pension policies reflect the new health and dynamism of older 
Americans. Let us break down these barriers and move past 
ageist stereotypes to allow more Americans to achieve their 
potential no matter what age.
    I would point out that as I look forward to changing 
careers, as opposed to retirement in my own profession, this is 
an area that I become more and more interested in each day. 
Indeed, I am very typical, I think, of millions of Americans as 
they look to new and different careers and they do not want to 
just sit on the porch and rock. They want to be involved, and 
we need their services and we, as a government, need to make 
sure that there are not governmental and legislative 
impediments toward them being able to look at new and exciting 
second, third, and even fourth careers in their lives. They 
have very valuable services that they can offer to our country.
    With that, I would like to recognize Senator Craig. We 
share duties. He has been very kind. This is the only 
committee, I think, in the entire U.S. Senate where we actually 
both serve as chairman, depending on the hearing, and Chairman 
Craig has been very, very generous in that because he agrees 
with me that this question of aging is neither Republican nor 
Democrat. We age equally, and this committee has been run in 
that fashion and I thank him for that. Senator Craig.

       OPENING STATEMENT OF SENATOR LARRY CRAIG, CHAIRMAN

    The Chairman. John, thank you very much. For those of you 
who were confused for a moment, please don't be. John has just 
explained the method by which we operate the Special Committee 
on Aging. We tradeoff depending on issues that we are 
individually or collectively interested in as to who is 
chairing the hearing, because as John has pointed out, I am 
much younger than he---- [Laughter.]
    But I would never challenge him in a game of tennis. 
[Laughter.]
    But I am going to add my comments to the hearing for the 
record, Mr. Chairman, and why I have asked for the microphone 
is to say something about a fellow legislator who has spent a 
good deal of his time serving us and serving the country, and I 
am talking about my colleague, John Breaux.
    The valuable contribution that he has rendered for the good 
citizens of Louisiana, but as importantly for the country, is 
testimony to a great leader and one that I view as John Breaux, 
the senior Senator from the State of Louisiana.
    It is even more unfortunate that the English language is 
always found wanting when one desires, I think, to give a 
proper tribute. However, I hope that you will accept these 
words of recognition, John.
    John Breaux, you are Louisiana's, I think it is pronounced 
``lagniappe.'' That is Cajun for gift to the country in general 
and to the Senate in particular. Your reputation for honesty 
and political integrity and hard work were matched in your 
stellar 32 years of service here in Congress only by your 
renowned political acumen, keen legislative judgment, and good 
and sincere heart for all our nation's citizens.
    It has been my pleasure to serve with you such as you have 
demonstrated here today that we found ourselves very willing to 
work together and to share the responsibilities of this 
committee.
    We share in common the first humble legislative beginnings 
in the House. While we were in the House, recognizing its 
importance, for some reason, we aspired to the Senate. In that 
time, I had the opportunity to watch John's leadership. I was 
in the minority and I recognized his talent then, and, of 
course, in the Senate he has continued to serve this country 
extremely well.
    While your retirement from service in the Senate I think is 
a sad note, I think we are all happy for you and wish you 
success in a new and challenging life. We are going to hear 
from some folks today who have retired more than once in life, 
only to go on to greater careers and greater achievements for 
themselves and for mankind, and I think that, John, you have 
that in your future.
    So while you will continue to contribute and while I want 
to assure you that you leave behind respect and admiration and 
a deep gratitude from all of our colleagues and our staffs and 
our friends here in the U.S. Senate, your work has been 
exemplatory and we appreciate it all a great deal.
    Now, he reached over and took the gavel away from me today 
and I don't want him to go wanting for a gavel. So what I have 
done, or more importantly, what I should say, the staff, the 
joint staff of the committee has done is made sure that John 
Breaux doesn't want for a gavel in a future life.
    Senator John Breaux, Special Committee on Aging, 1985 
through the year 2000, John. Here you are. Let me put this in 
right so we can grab a picture of it. Here you go.
    Senator Breaux. Thank you, Larry.
    The Chairman. Absolutely. [Applause.]
    Now I will get out of the way and let him chair the 
committee.
    Senator Breaux. I will give you the old one back.
    The Chairman. I got my gavel back! [Laughter.]
    All right. That one is not to be dented. Here. You had 
better use this one. This may be a raucous hearing today.
    Anyway, Mr. Chairman, thank you very much, and I will yield 
back the balance of my time and ask my full comments be a part 
of the committee record.
    [The prepared statement of the Chairman follows:]

               Prepared Statement of Senator Larry Craig

    Good Morning. All too often we come together to discuss a 
multitude of problems affecting senior Americans. On this 
Committee we get heavily involved in such weighty questions as 
the cost and benefits of medicare, health care in general and 
nursing home care in particular and concerns with social 
security. We are, because of our mission, often times consumed 
by the study of these problems and overlook the invaluable 
contributions seniors give to our country.
    Senior citizens seek to live comfortably in their advancing 
years as well as meet the rising financial costs associated 
with medical care and everyday living expenses. As our 
population ages we are seeing trends where people in their 
senior years yearn to continue participation in our country's 
vibrant economy so as to meet their needs. Therefore, we need 
to focus our attention on these trends and to study the value 
of the contributions made by seniors in our workforce. I 
commend Senator Breaux and his staff for what they place on our 
oversight table today for public consideration.
    I want to thank all of our witnesses for being here today. 
This a most important inquiry and I look forward to hearing 
your testimony.

    Senator Breaux. Thank you so very much. I really do 
appreciate it. It was a surprise. I am delighted. It will be 
something that will always be a reminder to me of the work that 
we did on this committee together. If other committees had the 
opportunity to have that same type of rapport, I think the 
Congress would indeed be a much better place. So I thank you 
for your cooperation and your friendship.
    We are very delighted to be able to welcome this afternoon 
two outstanding and very distinguished Americans to be our 
first two witnesses this afternoon. The first is our former 
colleague and dear friend, John Glenn. I note that Annie, his 
wife, is in the audience. Annie, we are delighted to have you 
with us, as well. I understand Annie's sister is also here, so 
we are delighted to have both of you as well as to have John.
    Everyone knows that--all of us in this Congress, and indeed 
this country, know that John Glenn is truly a national hero, a 
person who has served his country and continues to do so, a 
military Marine, an astronaut, United States Senator, and now 
continues his work of public service as a public service 
advocate and so well respected.
    He came to the U.S. Senate from Ohio in 1974. He served 
here for 24 years and did something extraordinary and so 
unusual when he volunteered and went back into space at the 
tender age of 77 something that men half his age did not have 
the capacity to do. That was a 9-day Discovery shuttle mission 
where he worked just as hard as any other astronaut and made 
great contributions on that very important mission. But as 
important as the science was on the mission itself, it sent a 
signal to the people of this country that we are still capable 
of performing outstanding duties at whatever age you happen to 
be.
    It is interesting that Senator Glenn was talking with 
Elaine on our staff, who had worked with him and now works with 
us on the committee. John Glenn served on this committee, on 
the Aging Committee, and very important service it was, as 
well.
    He is now an advocate for public service and public policy 
through his platform at Ohio State University, where he 
presides over the John Glenn Institute. It is indeed a pleasure 
for this committee to welcome you, John. Please come up and 
take your place at the witness table.
    I would like to, at the same time, present another 
legendary figure in our nation, a man who has also led several 
different lives, and each one of them has been more remarkable 
than the previous one, and that is Jack Valenti. Jack served as 
a World War II bomber pilot with great distinction. He has had 
his own advertising agency, which he founded. He was an 
outstanding political consultant. He has been a special White 
House Assistant to President Lyndon Johnson, of which he truly 
is a legendary expert in that administration and the things 
that President Johnson did.
    He is also an outstanding leader in one of the most 
important industries in our country, and that is the motion 
picture industry, where he has led that industry with great 
distinction around the world, and particularly here in the 
Congress. He held that post for 38 years until recently, but he 
still remains chairman and chief executive officer of the 
Motion Picture Ratings Association, which he started, and still 
is so very important.
    Most recently, I noted that Jack was in Paris where the 
French government conferred upon him the very highly prized 
honor of the French Legion of Honor Award.
    In addition, he is also president now of the Friends of the 
Global Fight for AIDS, Tuberculosis, and Malaria, and he has 
also been awarded something that is very unique and very 
special, his own star on the Hollywood Walk of Fame, something 
a lot of us wish we could do, but it is not in the cards. 
[Laughter.]
    Senator Breaux. We welcome both of these gentlemen, and 
Jack, if you would come up to the table.
    I really just ask both of them, because they sort of 
epitomize what we are talking about, how you can have a second 
career, how you can have a third or even fourth career, and how 
you can still be a very valuable contributor to society that 
people can learn from. There are no finer two witnesses than 
both John Glenn and Jack Valenti.
    John, Senator, if you would like to go ahead and get 
started.

  STATEMENT OF HON. JOHN GLENN, FORMER U.S. SENATOR, THE JOHN 
                 GLENN INSTITUTE, COLUMBUS, OH

    Senator Glenn. Thank you, John, very much. Thank you, and 
let me add my congratulations to you, too, for the long service 
on this committee. I know how you feel because I was on this 
committee for 24 years. I requested it throughout my whole 
Senate career. I asked to go on the committee when I came here, 
requested it because of problems I had seen in my own 
background, my parents and some of the difficulties when they 
were elderly and had cancer and some things like that. So I 
asked to go on this committee because I wanted to get into some 
of those matters and I was on the committee for 22 years.
    Elaine, you already pointed out back here--hold up your 
hand. That is Elaine Dalpiaz, who started out on my staff and 
is now with your committee full time. Diane Lifsey, back over 
here, Diane was my staff member on this committee for 22 years, 
so she has been on this subject for a long time and is still 
working in this particular field in the private sector now.
    She reminded me that the Senate Special Committee on Aging 
has a long history of looking at older worker issues, because 
over 20 years ago, we held a series of hearings called ``Work 
After 65: Options for the 80's.'' As part of this series, I 
chaired a hearing on April 30, 1980, that was titled, ``How Old 
is Old? The Effects of Aging on Learning and Working.'' So 
maybe the farther we go, the more things stay the same.
    It is time, though, we did something about older workers. 
We have been into this issue for a long, long time. As part of 
that series, I chaired that particular hearing, and Dr. Robert 
Butler, who was then the head of the National Institute of 
Aging--he was the founding Director of the National Institute 
of Aging, part of NIH--and other witnesses discussed ways to 
gain a better knowledge of older persons' capabilities so they 
would be encouraged to participate and contribute in meaningful 
ways.
    I will quote one of my own comments from that hearing.

