Graham

“Gray Matters:” Drilling Down: 

“Gray Matters:” Drilling Down Economic and Demographic Forces Shaping the 21st Century workplace that will Make You “Wanna Dance” or Cry. Presented at: Managing the 21st-Century Workplace: Values and Impact of the Older Worker University of Indianapolis May 18, 2006 Graham S. Toft GrowthEconomics, Inc. graham@growtheconomics.com 941 383 0316 This presentation is one of a “Next Dance” series by GrowthEconomics tailored for learners, communities, states, industries and organizations as as they seek to transition to the 21st century Idea Economy.

Outline: 

Outline Do You Wanna Dance? Some Economic and Demographic Forces. Update Your 2006 – 2050 Calendars. Next Dance for Winning States. Gray Matters: Drilling Down to the States Preliminary Employer Survey Results Repeat: Do You Wanna Dance?

1. Do You Wanna Dance?: 

1. Do You Wanna Dance? You, your relatives, friends, forbears have been on a fabulous economic ride the past 60 years, since WWII. You have enjoyed the fastest growth in economic prosperity of any economic power in human history. You have rocked, rolled, discoed, rapped your way to wealth creation, high income, longevity and super-power status.

1. Do You Wanna Dance? (cont.): 

1. Do You Wanna Dance? (cont.) But not all had the right dance steps: Notable class, occupational and racial disparities. Poverty remains as intractable as in President Johnson’s “Great Society”. Prosperity of states / regions has varied markedly: Some states have been “reinventors”: MA, MD, NJ, CT, MN Some states have become “break-aways”: NH, VA, ND, TN, VT Some states have become “endangered”: IN, IL, MI, OH

1.1 Do You Wanna Dance? (cont.)Indiana Economic Context: 

1.1 Do You Wanna Dance? (cont.) Indiana Economic Context Indiana has been underperforming: Performing below U.S. average in per capita income growth for decades. Consistently gets C grades in Indiana Chamber of Commerce’s Vision 2010 Report Card. Unsatisfactory grades in workforce preparedness but improving: 2005 2003 2001 C D+ D

1.1 Do You Wanna Dance? (cont.)Indiana Economic Context: 

1.1 Do You Wanna Dance? (cont.) Indiana Economic Context Great promise for the U.S., its states, regions to continue economic growth, but most are not preparing well. What is changing? The Dance Hall: The Party Goers: The Music: The Winning Dance Partners: The New Steps: Now global More diverse and aging Competition, competition Highly collaborative Agility and flexibility (of workers, firms, communities, governments) The longevity revolution The next 50 years are shaping up to be very different, very exciting.

1.2. Do You Wanna Dance? (cont.)Some Economic and Demographic Forces: The Longevity Revolution: 

1.2. Do You Wanna Dance? (cont.) Some Economic and Demographic Forces: The Longevity Revolution The end of 50 years of “Dream Demographics”; boomer workers / consumers, female participation rates, gains in educational attainment, immigration. The next 50 years, a different “Dream Demographics”: fewer, but highly talented, 25 – 36 year olds; labor productivity growth; routine work off-shore; lots of creative work left in the U.S; end of retirement as we know it - - productive aging; immigration of skilled, talented workers to U.S.

1.2. Do You Wanna Dance? (Cont.)Some Economic and Demographic Forces: 

1.2. Do You Wanna Dance? (Cont.) Some Economic and Demographic Forces Will U.S. Face a Labor shortage? NO! Shift of low return jobs offshore Improving productivity of all workers (innovation really matters!) More labor force participation from disabled workers, Ex-offenders, etc. (social policy matters) More immigrants to fill growing number of low-pay and high-pay jobs (H1-B policy matters, in addition to resolving illegal immigration). Extended work life, especially by knowledge / information workers.

1.2. Do You Wanna Dance? (Cont.): 

1.2. Do You Wanna Dance? (Cont.) “Its not pensions that need fixing so much as the workplace” The Economist, Nov. 26, 2005

1.3. Do You Wanna Dance? (cont.)Update Your Calendars: The 2006 – 2050 Boomer Calendar: 

1.3. Do You Wanna Dance? (cont.) Update Your Calendars: The 2006 – 2050 Boomer Calendar 2006 First boomers reach 60 2011 First boomers reach 65 2012 First boomers can take out full Social Security. 2024 Last boomers reach 60 2029 Last boomers reach 65, first boomers 83 2030’s – 2040’s Geezer heaven! (at 2049 last boomers 85) 2050 Global pop. 9 billion, approx. ¼ of pop. is “old,” including China.

1.3. Do You Wanna Dance? (cont.)Update Your Calendars : 

1.3. Do You Wanna Dance? (cont.) Update Your Calendars 2006 Child born today 2024 Child graduates from high school 2029 Child graduates from college. 2030 – 2050 The Zoomers must pay for college, support themselves in an elder – centered society, pay high Soc. Sec. taxes to support the aging population, pay down the growing national debt, contend with innovation competition from 2 – 3 other super power economies (India, China,?) Zoomer generation must be much more productive, focused and agile.

