Fighting retirement | Over the next two decades, four out of 10 Maine workers will be eligible to retire. If they do, we're in trouble.
In August, Barbara Heard started a new job. Like many singles, Heard has had her share of short-term gigs in a variety of fields: She recently left her six-year post as a coordinator-store manager-Girl Friday at the Owl's Head Transportation Museum to take a job as a manager at the Hartstone Inn in Camden. Before Owl's Head, she worked for a year in customer service at MBNA. Before MBNA, she spent over a decade as an education tech in schools in the Rockland area. Work for Heard is as much driven by play as paycheck. She calls her professional travels an adventure.
At 57, Heard plans to spend at least another decade experiencing that adventure.
"I will probably work full-time until I'm 65 or 70," she says. "And then I would probably work part-time in a paid position or a volunteer position. I can't imagine just sitting here. I want to keep working and contributing. I have to stay connected with the community and I believe in working for the community."
Murdoch Buchanan came out of retirement at 76 and began working at L.L.Bean in 2002 because Medicare didn't cover the full cost of his wife's monthly prescription bills. Now 81 and a part-time clerk at the retailer's Freeport store, Buchanan says he'll probably never retire.
"I think that for many elderly people, the cost of living has far exceeded their retirement [savings] and the cost of prescription drugs has gone sky high — it's the whole medical deal," says Buchanan, whose 17-year career as a salesman for Dragon Products Co. in Thomaston ended with a pink slip when he was 52 that terminated his health benefits. Buchanan sued the company in the late 1970s for the promised benefits and won, but the payout wasn't enough to support him and his wife through what has turned out to be a post-career life spanning almost three decades.
Heard and Buchanan are the future of Maine's workforce — bright, educated and old enough to consider retirement. They are people who for financial or personal reasons will — or already do — keep clocking in past the traditional retirement age of 65. One of Maine's biggest challenges is to figure out how to keep the most productive of workers like them from retiring and taking their decades of company know-how with them.
The impending retirement of the baby boomer generation could strike the U.S. economy with a vengeance. According to 2005 statistics from the U.S. Census Bureau, the most recent available, over 77 million Americans in the baby boomer generation will reach retirement age over the next 25 years. If boomer workers — those born between 1946 and 1964 — leave work en masse as some experts expect, Medicaid and other public service bills will skyrocket and companies around the country will suffer. Maine alone will say goodbye to four out of every 10 workers if the boomers and more mature workers like L.L.Bean's Buchanan leave work on time.
That's because, for better or worse, Maine is a popular place to settle into seniority. We have the highest median age in the country — 41.2 years — and the proportion of adults 65 years and older in Maine (14.1%) lands the state fifth in the nation.
"Age is an issue of mind over matter," Mark Twain famously quipped. "If you don't mind, it doesn't matter." Unfortunately, given the proportionate old age of the Maine workforce, age suddenly matters absolutely. And Maine policy makers are finally minding.
The elder dilemma
On August 21, John Richardson, commissioner of the Department of Economic and Community Development, gathered four of the state's older worker advocates into his office to convene what he calls a "working group" on Maine's aging workforce. In June, Richardson, who says he has been concerned about Maine's aging workforce since the 2006 "Charting Maine's Future" study from The Brookings Institution, which cited Maine's aging population as one of its primary economic challenges, attended a meeting of the Council of State Governments that convinced him that Maine couldn't wait to woo its aging workers. At the meeting, Professor Bill Fox of the University of Tennessee presented research that the aging workforce's affect on the national economy could be crippling.
"It's potentially a very critical problem," Richardson says.
Lucky for us, baby boomers appear to like work. According to a 2005 AARP study, two out of five workers age 50 to 65 were interested in phased retirement, meaning work would gradually decrease rather than abruptly stop. But research conducted by the Society for Human Resource Management found that 59% of members surveyed don't recruit older workers and 65% don't do anything to retain older workers, who experts say tend to want flexible schedules, work-from-home options and benefits packages that include health care coverage.