        It said, ``With our unemployment statistics as high as they are 
        today, it is hard to imagine the time when our society will 
        depend more on older workers, but we will. As the birth rate 
        declines and the aging segment of our population increases, our 
        workforce will depend more and more on older workers for 
        reinforcement.''

    That was from 1980, in those hearings a long time ago, and 
we are still here and I think it has become more urgent than 
ever that we now do something about this and recognize the 
situation we are in.
    I was asked by the letter I received from the committee to 
specifically comment on a couple of things about my experiences 
as a Senator and running for President past the age of 65, the 
Space Shuttle Discovery mission and that experience. That can 
get into so much detail, I think rather than try and use up my 
allotted 5 or 6 minutes we can get to that in the questions.
    I would just say I wanted to put to lie, though, some of 
the rumors that went around after my last space flight in 1998. 
I was 77 at the time of that flight, and I wanted to make sure 
everyone understood that it was not true that NASA would not 
let me go out on the spacewalk because they were afraid at my 
age I might wander off someplace. [Laughter.]
    It also was not true--the rumor went around that time--that 
I was the oldest male to ever leave Florida in something other 
than a Winnebago, and that is not true, either. [Laughter.]
    But it was a great experience and I will just say how it 
happened. Then we can go on with Jack's statement and get onto 
whatever you want to discuss. I was preparing for some of the 
NASA debate on the Senate floor back in those years and it 
struck me that some of the things that happen to younger 
astronauts up in space are the same things that happen as part 
of the natural process of aging right here on earth.
    Your body's immune system changes, for instance. You become 
less resistant to disease and infection. Osteoporosis sets in 
up there, even with the younger astronauts. The body's ability 
to replace protein in the muscles changes dramatically, and, 
that changes here on earth just part of the routine of getting 
old.
    When astronauts come back from orbit, they recover within a 
short period of time, depending on the mission. The mission 
that we were on as part of the Discovery flight in 1998 was 9 
days, which is not one of the lengthier missions but it is long 
enough for these changes to start happening. Osteoporosis sets 
in, also, after 5 or 6 days in orbit.
    The younger astronauts recover over a period of a week or 
10 days or something like that. The objective of my going up in 
space and the purpose of it was not just to give an elderly 
Senator a ride in space, which I would have welcomed anyway, 
but to really do research in these particular areas to see what 
impact the space experience would have on somebody who had 
already experienced immune system and the protein changes and 
other changes. Would it be additive? What would be different 
about it?
    The ultimate objective was to try and find out what within 
the human body turns these systems on and off so that maybe we 
could find a clue as to why this happens and maybe increase the 
body's immune system. What would that do with regard to disease 
and age and cancer and things like that if we could find within 
the human body what turns your immune system up and down? Could 
we find something that would give us a clue as to how we could 
affect changes right here on earth and maybe make people more 
resistant to disease than we are right now. We were looking for 
the same thing with osteoporosis and protein replacement in the 
muscles and so on. That was the real reason for being up there 
on the flight.
    It was a lot of work that year. I was back and forth to 
keep up with my Senate work and to be here any time there was 
going to be a close vote in the Senate that might require my 
vote. I had made a commitment here in the Senate, of course, to 
honor that and fly back here, which I did. I didn't have to do 
it very many times. It was a long year, a very busy year, but I 
found at the age of 77 then that I could keep up with the 
younger astronauts. I wish that I had started flexibility 
training about 30 years before that because I found going 
through hatches difficult. Where they bent over and went 
through, I had to slide down on my tail end and slide through. 
It was very difficult sometimes like that, and they used to kid 
me about it some down there, too.
    But we were able to keep up all right and do all the 
experiments. On that second flight, we had some 83 different 
research projects on board in addition to the half-dozen that 
were being done on me personally. So it was a very busy time 
period and very different from the first flight back in 1962, 
our first earth orbit.
    I think that probably is a little more than my 5 minutes, 
and so I will be glad to answer any questions after Jack's 
statement.
    [The prepared statement of Senator John Glenn follows:]

                Prepared Statement of Senator John Glenn

    As part of this series, I chaired a hearing, ``How Old is 
`Old'? The Effects of Aging on Learning and Work.'' Dr. Robert 
Butler, who was then head of the National Institute on Aging, 
and other witnesses, discussed ways to gain a better knowledge 
of older persons' capabilities so that they would be encouraged 
to participate and contribute in meaningful ways.
    At the time of this hearing in April 1980, I commented, 
``With our unemployment statistics as high as they are today, 
it is hard to imagine the time when our society will depend 
more on older workers. But we will. As the birth rate declines 
and the aging segment of our population increases, our work 
force will depend more and more on older workers for 
reinforcement.''
    Now, 24 years later, we must renew our efforts to meet the 
challenges and opportunities presented by our increased 
longevity. We need the skills and expertise of older workers to 
benefit all society, including our children and grandchildren, 
as our population continues to age.
    As we are discussing today, it is important to provide 
opportunities and incentives for today's older Americans and 
the baby boomers who are nearing retirement to continue to 
work, if they choose to do so, for personal and/or economic 
reasons.
    In addition, older workers will benefit Social Security as 
they continue to contribute to the trust funds and the growth 
of our economy. The extent to which older workers chose to 
remain in the labor force could have a large impact on the 
economic projections that are made regarding Social Security's 
long-term solvency.
    That is one more reason we should be very careful about 
making changes to the current Social Security program, one of 
our country's most successful income protection programs.

    Senator Breaux. Thank you very much, Senator Glenn.
    I notice we have been joined by Senator Hatch. Orrin, do 
you have any comments now?

                STATEMENT OF SENATOR ORRIN HATCH

    Senator Hatch. Thank you, Mr. Chairman. I am so happy to 
see you in that seat, although it is for this limited time. I 
want to start off by expressing my regard for you and all the 
great work that you have done here in the U.S. Senate. It has 
been terrific. We are all going to miss you and we are going to 
wish you the very, very best. I understand this is the last 
hearing you will be chairing, and I appreciate you and Larry 
and the work that you are doing on this committee.
    I also appreciate these two wonderful men. John Glenn, no 
question about it, has been a hero to everybody in America. We 
miss you around here, John, but I know that you have gone on to 
better things.
    Jack Valenti, it doesn't get any better than Jack. I think 
the Motion Picture Association has been greatly blessed all 
these years to have you as their leader. Of course, you have 
done so many important things for many, for millions and 
millions in this world with regard to making sure that that 
organization was run properly and has very lasting value.
    Both of these wonderful men are friends of all three of us 
up here and we admire both of you very much. We admire what you 
are doing here for senior citizens and for others and we wish 
you both the best in your respective careers as you continue 
on.
    But I want to thank you, Mr. Chairman. We are going to miss 
you around here. We think the world of you and we will look 
forward to seeing you again.
    [The prepared statement of Senator Orrin G. Hatch follows:]

                  Prepared Statement of Senator Hatch

    May I start off by expressing my gratitude to Senator John 
Breaux for his invaluable contributions to this Committee, and 
for his distinguished career of 18 years in the United States 
Senate. Thank you.
    I am pleased that today's hearing will examine the issue of 
retirement against the backdrop of a tend of older Americans 
staying in the workforce past the age of 65.
    Mr. Chairman, it seems to me that the message of this 
hearing is that the aging of the Baby Boom Generation is going 
to transform retirement in America as we know it and that the 
tax, pension, and labor laws in this nation need to be examined 
and adjusted so they encourage, rather than penalize, older 
Americans to keep working if they want to.
    When Social Security was enacted in 1935, the average life 
expectancy rate was 61.7. The government set the full 
retirement age at 65. Today, even though the life expectancy is 
77.6 and expected to rise to 82.7 in 2030, Social Security 
benefits allow people to retire as early as 65. Here is the 
core of the challenge: the first wave of 77 million baby 
boomers to turn 62 will do so in just four years. In 2008, 
millions will retire and thereby worsen the American labor 
picture. There will not be nearly enough young people entering 
the workforce to make up for this exodus. As a result, 
experienced workers will be harder to come by.
    According to a recent survey from the Society for Human 
Resource Management, two-thirds of U.S. employers don't 
actively recruit older workers. Additionally, more than half do 
not actively attempt to retain key older employees. If this 
trend continues, our country will experience a severe shortage 
of talented workers in a very short time.
    Whenever a worker retires, he or she takes with them 
valuable skills, knowledge, and experience that take time and 
money to replace. In order to attract and retain these valuable 
workers, we must create a workplace culture that values their 
experience and capabilities. To help accomplish this, Congress 
must remove the obstacles that impede employers from offering 
flexible retirement packages to its employees. These obstacles 
start with pension and benefit rules but also include other 
regulations.
    I am reminded of Dr. Russell B. Clark, of Orem, UT, who at 
age 102, was America's Oldest Worker for 2003. As a retired 
physician, Dr. Clark continues to spend his time managing an 
industrial park and other real estate investments, writing his 
life history, and volunteering when needed. Now almost 104, Dr. 
Clark is the epitome of making the most out of life, and 
certainly does not allow age to determine his circumstance. 
Like millions of other older Americans who are still working, 
his knowledge and experience benefit employers, other employees 
and our entire country.
    Thank you for holding this hearing, Mr. Chairman. This is 
an important issue that merits our attention. I look forward to 
hearing from the witnesses today.

    Senator Breaux. I appreciate that very much, Senator Hatch.
    Mr. Valenti, you are on the stage.

