[Senate Hearing 108-746]
[From the U.S. Government Publishing Office]
S. Hrg. 108-746
BREAKING THE SILVER CEILING:
A NEW GENERATION OF OLDER AMERICANS
REDEFINING THE NEW RULES OF THE WORKPLACE
=======================================================================
HEARING
before the
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC
__________
SEPTEMBER 20, 2004
__________
Serial No. 108-43
Printed for the use of the Special Committee on Aging
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SPECIAL COMMITTEE ON AGING
LARRY CRAIG, Idaho, Chairman
RICHARD SHELBY, Alabama JOHN B. BREAUX, Louisiana, Ranking
SUSAN COLLINS, Maine Member
MIKE ENZI, Wyoming HARRY REID, Nevada
GORDON SMITH, Oregon HERB KOHL, Wisconsin
JAMES M. TALENT, Missouri JAMES M. JEFFORDS, Vermont
PETER G. FITZGERALD, Illinois RUSSELL D. FEINGOLD, Wisconsin
ORRIN G. HATCH, Utah RON WYDEN, Oregon
ELIZABETH DOLE, North Carolina BLANCHE L. LINCOLN, Arkansas
TED STEVENS, Alaska EVAN BAYH, Indiana
RICK SANTORUM, Pennsylvania THOMAS R. CARPER, Delaware
DEBBIE STABENOW, Michigan
Lupe Wissel, Staff Director
Michelle Easton, Ranking Member Staff Director
(ii)
C O N T E N T S
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Page
Opening Statement of Senator John Breaux......................... 1
Statement of Senator Larry E. Craig.............................. 3
Statement of Senator Orrin Hatch................................. 8
Panel I
Hon. John Glenn, Former U.S. Senator, The John Glenn Institute,
Columbus, OH................................................... 6
Jack Valenti, former president, Motion Picture Association of
America, Washington, DC........................................ 10
Panel II
Ken Dychtwald, president and chief executive officer, Age Wave,
San Francisco, CA.............................................. 16
Sharon A. Brangman, M.D., professor of medicine and division
chief, Geriatric Medicine, SUNY Upstate Medical University,
Syracuse, NY, on behalf of the American Geriatrics Society..... 40
Douglas C. Holbrook, vice president/secretary-treasurer, American
Association of Retired Persons, Washington, DC................. 47
Victoria Humphrey, executive direction of Human Resources,
Volkswagen of America, Inc. and Volkswagen Canada, Inc., Auburn
Hills, MI...................................................... 76
Edward E. Potter, president, Employment Policy Foundation,
Washington, DC................................................. 81
APPENDIX
Statement of Emily DeRocco, Assistant Secretary of Labor,
Employment and Training Administration......................... 109
(iii)
BREAKING THE SILVER CEILING: A NEW GENERATION OF OLDER AMERICANS
REDEFINING THE NEW RULES OF THE WORKPLACE
---------- --
MONDAY, SEPTEMBER 20, 2004
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The committee convened, pursuant to notice, at 2 p.m., in
room SD-628, Dirksen Senate Office Building, Hon. Larry Craig
(chairman of the committee) presiding.
Present: Senators Craig, Breaux, Hatch, and Kohl.
OPENING STATEMENT OF SENATOR JOHN BREAUX, RANKING MEMBER
Senator Breaux [presiding]. The committee will please come
to order. Good afternoon, everyone, and welcome to this hearing
of the Senate Special Committee on Aging. We are glad we have
so many guests for this very important hearing this afternoon.
We are here to talk about how older Americans are breaking
the silver ceiling in our nation's workplace. Since 1985, there
has been an upturn in the number of older Americans who are
choosing to work past the age of 65. These people are better
educated, they are healthier, they are living longer than
previous generations. They aren't ready to sit in a rocking
chair just because they happen to be 62 or 65 years of age.
However, over the past 50 years, both corporate and Federal
policies have encouraged workers to leave the workforce as
early as possible. Social Security benefits allow people to
retire as early as 62, with normal retirement age currently at
65. Today, 75 percent of Americans apply for Social Security
benefits at age 62. Companies built their pension plans to
favor early retirements and to encourage the hiring of younger
workers. I say that it is time to reevaluate these outdated
policies because they do not reflect modern society.
We have millions of talented, healthy, and energetic older
Americans who want to keep on working, and it is a good thing
that our older Americans want to work because there is a labor
shortage looming in our country. As baby boomers reach
retirement age in a few years, the economy will start to
experience negative effects of mass retirements. There will be
fewer younger workers to fill the mass vacancies of the older,
experienced workers.
The rate of workforce growth peaked in the 1970's at nearly
30 percent. However, it is now at 12 percent and expected to
drop to less than one-fourth of 1 percent by the year 2020.
