A leading social welfare group, the Benevolent Society, is forming a coalition to tackle ageism. It released a report on Thursday which found that age-related discrimination is particularly rife in the workplace, with over a quarter (29%) of survey respondents stating they had been turned down for a job because of their old age, whereas 14% claimed they had been denied a promotion because of their old age.
Alan Williams, 62, is attempting to return to the workforce after nine years of unemployment. After his wife was diagnosed with dementia, he became her full-time carer. He said that now he is willing to return to the workforce, his age appears to be a hindrance.
“You don’t get told officially but I’ve gone for 22 jobs this month and only got two interviews,” he said. “A few others had strict instructions saying that I currently have to be employed”.
Mr Williams had previously been self-employed, running a variety of successful businesses…
Mr Williams said many of his friends had been in a similar situation and had simply given up on looking for work at their age.
“Friends in my age group, over 50, mostly are just doing volunteering work. They applied for several jobs but just didn’t get any.
“I would like a bit more in my superannuation though. I’m happy to work until I’m 75.
“I’m even starting to look overseas so I can get back into the workforce. At least then I’m actually back in the workforce.”
For years the growth lobby and the government has told us that Australia needs to run high levels of immigration in order to alleviate so-called skills shortages and to mitigate an ageing population. This has come despite the Department of Employment showing that Australia’s skills shortage “remains low by historical standards” and Australia’s labour underutilisation rate tracking at high levels:
Economic models are often cited as proof that a strong immigration is ‘good’ for the economy because they show that real GDP per capita is moderately increased via immigration, based on several dubious assumptions.
The most dubious of these assumptions is that population ageing will necessarily result in fewer people working, which will subtract from per capita GDP (due to the ratio of workers to dependents falling).
Leaving aside the fact that the assumed benefit to GDP per capita from immigration is only transitory, since migrants also age (thereby requiring an ever-bigger immigration intake to keep the population age profile from rising), it is just as likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed. This is exactly what has transpired in Japan where an ageing population has driven the unemployment rate down to only 2.8% – the lowest level since the early-1990s:
The ABS last month revealed that more Australians are working past traditional retirement age, thereby mitigating concerns that population ageing will necessarily reduce the employment-to-population ratio:
Clearly, however, there is much further scope to boost workforce participation among older workers.
Rather than relying on mass immigration to fill phantom ‘labour shortages’ – in turn displacing both young and older workers alike – the more sensible policy option is to moderate immigration and instead better utilise the existing workforce as well as use automation to overcome any loss of workers as the population ages – as has been utilised in Japan.
It’s worth once again highlighting that economists at MIT recently found that there is absolutely no relationship between population ageing and economic decline. To the contrary, population ageing seems to have been associated with improvements in GDP per capita, thanks to increased automation:
If anything, countries experiencing more rapid aging have grown more in recent decades… we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita… on the contrary, the relationship is significantly positive in many specifications.
Again, the last thing that Australia should be doing is running a mass immigration program which, as noted many times by the Productivity Commission cannot provide a long-term solution to ageing, and places increasing strains on infrastructure, housing and the natural environment.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
