As older Americans live longer and healthier lives, many are planning to work longer. According to a recent survey, 80 percent of baby boomers expect to work past traditional retirement age. Some may do so because they enjoy physical and mental benefits of work, while some may need the additional income to remain financially secure. Whatever the reason people decide to stay on the job, it's time to change the way our nation thinks about retirement. A one-size-fits-all retirement will no longer match the very different plans that seniors and baby boomers have for their later years.
Rethinking retirement is also vital to our nation's economic future. By 2030, businesses could face a labor force shortage of 35 million workers, and the projected slowdown in labor force growth could translate into lower economic growth and living standards. Some businesses have already begun to recognize this problem and are taking steps to utilize the talent of our nation's seniors in the workforce. Unfortunately, barriers in pension law, shortcomings in job training programs, and family caregiving commitments make it difficult for older workers to keep working.
In April 2005, as Ranking Member of the Senate Special Committee on Aging, Senator Kohl held his first hearing on "Living Stronger, Earning Longer: Redefining Retirement in the 21st Century Workplace." In 2007, as Chairman of the Aging Committee, Senator Kohl held a hearing entitled "The Aging Workforce: What Does it Mean for Businesses and the Economy?" Donald Kohn, Vice Chairman of the Board of Governors of the Federal Reserve System, testified that economic growth could decline significantly as a direct result of the declining labor force participation of our aging society. David Walker, Comptroller General of the United States and head of the Government Accountability Office, also testified about GAO's report on key obstacles to engaging and retaining older worker, as well as best practices and strategies to retain them.
In conjunction with the hearing, Chairman Kohl re-introduced legislation to give older Americans the opportunity to work longer if they so choose and offer incentives to businesses for employing older workers. The Older Worker Opportunity Act of 2007 provides a tax credit for businesses that employ older workers (ages 62 and up) in a "flexible work program," which must provide a full- or part- time flexible work schedule and full pension and health care benefits. The Health Care and Training for Older Workers Act extends COBRA health insurance for older workers, as well as improves access for seniors to federally-funded job training programs. In addition, the bill would establish through the Department of Labor a clearinghouse of best practices in the private and public sectors for hiring and retaining older workers, as suggested by the GAO report.