  STATEMENT OF JACK VALENTI, FORMER PRESIDENT, MOTION PICTURE 
             ASSOCIATION OF AMERICA, WASHINGTON, DC

    Mr. Valenti. I want to thank you, Senator Hatch, for the 
kind words, and join with you, Senators Craig and Hatch, in 
complimenting Senator Breaux. I have known Senator Breaux since 
he came to the Congress as a fresh young-faced Congressman out 
of Louisiana. He has gone on to greater things. The only thing 
he hasn't done is make the Davis Cup, but he could have if he 
chose to. [Laughter.]
    I am from Texas and proud of it, and Senator Breaux is from 
Louisiana. Sometimes we think alike and our politics is pretty 
much the same, which is why I say that if I die---- [Laughter.]
    I want to be buried in Texas because I want to remain 
politically active. [Laughter.]
    These are obviously scrambling and unquiet times and there 
are a lot of issues that come before the American people and 
the Congress that are vapory and imprecise and burdened with 
uncertainty. You just don't know how to deal with them. But 
then there are some other issues where the arithmetic is 
clearly understood by everybody and we can forecast with great 
accuracy.
    That brings me to Social Security, which, of course, is the 
molecular connection to millions and millions of Americans who 
rely on it for a good life, or at least a pleasant life, and 
not a destitute one.
    But the numbers that come out lately, this committee knows 
them far greater than I. Americans are growing older. I read 
somewhere where in the next 15 to 20 to 30 years, those living 
over 100 years will rise with startling speed and they are 
going to be there quite a long time.
    What comes out of these demographics, these bleak and surly 
figures, is the fact that while there might be three Americans 
supporting one person on Social Security, in a few years, there 
will be two Americans supporting one on Social Security. Then 
after that, the outlook gets a little soggy.
    I think, as Senator Breaux said in his opening statement, 
there are many, many Americans over the age of 65 who don't 
want to retire, who find their work illuminating and good, 
although there are a lot that are probably living lives of 
quiet desperation because they don't like what they do.
    So I think that there are two big intruders in the future 
now that we have to deal with, and that is older people, their 
lack of energy, and the other one is the fact that they are 
doing something they don't like and so they are ready to 
retire. But I don't think it need be that way.
    Whenever I speak before college audiences, and I do a lot 
of that--I haven't been into Utah lately, Senator Hatch, but I 
am going to see that you fill that omission for me----
    Senator Hatch. We will take care of that.
    Mr. Valenti [continuing]. I always tell students, I am only 
going to give you one piece of advice, unlike most commencement 
speakers or older people. My advice is this. Never take a job 
just for money. Always try to strive to find a job that you 
really love to do, you have a passion for it. If it is money 
you seek, you are going to have people who will offer you 
barrels full of it, because if you love what you do, the 
chances are you will do it with such splendor that the offers 
will come and just avalanche you, and I believe that. I think 
it is so important to do what you love to do, particularly as 
you grow older.
    I have found in my own life that I find retirement a 
synonym for decay. I remember when I left the White House after 
serving 3 years as a Special Assistant to President Johnson--I 
don't recommend working for a President, only slept about 4 
hours a night. So when I left the White House, I was a physical 
mess. Lack of sleep and pressure and stress, it just fell up on 
you like jaguars springing out of a tree. I was absolutely ill-
nourished.
    I decided then that I was going to change the shape and 
form of my daily life, and the first thing I was going to do 
was to get physically fit, and I became kind of a fanatic about 
it and I got me a trainer and I started every day in a new 
religion, which means that--you go to church on Sunday. I went 
to church--I go to church every morning about a quarter to six 
in my gym or wherever I am on this racked and weary old planet. 
I stay in a hotel that has got a gym. I do 40 minutes to an 
hour every day, even though there are some days I want to say, 
``Oh, enough of this,'' and I try to push myself to extremes. I 
think if you start doing that and give yourself about 25 or 30 
years at it, it pays off.
    So I just think that it is important for people to 
understand that if you do something you like and if you stay 
physically fit so that you can go 15 hours a working day 
without collapsing, and I know that I am in far better physical 
shape now than I was 25 years ago, and as a result, I find that 
the brain can't function when it is fed by fatigue. You lose a 
sense of direction when you are tired and when you are worn.
    Now, as a result of staying physically alive, I enjoy being 
around me. I find that to be kind of a delight. I have left the 
MPAA because after 38 years, I think that--and I was just 
getting the hang of the job, I might add, too---- [Laughter.]
    But I am going on to some other careers now, and when I 
finish them, I will start another one. I think when I sit 
beside Senator Glenn, I am just awestruck. I met him first time 
when he was in the original group of the seven, wasn't it----
    Senator Glenn. Yes.
    Mr. Valenti [continuing]. Mercury astronauts. John, you 
haven't changed since then, as a matter of fact----
    Senator Glenn. You lie.
    Mr. Valenti. I think you look about the same.
    At any rate, I thank this committee because I think you are 
bringing up something that is absolutely crucial to the future 
of this country. If we don't find a way to deal with older 
workers and the pressures that are on Social Security, and 
Chairman Greenspan has outlined the bleak particulars to us 
that we need to look at and fix, and I think the Congress will 
do that. I am sure Members of Congress will perform and act 
wisely, that is, Mr. Chairman, after they have discarded all 
the other alternatives, they will do that. [Laughter.]
    So I am here to answer whatever questions you might have.
    Senator Breaux. To Senator Glenn and Jack Valenti, thank 
you so very much. I think every senior in the country this is 
being televised should have a copy of the tape of both of you, 
at your point in life, being able to talk about the future is 
so very important, because people, I think, at whatever age, as 
you said, Jack, need to be involved, need to be active, need to 
be thinking, and both of you are really credits to that 
particular philosophy.
    The thing that has concerned me is that back in 1935, 70 
years ago, when Congress passed the Social Security legislation 
for retirement purposes, Congress magically took the number 65 
as the eligibility age. Now, Congress really knew what they 
were doing, because in 1935, the average life expectancy in 
1935 was 61.7 years of age. So Congress said, when you get to 
be 65, we are going to give you a retirement check, and the 
average person only lives to be 61.7 years of age, so it wasn't 
going to cost us a lot. But guess what. Over the years, life 
expectancy now is projected to be approximately 83 years in the 
year 2030.
    So a number that Congress picked 70 years ago, 65, as being 
appropriate for retirement purposes has been carried through 
for 70 years without really a lot of updating as far as the 
concept of when I can retire. If anything, Congress makes you 
eligible for retirement now at 62.
    The problems that that presents are enormous. The 
projections are we are only going to have two working-age 
people for every person 65 or over by the year 2030. Today, we 
have seven people working for every person who is over 65. But 
as people retire earlier and earlier, there are fewer and fewer 
working to take care of more and more who are not working 
because they are retired. So it is truly a huge problem.
    John, let me just ask you one question. A lot of people 
will make the argument that you have to let them retire because 
there is danger in some of these professions and an older 
person can't keep up either mentally or physically. I know 
people, however, that are 40 and are senile, and some people 
who are both of you gentlemen's age and are alert and 
articulate and vibrant.
    So how did they check that with you when you became an 
astronaut again at 77? We were talking about pilots having to 
have mandatory retirements and police and firemen because of 
the danger of the job. I think the argument on the other side 
is, well, if they have that type of a job, let us test them and 
make sure they can handle that. How did they do that with you?
    Senator Glenn. Well, I had to pass all the tests. One of 
the things that Dan Golden, who was running NASA at that time, 
said was that if this went through--if the doctors thought this 
was a good project to run, the National Institute of Aging 
doctors as well as NASA, and then they put this out for peer 
review for over a year before that decision was made--I would 
have to pass any physical that the younger people would pass, 
and that was fine with me. They shouldn't give me any waivers 
on that, and they didn't. In fact, I had more checks that were 
done on me than the younger people normally have before they go 
up on space flight. Heart, they were particularly concerned 
about that and I had every heart check there was.
    I think the same thing, what you basically said a moment 
ago, airline pilots are required to retire at 60. I think you 
had a hearing on that a short time ago----
    Senator Breaux. Last week.
    Senator Glenn [continuing]. I think your statement on that 
indicated that you would favor upping the age on that. I 
certainly do, too. I think there is a lot to be said for 
experience. I think that adds a lot. Back when some of those 
rules were set earlier on airline pilots, for instance, the 
average age was lower. People were not living as long as they 
are today and they are much healthier today at the age of 60 
than the average person was back when the airline industry, 
starting back in the 1930's and 1940's.
    So I think there should be good testing of a person's 
capabilities. Airline pilots is a good example because they 