Even if we increase immigration significantly, we would still
need millions of older workers to remain in the workforce.
Right now, this is still what I would call a sleeper issue
and much of corporate America has not recognized the need to
retain and recruit older workers. Some companies have, and they
are listed in AARP's list of top employers for workers over the
age of 50. Many older workers want to work part-time or on and
off throughout a particular year. They want to telecommute.
They want to continue to provide services where they can, even
on a part-time basis. Benefits like retraining, elder care
locator services, and time off to care for relatives are
important to them.
Phased retirement is a concept that sounds appealing to
most workers, but as we will hear today at this hearing, it is
still more of a concept than a reality due to Federal
obstacles.
I strongly believe that it is time our country's labor and
pension policies reflect the new health and dynamism of older
Americans. Let us break down these barriers and move past
ageist stereotypes to allow more Americans to achieve their
potential no matter what age.
I would point out that as I look forward to changing
careers, as opposed to retirement in my own profession, this is
an area that I become more and more interested in each day.
Indeed, I am very typical, I think, of millions of Americans as
they look to new and different careers and they do not want to
just sit on the porch and rock. They want to be involved, and
we need their services and we, as a government, need to make
sure that there are not governmental and legislative
impediments toward them being able to look at new and exciting
second, third, and even fourth careers in their lives. They
have very valuable services that they can offer to our country.
With that, I would like to recognize Senator Craig. We
share duties. He has been very kind. This is the only
committee, I think, in the entire U.S. Senate where we actually
both serve as chairman, depending on the hearing, and Chairman
Craig has been very, very generous in that because he agrees
with me that this question of aging is neither Republican nor
Democrat. We age equally, and this committee has been run in
that fashion and I thank him for that. Senator Craig.
OPENING STATEMENT OF SENATOR LARRY CRAIG, CHAIRMAN
The Chairman. John, thank you very much. For those of you
who were confused for a moment, please don't be. John has just
explained the method by which we operate the Special Committee
on Aging. We tradeoff depending on issues that we are
individually or collectively interested in as to who is
chairing the hearing, because as John has pointed out, I am
much younger than he---- [Laughter.]
But I would never challenge him in a game of tennis.
[Laughter.]
But I am going to add my comments to the hearing for the
record, Mr. Chairman, and why I have asked for the microphone
is to say something about a fellow legislator who has spent a
good deal of his time serving us and serving the country, and I
am talking about my colleague, John Breaux.
The valuable contribution that he has rendered for the good
citizens of Louisiana, but as importantly for the country, is
testimony to a great leader and one that I view as John Breaux,
the senior Senator from the State of Louisiana.
It is even more unfortunate that the English language is
always found wanting when one desires, I think, to give a
proper tribute. However, I hope that you will accept these
words of recognition, John.
John Breaux, you are Louisiana's, I think it is pronounced
``lagniappe.'' That is Cajun for gift to the country in general
and to the Senate in particular. Your reputation for honesty
and political integrity and hard work were matched in your
stellar 32 years of service here in Congress only by your
renowned political acumen, keen legislative judgment, and good
and sincere heart for all our nation's citizens.
It has been my pleasure to serve with you such as you have
demonstrated here today that we found ourselves very willing to
work together and to share the responsibilities of this
committee.
We share in common the first humble legislative beginnings
in the House. While we were in the House, recognizing its
importance, for some reason, we aspired to the Senate. In that
time, I had the opportunity to watch John's leadership. I was
in the minority and I recognized his talent then, and, of
course, in the Senate he has continued to serve this country
extremely well.
While your retirement from service in the Senate I think is
a sad note, I think we are all happy for you and wish you
success in a new and challenging life. We are going to hear
from some folks today who have retired more than once in life,
only to go on to greater careers and greater achievements for
themselves and for mankind, and I think that, John, you have
that in your future.
So while you will continue to contribute and while I want
to assure you that you leave behind respect and admiration and
a deep gratitude from all of our colleagues and our staffs and
our friends here in the U.S. Senate, your work has been
exemplatory and we appreciate it all a great deal.
Now, he reached over and took the gavel away from me today
and I don't want him to go wanting for a gavel. So what I have
done, or more importantly, what I should say, the staff, the
joint staff of the committee has done is made sure that John
Breaux doesn't want for a gavel in a future life.
Senator John Breaux, Special Committee on Aging, 1985
through the year 2000, John. Here you are. Let me put this in
right so we can grab a picture of it. Here you go.
Senator Breaux. Thank you, Larry.
The Chairman. Absolutely. [Applause.]
Now I will get out of the way and let him chair the
committee.
Senator Breaux. I will give you the old one back.
