Greeted with a largely uncritical media response, the federal government’s recent announcement of a Productive Ageing Package of policies targeting the employability older workers adds to its own and Howard/Costello government initiatives aimed at pushing out the date of retirement. They mirror and follow a vast range of policymaking on age and work among most of the industrialised nations for more than a decade. We can expect a slew of other policy announcements around issues of protracting the age of retirement in years to come.

It appears that older people are viewed as a growing burden on the rest of Australian society. Policymakers are concerned about worsening dependency ratios in years ahead as the population ages and pointing to lower labour force participation rates and fewer working hours among this segment of the population. The preferred policy solution is that they start paying their way and stay in or re-enter the labour market. This may not seem like a positive vision for an ageing Australia. It may offend older people, who would consider that they have contributed much to society, and alarm industry, which already has doubts about the productivity of older workers.

Somewhat ironically, in previous times older workers have also been viewed as a burden, this time in order to legitimise their social exclusion. In the 1970s and 1980s there was a remarkable social consensus on the need to remove older workers from the labour market in order to create jobs for the large numbers of younger jobseekers at that time and to build a new and dynamic economy. This resulted in the growth of early retirement in most of the industrialised nations.

In recent times, early retirement has largely been rejected. Economists have invoked the “lump of labour fallacy,” criticising governments who supposed that there was only so much work to go around and embraced early retirement as a means of job creation for the young. The policy objective now in many countries is one of extending working lives, even if the extent and pace of reform varies significantly. In international policy circles, a new consensus is emerging around the notion of “active ageing,” which has been defined by the World Health Organization as “the process of optimising opportunities for health, participation and security in order to enhance quality of life as people age.” According to the OECD this will necessitate a greater emphasis on prevention; making inexpensive policy interventions at earlier life stages, thereby reducing the need for later remedial action; actions that are less fragmented and that are concentrated at critical transition points in life; and to also enable less constrained choices and greater responsibility at the level of individuals. It has also been argued that a common strategic framework for reform is needed, as changes in one area can offset reforms in another and may also cut across the traditional program boundaries of labour market and pension reform.

The Australian government perspective apparently differs from these international bodies in that largely economic imperatives seem to be taking precedence over wider social ones. Thus, it has adopted a subtly different terminology, employing the rather narrow economic term “productive” over the rather more inclusive “active” ageing in its policy announcement. The former term comes from the United States where it has been defined as “any activity by an older individual that produces goods or services, or develops the capacity to produce them, whether they are to be paid for or not.” This is clearly rather different from the kind of later life envisaged by the WHO and other bodies.

With increasing policy interest of late, might it be supposed that we are on the verge of a new era of employment characterised by a prolongation of working life? This supposition would be quite premature. In recent decades, older workers have had a greater likelihood of both losing their jobs and experiencing considerable problems re-entering the labour market and once out of the labour market are highly likely not to re-enter it. In 2009 approximately one third of the unemployed population (43,800 individuals) aged 45 to 64 had been unemployed for one year or more. Even a cursory glance over many years of research would temper optimism that many older workers have real choice over the circumstances in which they work or even retire, or that the attitudes and practices of employers are undergoing a shift in their favour. Rather, research makes it clear that their prospects depend to a large extent on market conditions, which should make us sceptical that their improved circumstances will persist if the economy experiences a significant downturn, and raises important questions about the changing position of older workers in a globalising labour market. While there is a broad policy consensus on the economic and social benefits of extending working lives there are factors working against the reintegration of older workers, for example, relatively high youth unemployment, increasing levels of work intensity, and the persistence of an early exit culture. It would be interesting to gauge the Australian public’s response to recent announcements about working later and working age, for recent European research, for instance, finds that most people there are not in favour of working longer.

A strategic approach to the issue of working later would necessitate national policymakers looking much further ahead, using the 3rd Intergenerational Report’s 2050 time horizon, to today’s 25 year olds, developing policies for the whole of a working life as argued for by the OECD, intervening at particular junctures along the way, rather than attempting remedial actions in a person’s fifties, when success is improbable. It seems unrealistic to suppose that the government measures which have been announced will do much more than scratch the surface of the current older worker issue. The scale of the problem is astonishing and also highly resistant to “active” ageing. For instance, according to FAHCSIA in 2008 among the approximately three-quarters of a million disability pensioners in Australia, the majority were aged over 45, some half a million, of whom the vast bulk were not in any kind of employment. Of these well over half had been claiming benefits for over ten years. This figure dwarfs that for unemployment among older people and makes clear that any attempt to activate older people of working age is fraught with problems. As a potential source of valuable human capital the reactivation of such people would clearly be an impressive (and unrealisable) achievement. Many are too ill or distant from the labour market, while workplaces are inflexible and discourage return to work by people with even minor functional incapacities. Such large numbers would obviously overwhelm current public employment services. No doubt many others would be fearful of entering a job market in which they have almost no reasonable prospect of success, while for others unrealistic expectations would be raised and then disappointment would follow. So perhaps policy aspirations should be rather more modest with a focus on those with a somewhat greater attachment to the labour market.