have great responsibility and we don't want somebody up there 
who is going to get sick or likely to pass out or whatever with 
a whole load of people on the airplane. But I think you can 
devise tests that not only are tests like I had to go through 
that show your physical condition, are you able to take 
whatever the stresses might be, but also, I think there could 
be some psychological tests given as to whether people are 
having any problems or not.
    I don't think that would be any problem at all, and I would 
favor upping the airline age myself. I would favor upping that 
because I think those people have a lot of experience. I think 
it is a shame to put pilots out to pasture prematurely. Some of 
the union people, I think, the airline unions of some of the 
younger members, like to see earlier retirement so that they 
can move up, so there is that end of it that has to be dealt 
with, too.
    But as far as the physical ability to do work, measure the 
physical ability, whatever it is, whether it is airline pilots 
or whatever the person's job is. You don't want someone staying 
in a job where it is dangerous to that person or other people. 
But I think you can devise tests to determine if it is safe for 
older people to continue contributing through their job.
    Jack talked about the advantages of exercise, and I agree 
with that 100 percent. People say, what are the two things you 
advise? Well, far be it from me to advise people on how to get 
old. I am having trouble enough coping with it myself. But if 
there are a couple of things that I think are very, very 
important, there are two things.
    One would be exercise, as Jack said, every day. You don't 
have to have to have a gym like Jack does. You can get out and 
walk down the street, or you can take flour sacks or something 
and do exercises and get enough. The doctor advised me years 
ago to get up a little sweat. That shows your body is adapting 
to the exercise condition that you are in. If you can, do that 
4 or 5 days a week. I like to get out and walk. The doctor 
said, don't jog anymore because all you are doing is banging up 
your knees and your bones and your joints. But you can do fast 
walking and get a sweat up. So do a couple of miles; I try to 
do that 4 or 5 days a week, usually hit it.
    Second, I think that it is important what your attitude is. 
If you get up in the morning and say, ``Oh, gosh, I am going to 
go sit on the porch,'' as Jack said, or are you going to rock. 
[Laughter.]
    Your biggest objective of the days is maybe waiting for the 
mail to come in at 5 o'clock in the afternoon well, you are 
probably going to dwindle pretty fast, I think.
    It is important to have something you enjoy doing, and 
everybody can have that, whether it is reading to the school 
kids, going down and helping somebody at the church or helping 
with the military or whatever it is. Everyone can have a 
project that you look forward to every day, enjoy doing, and 
you are doing it.
    I think exercise and attitude enable people to live to an 
older age and be productive at that time.
    Senator Breaux. That is a great summary. Just as a follow-
up, Jack, on the question about the exercise that you do, I 
mean, I know people in your category age-wise that just have 
shut it down as far as any type of physical activity at all, 
even though they are healthy and even though they would 
otherwise be able to do it physically. They are just thinking, 
well, I got to be 65. I am not supposed to do that anymore. I 
am supposed to get to the rocking chair and not do anything.
    How important was this whole exercise regime in keeping you 
going to the extent that you are today? How important was that 
to you?
    Mr. Valenti. I think, as Senator Glenn pointed out, that 
attitude, a state of mind, is so very important. I guess I look 
back on my President, President Johnson, who left office in 
January 1969 and he was dead 4 years later. I think retirement 
is absolutely--it despoiled him and it crushed him. People 
don't realize that he was only 64 years old when he died. So I 
have that in my memory.
    But I think it is doing things that you like to do. I have 
a lot of things I enjoy doing and a lot of things that I find 
exciting to do. Changing into a new career is exciting. It 
keeps you alive, keeps you vibrant, keeps you flexible. I 
certainly second what Senator Glenn said, that attitude in 
life, where you can't wait to get up in the morning to be about 
whatever task you have, not because you ought to but because 
you want to, big difference.
    I have to say, I have never spent a day in my life doing a 
job that I didn't like. I said earlier, I used the Rose great 
quotation. Most people lead lives of quiet desperation, mainly 
because they really don't enjoy the 24 hours of each day that 
they are living in, and I think that is quite sad.
    Senator Breaux. Thank you both, gentlemen.
    Senator Craig.
    The Chairman. The one question I had proposed to myself to 
ask of both of you was the advice you would offer to those 
about to retire. You have already answered that abundantly, I 
do believe.
    Senator Glenn. Don't.
    The Chairman. Exercise--don't. That is correct. [Laughter.]
    Exercise and attitude make a lot of difference. There is 
one question in all of that, because over the years, I have 
found the value of exercise and try to do it very regularly 
now. Is it exercise and physical fitness bringing an 
improvement in one's attitude? Would you not agree with that?
    Mr. Valenti. I certainly would. I think you are absolutely 
right. When you are feeling physically fit, you just enjoy life 
better. There is no question about that.
    Senator Glenn. You just have more energy.
    The Chairman. There you go. I agree with that. It is an 
energizer, and I think that we are certainly finding that now 
in many of our senior communities and senior centers, the 
emphasis on exercise and people who were fairly sedimentary are 
all of a sudden out and busy and exercising and spinning off 
and doing other things and generating a great deal of energy 
proves that exercise is extremely valuable.
    Gentlemen, thank you for coming to the committee and 
offering your advice and being examples of a good many citizens 
across the country who are not retiring but changing jobs at an 
older age and finding it very rejuvenating and exciting as you 
continue on your life. But we thank you for being here today.
    Senator Breaux. Senator Hatch.
    Senator Hatch. Thank you, Mr. Chairman. I want to thank 
both of you for being here. I can't think of two better 
examples of people who have made the most out of their lives 
than the two of you; your advice is really, really good. The 
people who really do live longer and have higher qualities of 
life are those who keep busy in doing what they really enjoy 
doing.
    I have been around both of you, and I have to say that you 
both do exactly that. Now, you could be a little less active, 
John, in this Presidential campaign. Laughter.]
    And Jack----
    Senator Glenn. I am working on Jack's problem with Social 
Security. [Laughter.]
    Senator Hatch. We are working on it. I just want to thank 
you both for being here and again express my high regard for 
the distinguished chairman here today. We are all going to miss 
him, and frankly, we are going to miss you at the MPAA, Jack, 
very, very much. You did a job there that I don't think anybody 
else in America could have even come close to achieving. I feel 
sorry for poor Mr. Glickman. He has got to succeed you and he 
has got to do the job of three people because that is the way 
you worked all the time. [Laughter.]
    It will take at least three people to do what you were 
doing, but hopefully we can all help him.
    Thank you both for being here and thank you for standing up 
for senior citizens. We appreciate it.
    Senator Breaux. Thank you, Senator.
    John Glenn, Jack Valenti, the committee thanks you. Your 
country thanks you, as well. Thank you.
    Senator Glenn. Thank you.
    Mr. Valenti. Thank you.
    Senator Breaux. I would like to welcome our panel up next, 
consisting of Dr. Ken Dychtwald, who is a psychologist, a 
gerontologist, and a best-selling author of 10 books about 
lifestyle and marketing and workforce implications of the age 
wave. He is founding president and CEO of Age Wave, a firm 
created to guide the Fortune 500 companies and government 
groups and product and service development for the baby 
boomers.
    Dr. Sharon Brangman--Dr. Brangman, please join us at the 
table--is a professor of medicine and Division Chief of 
Geriatric Medicine in the Department of Medicine at the SUNY 
Upstate Medical University in Syracuse, NY. She is also the 
director of the Central New York Alzheimer's Disease Assistance 
Center and the geriatric medicine fellowship program at SUNY. 
She was elected to the Board of the American Geriatric Society 
in May 2002.
    Mr. Doug Holbrook--Doug, welcome--is vice president and 
secretary-treasurer of the National Leadership Conference. He 
was previously a member of AARP, Andress Foundation Board of 
Trustees, and AARP Insurance Trust of AARP Health Care Options 
Program and a member of the AARP National Work Opportunities 
Advisory Committee.
    Ms. Victoria Humphrey, welcome. She is the head of the 
human resources for Volkswagen of America and also Volkswagen 
of Canada. In her executive leadership position, Ms. Humphrey 
oversees the human resources for the company's approximately 
3,000 employees. Prior to joining Volkswagen, she worked for 
American Bell, AT&T, Lucent Technologies, Northwestern Bell, 
and also Winn-Dixie.
    Ed Potter--Ed, thank you for being with us--is president of 
the Employment Policy Foundation, a nonprofit, nonpartisan 
economic policy research foundation that promotes sound 
employment policy. He is an economist and labor law attorney 
who has extensive experience on employment issues in a global 
economy. He has testified many times before the Congress and is 
a frequent media commentator, as well. He currently serves as a 
U.S. employer delegate to the International Labor Organization 
Conference.
    Gentlemen and ladies, we appreciate your being with us. 
Ken, do you want to start and we will go left to right and 
start with you.
    Mr. Dychtwald. Sure.
    Senator Breaux. Welcome back. We are glad to have you.