The Chairman. I got my gavel back! [Laughter.]
All right. That one is not to be dented. Here. You had
better use this one. This may be a raucous hearing today.
Anyway, Mr. Chairman, thank you very much, and I will yield
back the balance of my time and ask my full comments be a part
of the committee record.
[The prepared statement of the Chairman follows:]
Prepared Statement of Senator Larry Craig
Good Morning. All too often we come together to discuss a
multitude of problems affecting senior Americans. On this
Committee we get heavily involved in such weighty questions as
the cost and benefits of medicare, health care in general and
nursing home care in particular and concerns with social
security. We are, because of our mission, often times consumed
by the study of these problems and overlook the invaluable
contributions seniors give to our country.
Senior citizens seek to live comfortably in their advancing
years as well as meet the rising financial costs associated
with medical care and everyday living expenses. As our
population ages we are seeing trends where people in their
senior years yearn to continue participation in our country's
vibrant economy so as to meet their needs. Therefore, we need
to focus our attention on these trends and to study the value
of the contributions made by seniors in our workforce. I
commend Senator Breaux and his staff for what they place on our
oversight table today for public consideration.
I want to thank all of our witnesses for being here today.
This a most important inquiry and I look forward to hearing
your testimony.
Senator Breaux. Thank you so very much. I really do
appreciate it. It was a surprise. I am delighted. It will be
something that will always be a reminder to me of the work that
we did on this committee together. If other committees had the
opportunity to have that same type of rapport, I think the
Congress would indeed be a much better place. So I thank you
for your cooperation and your friendship.
We are very delighted to be able to welcome this afternoon
two outstanding and very distinguished Americans to be our
first two witnesses this afternoon. The first is our former
colleague and dear friend, John Glenn. I note that Annie, his
wife, is in the audience. Annie, we are delighted to have you
with us, as well. I understand Annie's sister is also here, so
we are delighted to have both of you as well as to have John.
Everyone knows that--all of us in this Congress, and indeed
this country, know that John Glenn is truly a national hero, a
person who has served his country and continues to do so, a
military Marine, an astronaut, United States Senator, and now
continues his work of public service as a public service
advocate and so well respected.
He came to the U.S. Senate from Ohio in 1974. He served
here for 24 years and did something extraordinary and so
unusual when he volunteered and went back into space at the
tender age of 77 something that men half his age did not have
the capacity to do. That was a 9-day Discovery shuttle mission
where he worked just as hard as any other astronaut and made
great contributions on that very important mission. But as
important as the science was on the mission itself, it sent a
signal to the people of this country that we are still capable
of performing outstanding duties at whatever age you happen to
be.
It is interesting that Senator Glenn was talking with
Elaine on our staff, who had worked with him and now works with
us on the committee. John Glenn served on this committee, on
the Aging Committee, and very important service it was, as
well.
He is now an advocate for public service and public policy
through his platform at Ohio State University, where he
presides over the John Glenn Institute. It is indeed a pleasure
for this committee to welcome you, John. Please come up and
take your place at the witness table.
I would like to, at the same time, present another
legendary figure in our nation, a man who has also led several
different lives, and each one of them has been more remarkable
than the previous one, and that is Jack Valenti. Jack served as
a World War II bomber pilot with great distinction. He has had
his own advertising agency, which he founded. He was an
outstanding political consultant. He has been a special White
House Assistant to President Lyndon Johnson, of which he truly
is a legendary expert in that administration and the things
that President Johnson did.
He is also an outstanding leader in one of the most
important industries in our country, and that is the motion
picture industry, where he has led that industry with great
distinction around the world, and particularly here in the
Congress. He held that post for 38 years until recently, but he
still remains chairman and chief executive officer of the
Motion Picture Ratings Association, which he started, and still
is so very important.
Most recently, I noted that Jack was in Paris where the
French government conferred upon him the very highly prized
honor of the French Legion of Honor Award.
In addition, he is also president now of the Friends of the
Global Fight for AIDS, Tuberculosis, and Malaria, and he has
also been awarded something that is very unique and very
special, his own star on the Hollywood Walk of Fame, something
a lot of us wish we could do, but it is not in the cards.
[Laughter.]
Senator Breaux. We welcome both of these gentlemen, and
Jack, if you would come up to the table.
I really just ask both of them, because they sort of
epitomize what we are talking about, how you can have a second
career, how you can have a third or even fourth career, and how
you can still be a very valuable contributor to society that
people can learn from. There are no finer two witnesses than
both John Glenn and Jack Valenti.
John, Senator, if you would like to go ahead and get
started.