The coastal town of Rockland, which manages to be both quaint and culturally dynamic, has become a popular spot for retirees. Those who find slowing down isn't their cup of tea have also made Rockland a center for the 50-plus working crowd. In Knox County, 18.6% of the working population is aged 55 or older, after Lincoln County (19.6%) and Washington County (19.1%), according to a study released this July by the Maine Department of Labor and the U.S. Census Bureau. (The benchmark for studies on boomers in the workforce begins from 45 to 55, depending on the study.)
Seasoned Workforce, a Rockland advocacy group for workers 50 and older, was founded here in 2002 to research the aging workforce in Knox County and around Maine. Seasoned's job search forums for boomers have attracted more than 300 people this year alone, says the agency's founder Dave Tomm.
"The stories vary from people who really need as much help as possible to people who just need something to do," he says.
John Christie, a former business newspaper publisher and ski resort owner, spent about a week and a half in retirement before getting antsy. After summer stints as a park ranger at Camden Hills State Park in 2001 and 2002, Christie became a career consultant at the Rockland Career Center during the winter of 2002. He was 65.
Christie says the center's demographic tracking shows that 15% of its roughly 700 clients a month are 55 or older. These clients often need to find a job to make ends meet, Christie says, either because they've been suddenly laid-off or they discover their savings aren't enough to sustain them in retirement.
But on the path from retirement to reinventing one's working life, Christie says older job seekers come up against similar roadblocks. Most don't have the technical skills necessary to perform what are considered fairly standard office computer tasks like building a spreadsheet, using the Internet or even sending email. Heard, who has a bachelor's degree in English, once stopped an interview halfway through when she realized a position as an office manager involved working on a computer.
Most want part-time, flexible schedules that allow for quality time with family. Manual labor jobs are often impractical given their age. And Christie says the biggest challenge is often in his clients' heads — most don't think they don't have the skills necessary to get a new job late in life.
"A lot of older people have done one thing their whole life," says Christie. "When a company like Sylvania shuts down, we get 70 or 80 people, many of whom have been there for 20 or 30 years."
Christie says some businesses like Home Depot, the temp agency Manpower, Hannaford supermarkets and L.L.Bean, which in 2006 was named one of the best businesses for workers over 50 by the AARP, get older workers. They allow flexible schedules and have designed training programs that cater as much to experienced workers as to 20-somethings fresh out of school. But many more businesses in Maine overlook the boomer and mature sets.
Phyllis Cohn, communications director for AARP Maine, says her office is "desperately trying to involve businesses" in recruiting and retaining older workers, but so far the business response has been tepid. At a June forum on the issue at the Augusta Civic Center, Cohn says only 50 employers and human resource representatives showed up.
"I liken this issue to global warming about 10 years ago," says Cohn, who along with Christie co-chairs the Older Workers Committee for the Maine Jobs Council, a state agency that aims to develop the Maine workforce. "People didn't want to talk about it and start doing anything about it yet. Businesses aren't ready to even look at the management changes that could be made to accommodate older workers."
A warning call
But, as the adage goes, time waits for no man. In 2000, according to the U.S. Bureau of Labor Statistics and the U.S. Census, about 18.4 million workers in the labor market were age 55 or older — 13% of the total labor market. By 2015, that number will jump to 31.9 million, 19.6% of the market, all while the number of workers in their traditional prime productivity years — ages 25 to 44 — will drop proportionally. The aging of the workforce is a global phenomenon — Europe, for example, is also struggling to address an aging workforce.
Here at home, our gray hairs are showing. A sizeable 15.5% of the Maine workforce in 2004 was aged 55 or older, according to the Maine Department of Labor and the U.S. Census Bureau, and if we include data on workers age 45 to 54 (the youngest baby boomers turned 40 in 2004), slightly less than 40% of the Maine workforce is primed for retirement in the next two decades.
To thicken the plot, the entire state is getting older fast. All of Maine's sixteen counties experienced an increase in the percentage of their workforce age 55 and older from 2001 to 2004. The largest increase was in Lincoln County, which watched its proportion of older workers grow from 14% in 1996 to 19.6% in 2004.