   STATEMENT OF KEN DYCHTWALD, PRESIDENT AND CHIEF EXECUTIVE 
              OFFICER, AGE WAVE, SAN FRANCISCO, CA

    Mr. Dychtwald. Thank you, Chairman Breaux and Co-Chairman 
Craig, for the honor of testifying today. I am going to 
organize my comments around six key points.
    First, we are in the midst of an extraordinary longevity 
revolution. Throughout 99 percent of all of human history, the 
average life expectation worldwide was less than 18 years. In 
the past, most people didn't age, they died.
    Thanks to extraordinary advances in the 19th and 20th 
centuries in sanitation, public health, better distribution of 
nutrition, foods, and modern medicine, now most of us will have 
the experience of living very long lives. Life expectancy, as 
you mentioned, has lifted from 47 to 77 during the past 100 
years, and I would point out that this longevity evolution is 
not over. With every decade that has passed, the average life 
expectation is elevated 2\1/2\ years, and the older we get, the 
longer one lives, as you point out. It is conceivable that in 
the years to come, breakthroughs in the life sciences will 
allow more and more of us to live into our eighth, ninth, tenth 
decade and beyond.
    I would point out that two-thirds of all the men and women 
who have ever lived past 65 in the entire history of the world 
are alive today. Knowing what to make of aging, longevity, 
knowing when to stop working, these are challenges the entire 
world is beginning to scratch its head and contemplate for the 
very first time in history.
    Increasing longevity doesn't necessarily mean we will have 
more old people who will be old longer. In fact, if you look at 
the population in the surveys, people are now beginning to 
think that old age begins somewhere between 75 and 80. People 
are electing to stay young longer, to be middle-aged for 
decades, to postpone old age.
    I would also point out on this first point that this 
longevity revolution, at the end of the day, may have a larger 
impact on our lives, our work, our economy, our families, our 
communities, than either the industrial or technological 
revolutions of previous centuries. This is a big one.
    Second point, there is a coming brain drain. In the years 
ahead, as the boomers born between 1946 and 1964 start hitting 
their 60's and contemplating retirement, there simply won't be 
enough talent to fuel the American workforce or to fuel its 
productivity growth. I would add that boomers are paying about 
60 percent of all the personal taxes at this particular time, 
and to cause that generation to no longer be earning and no 
longer able to contribute in those ways could be devastating 
economically.
    The Bureau of Labor Statistics projects, and it is hard to 
imagine this particular moment in time, but projects that we 
will have a 10 million worker shortfall over the next decade. 
Can we afford to lose so much skills, talent, so much legacy?
    My third point has to do with ageism. It is well known that 
ours is a culture that glorifies youth, in our language, in the 
way we talk to each other, in the models that we see on 
television, the people we see in ads. It is so much a part of 
our society, we hardly even notice it. But let us think of it 
in terms of the workforce. It is conceivable that this ageism 
is blinding employers so that they are literally driving their 
companies and organizations off a demographic cliff.
    Currently, two-thirds of U.S. employers don't actively 
recruit older workers. More than half don't really try to keep 
the older ones. Eighty percent don't offer any special 
provisions to appeal to their concerns. How about training? If 
we are going to talk about reinventing one's self, 55-plus 
workers receive on average less than half the amount of 
training than any of their younger cohorts.
    Ageism can start with recruiting, with such ads as to talk 
about energy and fast paced and fresh thinking, which are 
clearly ageist comments in disguise, and it can end with a 
golden parachute, in which people are simply ushered out the 
door quietly. Let us get them out of the way.
    I will give you an example. Ageism is so widespread in our 
culture, we really don't even notice it. One of the most 
popular TV shows last year was a show called ``American Idol.'' 
It was the American dream. People could be brought out of their 
communities, their neighborhoods, and have a chance to show 
their talent and achieve success, except you couldn't be over 
28 to join. We wouldn't tolerate that if it were sexism, if it 
were racism, and yet it is OK with Ageism. It is not OK.
    Mature workers are attracted to cultures that honor their 
experience and capabilities. Too few companies pay much regard 
to this theme.
    My fourth point, is that I actually think we are in a 
moment of a tipping point. We are seeing a new model of work 
and retirement emerge and we don't even really have the 
language to describe it. Let us remember, as has been pointed 
out, that retirement was not created so that older adults could 
enjoy decades of leisure. It emerged during a time in history 
where the unemployment level was 25 percent and there was a 
huge movement in America to rid the workforce of what were then 
called ``geezers.''
    There was an ageist spell in the roaring 1920's. Roosevelt 
had an interesting challenge. By trying to find jobs for the 
young, the only obvious solution was to allow older adults, who 
mostly had lived a life of physical toil, to step out of work, 
and if they were lucky enough to have some longevity, to 
experience a few years of rest before they passed on.
    Inadvertently, perhaps, by selecting age 65 and 
institutionalizing retirement, we have also institutionalized 
old age itself. We have removed older people from the sense 
that they might contribute. We have removed younger people from 
working side by side with people generations older than them. 
We have broken the bridges between generations that used to 
exist in the workplace.
    Today, with rising life expectancies, the average American 
retires at around 62 and will then have 20 more years of life. 
According to Webster's Unabridged Dictionary, to retire means 
to disappear, to go away. Is that good for anybody?
    One-half of today's retirees say they are bored and 
restless. They are worried about their economics. Last year, 
the average retiree watched 43 hours of television a week.
    People historically have lived linear life plans. When life 
was 40 or 50 or 60 years long, you learned once, you worked for 
a spell, and then you either passed away or had some 
retirement. I think what people are dreaming of in the future 
is a more cyclic arrangement in which they might go back to 
school at 50. They might retire and start a whole new career. 
We have seen extraordinary examples of that today with Senator 
Glenn and Mr. Valenti. Perhaps retirement in the future will 
still be there as a kind of a turning point through which 
people pass and then reinvent themselves in a whole new phase 
of life.
    Fifth, I made up the phrase ``silver ceiling'' a few years 
ago as I was hearing so much concern about glass ceilings. 
Eighty percent of boomers expect to keep working at least part-
time during their retirement, both because they will need the 
income and because they like the idea of staying involved. 
Older earners, let us remember, keep a stimulated economy, 
something that is going to be extremely important in the 
decades to come.
    But they are looking for different blends between work and 
play. They have reached a point in their life where perhaps 
they would like to work 4 days a week or 8 months a year, work 
on a project for a while and then step out, maybe work a few 
hours a day, maybe even volunteer.
    Truly flexible retirement is not yet possible for most 
employees, and perhaps that is a serious problem that is 
readily fixable. According to the Employment Policy Foundation 
study, one of Mr. Potter's studies, 65 percent of employers 
would like to offer such flexible retirement, with phased 
retirement and flex-time and part-time and retraining and 
rehirement, but most feel blocked by pension and benefits 
regulations. Even the IRS, ERISA, and ADEA currently have 
provisions that get in the way.
    My last point, is that there is no question that there is 
an age wave coming and old most certainly isn't what it used to 
be. In last fall's World Series, the winning Florida Marlins 
were led by 72-year-old Jack McKeon, called out of retirement 
early in the season to turn around an under-performing club. He 
is not alone. Sixty-five-year-old John Reed was named Interim 
Chairman and CEO of the New York Stock Exchange. Barbara 
Walters continues to expand her media range and burn up the 
airways in her 70's. Warren Buffett is widely viewed as the 
most respected investor in the world at 75. Of course, the 
Fed's Alan Greenspan remains capable and wise at 78.
    This late achievement is not a new idea, but it is 
multiplying. Grandma Moses didn't start painting until she was 
80. Groucho Marx launched his career on television at the age 
of 65. Galileo published his masterpiece, Dialogue Concerning 
the Two New Sciences, at 94. Noah Webster was 70 when he 
published An American Dictionary of the English Language. Frank 
Lloyd Wright designed the Guggenheim at 91. Mahatma Gandhi was 
72 when he completed successful negotiations with Britain for 
India's independence.
    I think we must realize that in this new era, people don't 
simply lose talent and experience over a lifetime at the flip 
of a switch. It is not good business to push people out the 
door just because outdated ageist policies say it is time. 
Perhaps late blooming should be celebrated, not penalized. 
Perhaps it is time to retire retirement.
    I would like to say in closing, a personal comment. I want 
to thank you, Senator Breaux, for the extraordinary wisdom and 
vision you have brought to this role over the past several 
decades. It is my honor to be here with you today.
    Senator Breaux. Thank you very much.
    Mr. Dychtwald. Thank you.
    Senator Breaux. I appreciate it.
    [The prepared statement of Mr. Dychtwald follows:]

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    Senator Breaux. Dr. Brangman.

 STATEMENT OF SHARON A. BRANGMAN, M.D., PROFESSOR OF MEDICINE 
 AND DIVISION CHIEF, GERIATRIC MEDICINE, SUNY UPSTATE MEDICAL 
   UNIVERSITY, SYRACUSE, NEW YORK, ON BEHALF OF THE AMERICAN 
                       GERIATRICS SOCIETY

    Dr. Brangman. Thank you for allowing me to testify today. I 
am Dr. Sharon Brangman. I am a board-certified geriatrician, 
professor, and division chief of geriatrics at SUNY Upstate 
Medical University in Syracuse, New York. I appreciate the 
opportunity to participate today on behalf of the American 
Geriatrics Society, an organization of approximately 7,000 
geriatricians and other health care professionals dedicated to 
the care of older adults. Geriatricians are primary care-
oriented physicians who are experts in caring for older adults.
    Our country is aging rapidly, as we have heard. Compared to 
about 35.6 million aged persons today, by 2030, it is projected 
that this number will double, to about 71.5 million older 
persons. The implications of this demographic imperative are 
dramatic.
    Public health measures, prescription drugs, and advances in 
medicine have allowed our citizens to live longer. Americans 
can now live for many years with multiple chronic illnesses, 
whereas a generation ago, most people died rapidly from an 
acute illness. This means that more people are able to work 
despite a chronic disease or disability. Technological advances 
can allow the workplace to be adapted so that these individuals 
can continue gainful employment.
    For many older Americans, age does not pose a major barrier 
to working. While health problems do increase with age, these 
are usually gradual processes that can be managed by current 
medical care. As a clinician, I see many patients who are able 
to work in some capacity. In many instances, working would 
allow for a person to do what we call aging successfully. 
Geriatricians typically evaluate the physical, social, and 
psychological aspects of their patients' lives since all of 
these elements are critical to our patients' ability to age 
successfully.
    First, we need to look at workplace involvement and how it 
creates more opportunities for community involvement that 
maximizes interactions with the outer world, allowing for 
greater physical and mental stimulation for older adults.
    Second, workplace involvement creates opportunities for 
important intergenerational exchanges that have a positive 
social and psychological impact on older adults. It is 
important to emphasize that this works both ways, since the 
younger worker also benefits from the mentoring and experience 
of older workers.
    Third, workplace involvement has a physical benefit. 
Individuals who do not have enough activities to occupy their 
day are more likely to sit at home and focus on all their aches 
and pains, which allows these ailments to have a greater 
significance in their day-to-day functioning.
    Another physical benefit of working is the increased 
physical activity that results from going to work. A recent 
study that appeared in the Archives of Internal Medicine 
indicated the importance of physical exercise in the elderly as 
a way of reducing physical decline and enhancing quality of 
life. The current 65 and older generation is not as likely to 
go into a gym or engage in formal exercise as younger adults 
do. However, employment can provide physical activity that can 
be just as beneficial as formal exercise. I am reminded of a 
patient who delivers flowers 6 days a week and benefits from 
the walking involved in his job.
    Fourth, workplace involvement has a psychological benefit, 
specifically preventing or reducing the onset of depression. 
Depression is not a normal part of aging, but unfortunately, it 
is very common in the elderly. In addition, advancing age is 
often accompanied by the loss of key social support systems. 
Because of this loss of social support and the fact that they 
are expected to slow down, some elderly persons are more likely 
to get depressed. Depression in later life frequently coexists 
with other medical illnesses and disabilities, which can make 
them worse.
    Persons who stay in the workforce feel valued. They have a 
strong sense of accomplishment, and they feel that it is 
important to remain contributing members of society. Almost 
universally, my patients state that they don't want to be a 
burden to their children or others. Studies have shown that the 
mental activity associated with working can allow for greater 
brain function and decreased rates of depression. This means 
that individuals will be more likely to remain functional and 
independent within their families, communities, and societies.
    I have two patient anecdotes that are relevant to today's 
hearings. The first patient is a highly successful and 
unmarried businessman who left his home State and retired to 
Florida at age 75 to live with his five sisters. In Florida, 
his family pampered him, a lifestyle that was new to him, and 
he became very depressed and lethargic. He ultimately left 
Florida, returned home, and started a new business, which has 
become nationally known, and he continues to work at age 85.
    The second patient is a retired Spanish teacher in her 
mideighties with over 35 years of teaching experience. She 
currently teaches adult Spanish classes four nights a week. She 
is an active gardener and a volunteer in her community. She 
enjoys a sense of accomplishment she has by working daily, and 
the continued interaction with others keeps her sharp and 
engaged. She could never imagine herself sitting home and doing 
nothing.
    I would be remiss if I did not discuss the needs of 
geriatrics and the acute shortage of trained physicians this 
profession is facing. Today, there are approximately 6,700 
certified geriatricians in our country. Some studies indicate 
that we currently need about 13,000 more, with as many as 
36,000 by 2030. Senator Breaux and other members of this 
committee have supported legislation that provides incentives 
to train more geriatricians, and we certainly respect and 
appreciate that support you have given us.
    Thank you for allowing me to address the committee today, 
and I look forward to working with you on this issue in the 
future.
    Senator Breaux. Thank you, Dr. Brangman.
    [The prepared statement of Dr. Brangman follows:]

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    Senator Breaux. Doug Holbrook, we are glad to have you.