The fears that many older jobseekers have about their job prospects are not without foundation. Evidence on the effectiveness of employment programs is mixed. In the United Kingdom for instance the New Deal 50 Plus program offers support and advice for people aged over 50 to find work. However, only a fraction of the eligible target group have participated, with those on “active’ benefits far outnumbering those on “inactive” benefits. Overall participant numbers have been declining, suggesting that the effectiveness of the program has not been sustained. If sustainability of employment found via the scheme is considered then it can be viewed as something of a success. But a significant minority of clients feel demeaned by the low wage and unskilled work they often find, with occupational downshifting a problem.

The European Commission has expressed concern that such jobs do not appear to act as a bridge to better work for older people in the way that they seem to for younger ones. The risk is that older people substitute the trap of joblessness for one of low quality work, hardly a positive choice, and with the attendant risks of declining psychological wellbeing, occupational injury and job insecurity, thus an unlikely basis for economic stability into the future. Surveys of older people often find that they would work on in jobs offering some flexibility, but this is probably not what they would have in mind. The Productive Ageing Package may be viewed as important in tone as it signals a shift towards the inclusion of older people, but short on vision and hope as it offers little to most older people of working age who are not currently in the job market.

Security and choice should be placed at the centre of efforts to promote a new vision of later life. For instance, pushing out the age at which one can claim a pension could disadvantage some people, forcing them to remain economically active and, if they lack abilities that are valued in the marketplace or are in poor health, into a form of prolonged unemployment or underemployment (the antithesis of the much vaunted gradual retirement), with the potential for poor quality of later life. Here the aforementioned “lump of labour fallacy” may itself be proved to be a fallacy, many older people forced to compete for jobs with younger Australians and migrant workers, particularly at the lower quality end of the job spectrum. Added to this, for those from lower socio-economic groups who have a shorter life expectancy, setting a later pension age may seriously erode any pretensions they might have harboured about entering a prolonged period of rest after a lifetime’s work. Thus, it is important that an adequate safety net is retained where employment is not an option, which regrettably for many of the current crop of older people of working age, it will. Pronouncements on the need to work late may do little more than stir anxiety among many older people, who may hold a more realistic view of their labour market prospects than do campaigners and policymakers.

What is required instead is a complete strategy for our ageing society, not a piecemeal approach. In this regard a strategy for “active” ageing should be favoured. This would address a much wider range of issues concerning social participation in later life. “Productive” has as its starting point the notion that too many older people are economically dependent on society, whereas the “active” approach recognises the important contribution older people potentially can and do make in different spheres. For instance 23,000 people aged 45 and over are caring for adults in ill health and not seeking work for this reason. Various spheres overlap significantly and efforts to prolong work lives should not proceed without due consideration of how this would affect participation elsewhere.

Notably, the government announcement also speaks entirely about labour supply. But serious questions remain as to whether Australian employers will willingly embrace older workers. Many businesses wishing to retain a competitive advantage may be dismissive of the notion, viewing it as simply too risky a step. Starkly, some age campaigners and policymakers have fallen into the trap of invoking ageist stereotypes in promoting the cause of older workers, making unfounded claims on their behalves, for instance that they are more reliable than younger ones. A sustained education campaign led by industry, which does not rely on employing one set of age stereotypes to challenge another set is much needed. This could usefully draw on the vast reservoir of knowledge that has been accumulated during several decades of research in many countries that has considered the management of older workforces.

Central to the active approach should be the notion of prevention, tackling small barriers before they accumulate to simply become insurmountable and meaning that we move away from designing public policy around such a vague concept as that of “mature age” towards instead a vision of intervening at different points over a working life. Of immediate concern will be to make any active ageing strategy relevant to those many older Australians left behind as the economy has restructured over the last three decades and who have largely been abandoned by generations of policymakers, finding their way into permanent economic inactivity. For them the recent government announcement will likely provide scant consolation as they ponder a future that will contain few of the attributes considered necessary in order to enjoy a successful transition to old age.