While most would agree that Maine workers who have reached their 70s or 80s are entitled to opt for full retirement, tapping the productive desires of people well into their 60s can translate into real dollars. An analysis by Business Week magazine found that engaging older Americans in the labor force could add nine percent to the country's gross domestic product by 2045. That would equal an additional $3 trillion in economic output, in 2005 dollars.
As always, competition for resources with other states facing the same boomer bust will likely be Maine's biggest challenge. Maine will still have to fight to attract young workers and also adjust to recruit and retain the best older workers.
"In general, rural areas are highly challenged by this problem because of the derivative trend of young people moving into urban areas and leaving mostly older people in rural areas," says Jim Emerman, executive vice president of Civic Ventures, a San Francisco think tank and incubator dedicated to engaging seniors in work and volunteerism around the country.
Maine's graying worker pool will disrupt some business owners' sleep more than others.
"What we do know is there are some industries and certain occupations that because of the age distribution in the workforce, in some of those occupations you might say they're more vulnerable to this demographic shift," says Marcie Pitt-Catsouphes, director of the Center on Aging and Work/Workplace Flexibility at Boston College.
Pitt-Catsouphes cites data from a U.S. Census Bureau study that will be released later this year that found a number of Maine industries with significant portions of their workforce middle aged or older. According to Pitt-Catsouphes, 64% of Maine's legal workers, including its lawyers and legal assistants, are aged 45 or older. Almost 49% of the state's installation and maintenance workers — an industry Pitt-Catsouphes says traditionally relies almost exclusively on homegrown talent — are 45 or older. And Maine's business managers? About 48% of you should probably start shopping for that condo in Miami.
Other vulnerable Maine industries, according to the U.S. Census, include electrical equipment manufacturing, public administration, paper and pulp manufacturing and education.
"If everything was business as usual," says Pitt-Catsouphes, "that is, if [employers were] not trying to recruit more young workers or retain older workers, those industries and those occupations could find themselves in a bit of a pickle."
Coming into focus
But if more baby boomers want to keep working to stay "connected with the community," as Barbara Heard says, and employers want them to stay, what's the problem?
Even though more boomers want to work longer than members of previous generations, studies show that only about a quarter of boomers actually push back retirement, which leaves places like Maine still facing a dearth of thousands of workers over the next decade. Industry and policy leaders will need to work together to alter government and industry policies to encourage older workers to keep clocking in.
The DECD's Richardson hopes his newly convened working group, which includes Phyllis Cohn of the Maine AARP, will be able to reach out to industry leaders and gather scattered national and local studies on the aging workforce into a comprehensive picture of where the state's economy is aging, how it relates to national trends and what can be done about it. Part of Richardson's challenge is to find out what's going on in his own backyard: Several new projects to engage Maine's older workers and retirees are operating independently of one another, including the Maine Community Foundation's grant to engage Maine seniors in meaningful volunteerism and the Department of Health and Human Services project with other states to develop policy to retain and recruit older workers.
"Certainly, we're at the beginning stage of how we formulate our policy" on this issue, Richardson says. The working group plans to meet again this September.
Heard is one of the many workers that would benefit from Maine policies catering to the needs of older workers, particularly those that would improve access to health care. While Heard calls health insurance "the most important thing" when it comes to choosing a job, her new position at the Hartstone doesn't include benefits. She may receive insurance and other benefits after her six-month review this winter, but that's not guaranteed. That means Heard will hang on to her individual plan through Anthem Blue Cross and Blue Shield, with its $5,000 deductible and $350 monthly bill. For Heard, paying for insurance is part of her working adventure. In six years, she hasn't been able to find a job that offers health insurance.
What would she say to business owners that will soon fight for workers like her?
"I would certainly be giving us the benefits we need," she says. "Health insurance being the number one."
Whether industry and state leaders listen to workers like Heard remains to be seen. Meanwhile, the clock keeps ticking.
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