  STATEMENT OF DOUGLAS C. HOLBROOK, VICE PRESIDENT/SECRETARY-
TREASURER, AMERICAN ASSOCIATION OF RETIRED PERSONS, WASHINGTON, 
                               DC

    Mr. Holbrook. Mr. Chairman and members of the committee, I 
am Doug Holbrook, vice president and secretary-treasurer of 
AARP. Before I begin, Senator Breaux, I would just like to say 
on behalf of AARP we deeply appreciate your years of service 
and we will miss you here on Capitol Hill, and we thank you for 
convening this hearing to highlight one of our nation's most 
under-used resources, the older worker.
    AARP is the largest organization representing the interest 
of Americans age 50 and older and their families. About half of 
AARP members are working either full-time or part-time. All of 
our working members, as well as those that want to work, have a 
vital interest in being able to remain on the job and to 
contribute to society without facing age discrimination by 
their employers.
    Protecting and expanding the rights and opportunities for 
older workers was a founding principle of AARP. Today, we work 
to eliminate age discrimination in employment and improve 
employment conditions and policies to all workers. We 
collaborate with employers to increase job opportunities for 
those age 55 and over and serve as an information 
clearinghouse.
    Older workers are similar to other workers. They work in 
comparable professions. They want a good income with benefits. 
They strive to balance job and family life. Indeed, family 
obligations are a key reason these workers are interested in 
flexible schedules, part-time work, and non-traditional 
arrangements, and older workers are very concerned about age 
discrimination in the workplace.
    The number of workers age 55 and over is growing in real 
terms and as a percentage of the overall workforce. As of this 
past July, more than 23 million persons aged 55 and older were 
on the job. By 2012, the Bureau of Labor Statistics projects 
the participation rate for 55- to 64-year-olds to jump from 61 
to 65 percent.
    There are basic economic reasons older workers choose to 
remain in the workforce. Earnings are often necessary to 
supplement inadequate income from savings and pensions, and 
this is especially true for women. The increase in the age for 
collecting Social Security benefits to 67, which affects those 
born after 1937, also means that many people will continue to 
work to avoid receiving a reduced benefit. Still others will 
work to have health coverage.
    Given projected labor shortages, we believe businesses will 
need to do more to attract and retain older workers. Some 
employers already are ahead of the curve and have adopted 
practices that address older workers' needs.
    Four years ago, AARP established an annual award program to 
recognize these companies. On Thursday, 35 businesses and 
organizations will be honored as AARP's best employers for 
workers over 50. They have formal and informal arrangements 
that allow older workers flexibility, such as job sharing and 
compressed work weeks. They also tailor programs to older 
workers, such as medical screening by employers who are health 
care providers.
    In addition, AARP has begun working with employers to 
expand job opportunities. For example, the AARP Foundation's 
Senior Community Service Employment Program formed a 
partnership with Home Depot to place qualified applicants with 
Home Depot stores that have open positions. CSEP serves people 
age 55 and over living near or below the Federal poverty level 
that need training to re-enter the labor force. Although it is 
relatively new, the program has generated a great deal of 
interest.
    Over the next decade, population growth will be most 
pronounced among individuals age 55 and older. Many will retire 
fully; many will not. One of the challenges for employers who 
want to stay competitive is to make work more attractive to 
those mature workers. Employers who understand this and adapt 
their work environment will find themselves better positioned 
to reap the benefits of this potential resource.
    The challenge for Congress is to establish policies that 
complement the innovative policies of employers who have 
successfully attracted older workers. For example, legislation 
protecting the retirement and health benefit of older workers 
will encourage these workers to remain in the workforce. 
Recognizing the needs of workers age 55 and over will help 
Congress develop policies to meet these growing needs.
    Mr. Chairman, thank you very much for the opportunity to 
address you today.
    Senator Breaux. Thank you, Mr. Holbrook.
    [The prepared statement of Mr. Holbrook follows:]

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    Senator Breaux. Ms. Humphrey.

  STATEMENT OF VICTORIA HUMPHREY, EXECUTIVE DIRECTOR OF HUMAN 
 RESOURCES, VOLKSWAGEN OF AMERICA, INC. AND VOLKSWAGEN CANADA, 
                     INC., AUBURN HILLS, MI

    Ms. Humphrey. Good afternoon. I am pleased to be here today 
to discuss the value and appreciation Volkswagen of America has 
for its older workers.
    Volkswagen of America, or VOA, was founded in 1955 and is 
headquartered in Auburn Hills, Michigan. We employ 
approximately 2,200 people in the United States who are 
responsible for various aspects of the design, testing, 
marketing, and service of Volkswagen group products, including 
Volkswagen, Audi, and Bentley brands. Our financial services 
subsidiary, VW Credit, Inc., provides financing for our 
products. Our retail network comprises about 840 independent 
dealers, and each year, VOA buys more than a half-a-billion 
dollars worth of American-made parts and components.
    One thing that makes Volkswagen different from other car 
manufacturers is our success rate in retaining employees, old 
and young alike. Nearly one-quarter of our U.S. workforce is 
over the age of 50 and employee turnover is just 5 percent. 
Recently, the AARP recognized us as being one of the top 
companies for older workers.
    Our attitude toward older workers is different from most 
companies. In the mid-1990s, it became common practice for 
companies to actively recruit young professionals with MBA 
degrees in order to bring in what was commonly referred to as 
``new blood,'' which always meant young. As many companies 
started to turn their organizations around, they became 
dismissive toward older, more experienced workers. This 
attitude is, in fact, a form of ageism, and ageism can be just 
as destructive as any other ``ism.'' In fact, in today's job 
market, older workers trying to make themselves more 
competitive are obscuring dates on their resumes so their age 
isn't so apparent.
    I had the experience of joining VOA at the age of 53. 
Knowing I was one of six candidates, I was concerned that my 
age might be an issue. I later learned, during the discussion 
of candidates, age was never mentioned. It was then that I knew 
I had joined a company that valued experience, knowledge, and 
skills over anything else.
    I was asked to talk today about the benefits VOA offers our 
older workers and what we do to retain them. The truth is that 
there is no magic benefit. Rather, it is the magic of treating 
all employees with decency and respect.
    However, we have several programs of special interest to 
our older workers. As an example, we give special bonuses for 
25-year and 35-year anniversaries. We provide ongoing training. 
We offer flexible work options. We actively encourage our older 
workers to mentor our younger workers. We provide opportunities 
for employees to gain retirement planning advice.
    However, we mainly attribute our good record of retaining 
employees to a positive corporate culture. Employees feel they 
are part of a larger family and we have a clear policy against 
discrimination of all kinds, including a strong commitment to 
diversity supported by our Diversity Council. Our anti-
discrimination policy is taken very seriously, starting with 
our CEO, Gerd Klauss, and is a hallmark of our entire 
organization.
    The best human resources professionals understand human 
nature, and part of human nature is that people appreciate 
feeling valued. Companies that demonstrate an appreciation for 
older workers will retain them, as well as their experience and 
knowledge. Older employees hold a vital key to success, a solid 
understanding of the business that cannot be gained any way 
other than through experience.
    Data shows that when communication fails, 93 percent of the 
time, it can be attributed to a lack of relationship building 
rather than a lack of technical expertise. Clearly, companies 
that understand the importance of relationship building will 
have a competitive edge over those that do not. VOA is a 
company rooted in relationships, which can explain why 
employees who join tend to remain with us for a significant 
period of time.
    Why are we a company that has such a capacity for valuing 
differences? It is a tough question, but perhaps it is based on 
our culture and unique history. We have always been an 
emotional brand, even an icon to some generations. People root 
for the Beetle, and most everyone has his or her own VW story.
    In conclusion, we understand that the keys to success are 
great products and great people. Our teamwork has the power to 
ensure that our successful car brands continue going strong. We 
place a high value on our older workers and that is our magic. 
Older employees want to work at VOA, and in turn, that makes us 
successful.
    Thank you for the opportunity to share a little of our 
culture with you today.
    Senator Breaux. Thank you, Ms. Humphrey.
    [The prepared statement of Ms. Humphrey follows:]

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    Senator Breaux. Mr. Potter.

  STATEMENT OF EDWARD E. POTTER, PRESIDENT, EMPLOYMENT POLICY 
                   FOUNDATION, WASHINGTON, DC

    Mr. Potter. Thank you, Mr. Chairman. The previous witnesses 
have documented the contribution that older workers can make to 
the workplace and have discussed the consequences of the great 
demographic changes that are taking place that will result in a 
labor skills shortage in the United States over the next 30 
years.
    One of the ways in which you can deal with a labor and 
skills shortage is to increase participation rates in the labor 
force, including increasing overall hours of work of older 
workers who would otherwise be retired. The focus of my 
testimony is on the private sector, where a number of legal and 
regulatory obstacles limit the ability of older workers to 
shift gradually from full-time work to full retirement through 
the use of phased retirement programs with their current 
employer.
    Phased retirement is any human resources program that 
allows older workers to reduce their hours and eases the 
transition to full retirement if that is what the workers' 
preference is. Phased retirement programs offer a win-win 
strategy to meet the needs of retirees, companies, and this 
country.
    Because of legislative and regulatory obstacles, virtually 
no company offers a seamless phased retirement program in which 
the employee gradually shifts from full-time employment to 
retirement. As a consequence, most phased retirees are retired 
employees from other firms or former employees who return after 
several years or months break in service as independent 
contractors or part-time employees. The rules are sufficiently 
complex that many companies are unwilling to consider phased 
retirement strategies for fear of jeopardizing their qualified 
pension benefits programs.
    The legal and regulatory obstacles to phased retirement 
arise primarily from ERISA, the Internal Revenue Code, IRS 
rulings, and the Age Discrimination in Employment Act. Social 
Security, Medicare, and tax policy are also important factors, 
particularly from the employee point of view.
    The most significant barrier to phased retirement, at least 
those administered through qualified defined benefit plans, is 
the prohibition against pension distributions to active 
employees who have not attained normal retirement age. This is 
entirely a regulatory question. Because the IRS considers the 
restriction of pension distributions to be a qualification 
issue, the consequences of premature or inappropriate 
distribution of benefits could disqualify the defined benefit 
plan, resulting in disallowance of deductions for employer 
contributions to the plan as well as taxation of trust earnings 
and participants' vested benefits.
    Most companies with modified phased retirement plans 
require at least a 6-month break in service with maximum annual 
hours of 1,000 hours. If the phased retiree works more than 
1,000 hours, the pension benefits are cutoff. Some companies 
require a year break in service. Some companies have ruled out 
modified phased retirement entirely because their legal 
conclusion is that there is no break in service that is long 
enough to remove the pension plan from jeopardy.
    ERISA requires employers to adhere to rules promoting 
uniformity and standardization in the treatment of employees 
and the types of benefits offered, and that is a good thing. 
However, when we are looking at this question of phased 
retirement, we are looking at an entirely different question in 
which the distribution of critical skills across the labor 
force are not equally distributed.
    The limits of the benefits payable from the defined benefit 
plans are much more complex to administer and affect phased 
retirements. The most significant issue is the lack of clarity 
regarding application of limits when a portion of participants' 
benefit begins with phased retirement and the remainder on full 
retirement. The phased retirement payment option in a qualified 
plan is an optional benefit covered by the anti-cutback rule. 
This is a very complicated, complex rule in which there is no 
experience in dealing with it in the context of phased 
retirement.
    Employers are also susceptible to potential lawsuits under 
the Age Discrimination in Employment Act. Phased retirees are 
likely to be part-time workers. Employers frequently provide 
different benefit packages to part-time workers than to full-
time workers. Even a nominal difference in benefits could serve 
as a basis for an age discrimination suit.
    For a phased retirement to flourish to meet the skill and 
labor needs of employers and the retirement and work-life 
balance needs of older Americans, legislative and regulatory 
phased retirement policy must be flexible to accommodate the 
varying needs of workers and employers. There should be 
flexibility in what is considered to be the normal retirement 
age in order that length of service considerations for the 
current employer can be taken into account.
    Legislative and regulatory phased retirement policy must be 
voluntary for workers who may elect phased retirement and 
employers who may choose to offer it as a retirement benefit. 
Business conditions, realignment, new lines of business, and 
labor demographics will be critical considerations in whether 
to offer a phased retirement program. Phased retirement should 
not be considered a permanent entitlement nor should there be 
an expectation of early retirement subsidies or health 
insurance as part of the phased retirement program.
    Until the legislative and regulatory hurdles are removed, 
most companies will be unlikely to offer more extensive phased 
retirement options because of the lack of flexibility, 
potential cost, and liability.
    Thank you for the opportunity to testify before you today, 
Mr. Chairman.
    [The prepared statement of Mr. Potter follows:]