1.4. Do You Wanna Dance? (cont.) Winning States: 

1.4. Do You Wanna Dance? (cont.) Winning States Create life-long learning accounts NOW! SLAM Accounts (Save, Learn ‘n Make It) from birth, upon naturalization; modified Coverdell Savings Accounts. End Senior High School as we know it (apply the glaring findings of 40 years of educational psychology). Aggressively create youth, young adult and early retiree entrepreneurship opportunities.

1.4. Do You Wanna Dance? (cont.) Winning States: 

1.4. Do You Wanna Dance? (cont.) Winning States Incentivize / extend use of employer-based tuition reimbursement programs as part of SLAM Accounts - - workers of all ages. Reduce the unit costs of education and training (dramatic productivity improvements in learning) Create conditions for productive aging; Extend the work life of 55 – 80 year old workers by solving health care coverage. (Medicare E?)

2. Gray Matters: Drilling Down to the States.: 

2. Gray Matters: Drilling Down to the States. Two Dimensions How “old” is a state becoming How economically productive are its aging residents

2. Gray Matters: Drilling Down to the States. (cont.): 

2. Gray Matters: Drilling Down to the States. (cont.) Define “how old” with 4 metrics: Future gray population (absolute change, 2005 – 2030.) Change in median age, 2005 – 2030 Rate of change of 55+ population to school-age population, 2030 projection. Net older migration, 1995 – 2000. Metrics aggregated into an “aging score”: “Gray Trailers” and “Gray Leaders” Indiana is a trailer

2. Gray Matters: Drilling Down to the States. (cont.): 

2. Gray Matters: Drilling Down to the States. (cont.) Define “active aging” with 13 metrics General Activity: 7 metrics Gray Talent and Entrepreneurship: 6 metrics. Focus: Economic contribution / non-contribution, volunteering, learning, skill / talent, income, self-employment These were aggregated to give an ”active aging score”: “Active Aging Trailers” and “Active Aging Leaders.” Indiana is a trailer

2. Gray Matters: Drilling Down to the States. (cont.): 

2. Gray Matters: Drilling Down to the States. (cont.) General conclusion Indiana has more time to adjust than the rapidly graying states, like Maine and Florida. But its graying population is not as “active” as in many other states. This has significant consequences for labor force supply in light of slowing supply of younger workers.

3. Preliminary Results: Employer Survey: 

3. Preliminary Results: Employer Survey Phase II of CAC Research and Discovery Employer Survey (statewide, over 50 employees). Employee Survey by AARP. Focus Groups. Interpretation of findings. Top Level Dialogue - - implications for Indiana policy and practice.

3. Preliminary Results: Pop Quiz: 

3. Preliminary Results: Pop Quiz What occupations are most difficult to replace, due to retiring staff? Hourly workers? Professional, technical, scientific workers? Managers, middle / upper-level? Front-line supervisors / managers?

3. Preliminary Results: Pop Quiz: 

3. Preliminary Results: Pop Quiz Faced with pending retirements, how well do you think Indiana employers do the following? Train others to help do the job? Offer incentives to delay retirement? Offer alternative work arrangements, e.g. part-time schedule? Offer “sabbatical” arrangements to upgrade the graying worker?

3. Preliminary Results: Pop Quiz: 

3. Preliminary Results: Pop Quiz How would you rate older workers on: (very good to very poor) Willingness to learn new technology? Willingness to try new approaches to problems? Willingness to participate in training / retraining? Orientation towards customer service Ability to pass drug test? A reliable performance record?

3. Preliminary Results: Wrap Up: 

3. Preliminary Results: Wrap Up A key finding, so far: Indiana company respondents acknowledge a “major amount” of knowledge loss occurs when an employee retires and believe it is important to retain the knowledge and experience of retiring employees. But are only “somewhat concerned” about pending retirements. So what alternatives do they have in mind?

3. Preliminary Results: Wrap Up (cont.): 

3. Preliminary Results: Wrap Up (cont.) Next Steps: Complete employer survey and analyses by summer AARP follow-up employee survey Match up the findings.

Slide24: 

“The age factor means nothing to me. I’m old enough to know my limitations, and I’m young enough to exceed them.” - - Marv Levy, at 80 after being named General Manager of NFL’s Buffalo Bills 4. Repeat: Do You Wanna Dance?

Slide25: 

But Remember “If you give up fine wine, coffee, chocolate and sex, you may not actually live and work longer, it might just seem longer!” Enjoy the ride to 100 and beyond! (If not you, certainly your kids / grandkids.) 4. Repeat: Do You Wanna Dance? (cont.)

Discussion: 

Discussion Graham S. Toft, Ph.D. GrowthEconomics, Inc. graham@growtheconomics.com 941 383 0316