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    Senator Breaux. Thank you very much, all the panel members, 
for your presentation. After listening to all of this, I feel 
like I almost have a conflict of interest in chairing this 
committee on retirement while I am in the midst of doing that--
-- [Laughter.]
    But it has also all been very helpful, both personally and 
as a chairman of the committee, to hear your thoughts.
    The issue you just talked about, Mr. Potter, was really 
very interesting because, it seems like there is either a 
statute or regulation that really makes it more difficult for 
people to continue in a phase-down type of employment 
operation, so it is not being done very much. There are not a 
lot of people, I take it, taking advantage of a phase-down 
retirement work schedule?
    Mr. Potter. Well, the issue, frankly, is that because of 
the break in service requirement, that there is no 
straightforward way, particularly for those employees who are 
eligible for defined benefit plans, to do this kind of gradual 
phase-down. They must leave their employer for some period of 
time.
    Senator Breaux. How long is that period?
    Mr. Potter. Well, it is not clear what it is. I would say 
the center of gravity is around 6 months, but----
    Senator Breaux. So they could leave, as I understand it, 
they would have to actually depart and sever their relationship 
with their employer for approximately 6 months----
    Mr. Potter. Six months.
    Senator Breaux. Then they could come back legally, I guess?
    Mr. Potter. You can see that is quite an obstacle. By that 
time, if you need to work, want to work, you are going to go 
someplace else.
    Senator Breaux. In your opinion, would Congress have to act 
to change that, or is that something that is done by regulation 
and is not likely to be changed because of the bureaucracy?
    Mr. Potter. This particular issue really is entirely a 
regulatory issue. Obviously, Congress can provide advice here. 
This issue also really is more than just a revenue issue, and 
so consideration ought to be given to giving joint jurisdiction 
to the Department of Labor and IRS to work out the----
    Senator Breaux. Yes. It seems like these decisions which 
affect individuals' working conditions is being regulated by 
the Internal Revenue Service as opposed to, say, the Department 
of Labor, which would look at it from a different perspective 
as far as the workforce is concerned.
    Mr. Potter. That is right, and there is precedent for this 
kind of joint jurisdiction. It has been done in other 
circumstances and it ought to be done here.
    Senator Breaux. I wonder if it would take more than just 
changing jurisdiction. I wonder if it would require perhaps a 
legislative endeavor by the Congress to send a message that 
this is how it should be considered.
    Suppose you were in charge of writing the rule and you had 
the pencil and you were ready to write it. How would you 
structure what you think would be a preferable way of handling 
this particular problem that you spoke about?
    Mr. Potter. Well, I think that you would want to start with 
some kind of amendment to ERISA, because not only do you want 
to address this break in service issue, but you want to lay 
down some guidance on the issue of discrimination in benefits 
and what you do in a phased retirement context. You want to 
make clear what Congressional intent would be with respect to 
the anti-cutback rule in this respect.
    So I think what you would want to do is, and I think this 
could easily be a bipartisan activity, I think this is not--I 
mean, the thing that is interesting to me about this hearing is 
everybody is on the same page here. I think there is a 
consensus across the country that would make something like 
this quite possible.
    Senator Breaux. Perhaps we could ask if you could--I know 
you address it in your statement, but if you could synthesize 
it into sort of a recommendation, I think the staff would like 
to take a look at it. There is still some time left in this 
Congress for things that have to be done legislatively, and 
perhaps something like this could be placed in legislation that 
is working its way through the Congress, i.e. an appropriations 
bill or an omnibus appropriations bill where just maybe if we 
could do it in a bipartisan fashion, which I think we may be 
able to do, we could really make a difference at this late 
hour. So if you could give us a more synthesized recommendation 
on what you think would be helpful, then the legislative staff 
could take it and maybe we could find a place to put it.
    Mr. Potter. I would be glad to do that.
    Senator Breaux. I saw a TV program the other day. I would 
like to ask you to comment on the substance of it in the sense 
that there was an employer who specialized in seeking out 
people over 65 to work in their shop, and they basically, not 
to talk in details about who it was--I honestly don't 
remember--but they were making widgets, making small pieces of 
product--I am not sure whether it was jewelry or whatever it 
was--but it was basically a hands type of craft. The employer 
basically only hired seniors.
    But his reason for doing it wasn't because so much as he 
was trying to help the seniors. He was trying to help his 
company, and the logic he had was that--sort of cold-hearted as 
it sounded--I don't have to provide them health insurance 
because they are all on Medicare and they already all have 
health insurance. Therefore, by hiring 65-year-old people who 
are on the Medicare program with health insurance, I was 
actually--he said--I am actually able to beat my competition, 
who is hiring employees who they have to provide health 
insurance for. It is a huge savings. It makes my company much 
more profitable.
    Do you have any comments on that? Ken.
    Mr. Dychtwald. That is a great example. There are a few 
pieces to it that perhaps are worth commenting on. First, there 
is generally the point of view that older workers are less 
reliable, less productive, or more likely to injure and hurt 
themselves on the job. I am sure the other panelists could 
comment that this is all kind of a myth.
    In general, older workers tend to be more loyal, more 
reliable, less likely to hurt themselves on the job, less 
likely to miss work. They are pretty terrific workers.
    To the point of an employer saying, ``Hey, why not recruit 
more of these people, they pretty well get the job done'', I 
think you are actually going to see more and more of that.
    To the point that people are thinking, well, gee, if I hire 
an older adult at that particular age, then they get their 
insurance sort of picked up by the government, or if they are 
over 55, they can use their AARP discounts and get cheaper rate 
on car rentals when they are out making sales calls and get the 
low rates on the airlines---- [Laughter.]
    I mean, some people are going to figure out how to game the 
system and actually find out that not only are older people 
pretty darn productive and valuable, but there are some 
benefits they bring along with them. The question is, is that 
fair or just? I think it is legal, but I think you are going to 
see more of it.
    Senator Breaux. I mean, this guy was saying, ``Look, I am 
not doing this for any reason other than it makes my business 
more profitable.''
    Mr. Dychtwald. Sure.
    Senator Breaux. The people show up on time. They are not 
late for work and they are dependable. They already have health 
insurance, so I am not having to pay for it, so this helps me 
in beating my competition.
    Mr. Dychtwald. I would add that most older adults are 
empty-nesters and so they are not having to take time off from 
work to look out for their children. They are not having to 
worry about child care. They make----
    Senator Breaux. They are not taking maternity leave.
    Mr. Dychtwald. That is right. So when you add up the new 
equation and you remove some of these false biases, they are 
actually a pretty attractive group of candidates.
    I would add also, if I might, as your drafting what 
conceivably could be the new regulations, that some older 
people are keen on the idea of phasing their work down, phased 
retirement, maybe going from 5 days to 4 days to 3 days to 2 
days. As was pointed out, with many companies, the only way you 
can accomplish that, is to first quit, or be fired, or retire, 
and then what people often do is just go work across the 
street, where you can startup the next day, which is a little 
bit ridiculous because employees are giving up the legacy you 
have invested in.
    But there are many people in the boomer generation who 
envision a more flex version of retirement, where instead of 
simply having to pare down each year, they might want to work 6 
months out of a year and have a big time off and maybe work in 
cycles. I would hope that any new regulatory considerations 
would accommodate that, as well.
    Senator Breaux. Thank you.
    Mr. Holbrook. Mr. Chairman.
    Senator Breaux. Yes, Mr. Holbrook?
    Mr. Holbrook. If I may, I think there are a lot of myths 
associated with the fact that older Americans should not be 
working, but the fact of the matter is, I think that Ken has 
pointed out some of those myths. But the fact of the matter is, 
there are problems that some employer is going to hire someone 
on the basis that they are not going to have to pay any type of 
health care.
    Unfortunately, at the present time, people are not fully 
covered under Medicare, particularly for prescription drugs, 
which is a real serious problem for many of our seniors in this 
country, and many of them have to have and need and do have 
supplemental coverage. That is one of our major concerns, is 
that they have these health benefits provided. I don't know 
that you would declare that employer selfish, but I think it is 
a little unwise to use that as the only criteria to go and use 
for your business, is that they do not have any health--we do 
not have to pay health coverage.
    Senator Breaux. Well, this person really talked about the 
other aspects, too. He said, ``Look, they are dependable. They 
do good work. I can count on them showing up. In addition, they 
already have health coverage.'' So he was complimentary about 
the work ethic they had, as well.
    Dr. Brangman, give me some discussion, if you might, on any 
potential connections between retirement and depression. I 
mean, it seems to me that, and I think Jack Valenti and John 
Glenn both referred to it, but if you are staying active 
physically by working, your body is active, you have a better 
attitude, more positive attitude, et cetera. How many of the 
people who we find that are clinically depressed, I mean, how 
much of a contribution do you think the fact that they don't 
have a job, they don't have something to do every day that they 
wake up to, contributes to that?
    Dr. Brangman. I think that is a large contributor to 
depression in old age. It is still vastly under-diagnosed and 
under-treated, but for people whose identity has been their job 
and their work and that suddenly stops, they lose a lot of 
their social connections, their outside contacts with the 
world, their sense of purpose. If they didn't have any other 
interests or activities that they had cultivated during their 
working life, everything kind of comes to a stop.
    Most of my patients tell me that they want to feel like 
they are contributing to the world around them. They don't want 
to be a burden. They want to remain independent. When they 
don't have those feelings and they have time to sit by 
themselves, I think that depression is a significant issue.
    Senator Breaux. What about the possibilities of people who 
find themselves in an assisted living type of facility 
continuing to work? I mean, it would seem to me that with all 
the outsourcing that we are doing out of the country, it seems 
to me that we could attempt to utilize and provide work for 
people who are in assisted living type of facilities and not 
being fully utilized. It seems like you can only play so much 
golf in a retirement home or what have you. Is there any 
potential in that area for doing something like that?
    Dr. Brangman. Well, I think so. Generally, patients, or 
people who are living in assisted living facilities just need 
minor supervision. They are still fairly healthy and can move 
around and take care of most of their needs. They have vast 
periods of time with very little activity. I have many patients 
who tell me they never want to play Bingo or shuffleboard. If 
we could become creative and figure out ways that they can 
contribute, volunteer work, there are a number of jobs that are 
done by telephone, other things that can be looked at that 
could give them a reason to be excited when they get up in the 
morning, something to look forward to, and something that they 
feel most importantly connected to that they can contribute to.
    Senator Breaux. I think that is all very important. I have 
been a big participant and promoter of the Senior Games, the 
so-called Senior Olympics, and you find that in talking to 
these people that have these challenges out there that it is 
such a motivation for them to get out and try and improve and 
compete against people in their own age category. I think it is 
incredibly good.
    Ms. Humphrey, tell us a little bit about how Volkswagen of 
America, has been involved in employing older Americans. Do you 
segregate the type of work they do? Are they hired for the same 
work disciplines as someone who is 25, as opposed to someone 
who is 65? How does it work? I mean, does human resources say, 
``All right, here are all of our 65-year-old employees. Let us 
go find something to do for them that is fitting for a 65-year-
old.'' Or are they spread throughout the workforce 
indiscriminately? Can you comment on how they are placed and 
what they do? What is the structure of Volkswagen's use of 
older Americans?
    Ms. Humphrey. As I said in my remarks, it truly is a 
remarkable environment in the sense that not only do we not 
discriminate, but in the automotive industry today, which is 
getting increasingly more complicated, it is the experience 
that matters. So we try to keep our younger workers away from 
complicated stuff, and I say that in jest, but it is a very 
complicated business. It is the older workers that are so 
critical to our success and they are the mentors for our 
younger workers. So there is absolutely nothing that we do that 
separates our workers----
    Senator Breaux. So there is no separate division for people 
over 65 that is the senior division of Volkswagen that you have 
segregated out? [Laughter.]
    Ms. Humphrey. Not at all.
    Senator Breaux. I appreciate your comments about the 
experience. I remember when I ran for Congress 32 years ago, my 
slogan at that time was ``experience makes the difference.'' Of 
course, I was 28 years old. [Laughter.]
    I am not sure how I got away with that slogan, but we did. 
[Laughter.]
    Senator Kohl, we have had a terrific hearing. We had our 
former colleague, Senator John Glenn, here, and Mr. Jack 
Valenti talking about keeping active and how important it was 
and how they felt about retirement, and they didn't retire, 
they just changed jobs. That is kind of what I am doing, too. 
This panel was very helpful in discussing some of the 
opportunities for the utilization of seniors as well as some 
legislative and regulatory prohibitions about allowing them to 
do phased retirement, working less and less but continuing in 
the workforce, which we may try to address. Do you have any 
comments or questions? We welcome you here.
    Senator Kohl. Thank you very much, Senator Breaux.
    As I understand it, the demographics indicate that in the 
years to come, looking out ahead 5 and 10 years, the number of 
people leaving the workforce are likely to be far larger than 
the number of people entering the workforce. If that is true, 
isn't that going to create a whole new situation with respect 
to the need for people who are older remaining active and busy?
    I think that while it is true in terms of the advice given 
to people who are about to retire, they need to stay busy and 
active and energetic and engaged, there needs to be, isn't it 
true, in the final analysis, a real need for people to stay 
working, and if there isn't a real need for it, then it is 
awful hard to create ways in which people who are retiring can 
stay engaged. But if, in fact, there is a real need for people 
in the workforce, then, of course, you will have more people in 
the workforce. My understanding is that the numbers indicate 
that there will be a real need.
    Do you know anything about that? Do you have any comments 
to make on that? Yes, sir?
    Mr. Dychtwald. Yes. Very often, we imagine that economics 
and workforce flow have a great deal to do with technology and 
immigration and geopolitical dynamics, all of which they do. 
But we often think that demography is flat like a lake. Quite 
the opposite. It is convulsing like an erupting lava flow.
    During the 1990's, the number of 18- to 34-year-old 
Americans actually shrank by 9 million people while the number 
of 50-plus Americans grew by 12 million people, and that 
movement, brought on, of course, by increasing longevity, the 
aging of the baby boom and the baby bust that began in the mid-
1960s, is going to be a powerful engine that reshapes workforce 
talent.
    So yes, you are 100 percent right. In the years to come, 
more than ever before, we are going to need those 57, 62, 74, 
and 80-year-olds who, by the way, may have enormous 
contributions to make. But we may need to construct the kind of 
flexible work arrangements and remove the obstacles so that 
they can do that.
    I think there is another side we have to be careful not to 
hammer on, which is I don't think we are saying, any of us, 
that everybody must work until their last breath. I think what 
we are saying is, for those who wish to work, who wish to earn 
a livelihood, cash-flow often takes a little bit of the worry 
off of dependency and who is going to pay for this, that we 
remove the obstacles, both psychological and workforce and 
regulatory, so that folks may continue to be gainfully employed 
in some way, should they wish.
    We will need the talent and the capability of our aging 
workforce. Eighty percent of the growth in the American 
population over the next 25 years will come from people over 
the age of 50. That is an event that has never occurred before. 
This is a very serious issue.
    Mr. Potter. Senator, another way to look at your question 
is that, on average, each individual in our country contributes 
$78,000 worth of value each year. To the extent that that value 
is taken out of the economy, that is how much smaller our gross 
domestic product will be. So if you take the projection in 10 
years that we may be short as many as 10 million workers, 10 
million times $78,000 is about $0.7 trillion off of the 
national gross domestic product. So we are talking about 
standard of living, per capita income, ability to deal with 
hard social problems.
    Senator Kohl. Will we need to make some different financial 
arrangements with these people as they get older, so a person 
who reaches 62 or 65 or whatever wants to continue to work, the 
employer may want to continue to have that person working, but 
maybe with different kinds of money considerations?
    Mr. Dychtwald. For the elder himself, there is the good 
news and the bad news. The good news is, as Mr. Potter has 
identified, there are some regulatory shifts that I think must 
occur in order to ease the obstacles to people who want to 
continue working.
    But from the employer's point of view, there is a concern 
about merit-based versus tenure-based pay. In other words, if 
two people are holding a camera for my network and one of them 
is 27 and she is quite good and one of them is 67 and she is 
quite good, but I am paying the older one four times as much, I 
may want to remove the older one to get competitive rates.
    So the idea of everybody taking a deep breath and saying, 
we can make these rules more fluid, but on the other hand, 
people shouldn't expect just because they have been around the 
planet longer that people are going to be willing to pay them 
enormous amounts, and that is a bit of a bite the bullet.
    I might also add that it is not just compensation-related 
work, that today, seniors have the lowest volunteer level of 
any age group in America, and perhaps we might think of those 
40 million retirees as an enormous national treasure that could 
be reinserted back into our culture for everyone's advantage. 
Having a productive elder population is a substantial link to 
our future.
    Senator Kohl. You made a point that I think is indisputably 
true. If you have a person 67 and a person 27 and they are 
equally productive and the person 67 is making 50 percent more 
than the person 27, as an employer, you almost have no option 
but to try and move the person 67 off your payroll, right? If 
you are running a business on behalf of your shareholders----
    Mr. Dychtwald. Or you might go to another country to find 
workers, or you might fire that older person and then hire them 
back as a contract consultant in order to get around the ERISA 
and ADA and IRS restrictions. But yes, you are encumbered to 
try to find a way to be competitive, and a lot of older 
workers, their fee scale is difficult for employers.
    Mr. Holbrook. It would seem to me, Senator, that if the 
elder worker is doing the same work as the younger worker, I 
have a serious concern when you say, let us get rid of the 
older worker and give the younger worker more money. That is an 
argument that would be very difficult in my mind to live with. 
If the older worker is doing the job, producing the way that 
they should be producing and would be producing, I don't 
understand the logic of saying, we will take away their salary 
benefits or any of their fringe benefits that they might have.
    Senator Kohl. But if you can, as an employer, at some point 
hire someone who is younger and just as productive at less 
cost, employers are almost required to think seriously about 
that because that is just the way the marketplace works, isn't 
that true? I am not suggesting what the morality is. We are 
talking about the requirements of people running businesses who 
need to make profits. Not to say that you should move the 
person out, but you make rearrangements of sorts to keep that 
person employed rather than have a situation where you are 
forced to move them out even though you may not want to move 
the person out.
    Mr. Holbrook. Well, we in AARP do not believe in mandatory 
retirement, so that takes care of that problem for us.
    Mr. Potter. Senator, in the context of this hearing, I 
think your example is actually going to be the exception in the 
future. I think the future is going to be the situation you are 
going to need a critical skill that is not available by any age 
demographic in your workforce and you are going to need to keep 
that older worker in order to maintain the competitiveness of 
that business.
    Ms. Humphrey. I would like to add, too, that the more 
complicated the job is, the more important it is to have that 
experience. You may not run into a critical situation every day 
where you need to draw on that experience, but when it happens 
and you have the right experience, it can be worth its weight 
in gold. That is why we try to partner our older workers with 
our younger workers, because there is just too much complexity 
in our environment.
    Senator Kohl. Thank you, Senator Breaux.
    Senator Breaux. With that, I thank very much the panel and 
I appreciate their nice and generous comments.
    With that, this committee will be adjourned.
    [Whereupon, at 3:40 p.m., the committee was adjourned.]


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