STATEMENT OF HON. JOHN GLENN, FORMER U.S. SENATOR, THE JOHN
GLENN INSTITUTE, COLUMBUS, OH
Senator Glenn. Thank you, John, very much. Thank you, and
let me add my congratulations to you, too, for the long service
on this committee. I know how you feel because I was on this
committee for 24 years. I requested it throughout my whole
Senate career. I asked to go on the committee when I came here,
requested it because of problems I had seen in my own
background, my parents and some of the difficulties when they
were elderly and had cancer and some things like that. So I
asked to go on this committee because I wanted to get into some
of those matters and I was on the committee for 22 years.
Elaine, you already pointed out back here--hold up your
hand. That is Elaine Dalpiaz, who started out on my staff and
is now with your committee full time. Diane Lifsey, back over
here, Diane was my staff member on this committee for 22 years,
so she has been on this subject for a long time and is still
working in this particular field in the private sector now.
She reminded me that the Senate Special Committee on Aging
has a long history of looking at older worker issues, because
over 20 years ago, we held a series of hearings called ``Work
After 65: Options for the 80's.'' As part of this series, I
chaired a hearing on April 30, 1980, that was titled, ``How Old
is Old? The Effects of Aging on Learning and Working.'' So
maybe the farther we go, the more things stay the same.
It is time, though, we did something about older workers.
We have been into this issue for a long, long time. As part of
that series, I chaired that particular hearing, and Dr. Robert
Butler, who was then the head of the National Institute of
Aging--he was the founding Director of the National Institute
of Aging, part of NIH--and other witnesses discussed ways to
gain a better knowledge of older persons' capabilities so they
would be encouraged to participate and contribute in meaningful
ways.
I will quote one of my own comments from that hearing.
It said, ``With our unemployment statistics as high as they are
today, it is hard to imagine the time when our society will
depend more on older workers, but we will. As the birth rate
declines and the aging segment of our population increases, our
workforce will depend more and more on older workers for
reinforcement.''
That was from 1980, in those hearings a long time ago, and
we are still here and I think it has become more urgent than
ever that we now do something about this and recognize the
situation we are in.
I was asked by the letter I received from the committee to
specifically comment on a couple of things about my experiences
as a Senator and running for President past the age of 65, the
Space Shuttle Discovery mission and that experience. That can
get into so much detail, I think rather than try and use up my
allotted 5 or 6 minutes we can get to that in the questions.
I would just say I wanted to put to lie, though, some of
the rumors that went around after my last space flight in 1998.
I was 77 at the time of that flight, and I wanted to make sure
everyone understood that it was not true that NASA would not
let me go out on the spacewalk because they were afraid at my
age I might wander off someplace. [Laughter.]
It also was not true--the rumor went around that time--that
I was the oldest male to ever leave Florida in something other
than a Winnebago, and that is not true, either. [Laughter.]
But it was a great experience and I will just say how it
happened. Then we can go on with Jack's statement and get onto
whatever you want to discuss. I was preparing for some of the
NASA debate on the Senate floor back in those years and it
struck me that some of the things that happen to younger
astronauts up in space are the same things that happen as part
of the natural process of aging right here on earth.
Your body's immune system changes, for instance. You become
less resistant to disease and infection. Osteoporosis sets in
up there, even with the younger astronauts. The body's ability
to replace protein in the muscles changes dramatically, and,
that changes here on earth just part of the routine of getting
old.
When astronauts come back from orbit, they recover within a
short period of time, depending on the mission. The mission
that we were on as part of the Discovery flight in 1998 was 9
days, which is not one of the lengthier missions but it is long
enough for these changes to start happening. Osteoporosis sets
in, also, after 5 or 6 days in orbit.
The younger astronauts recover over a period of a week or
10 days or something like that. The objective of my going up in
space and the purpose of it was not just to give an elderly
Senator a ride in space, which I would have welcomed anyway,
but to really do research in these particular areas to see what
impact the space experience would have on somebody who had
already experienced immune system and the protein changes and
other changes. Would it be additive? What would be different
about it?
The ultimate objective was to try and find out what within
the human body turns these systems on and off so that maybe we
could find a clue as to why this happens and maybe increase the
body's immune system. What would that do with regard to disease
and age and cancer and things like that if we could find within
the human body what turns your immune system up and down? Could
we find something that would give us a clue as to how we could
affect changes right here on earth and maybe make people more
resistant to disease than we are right now. We were looking for
the same thing with osteoporosis and protein replacement in the
muscles and so on. That was the real reason for being up there
on the flight.
It was a lot of work that year. I was back and forth to
keep up with my Senate work and to be here any time there was
going to be a close vote in the Senate that might require my
vote. I had made a commitment here in the Senate, of course, to
honor that and fly back here, which I did. I didn't have to do
it very many times. It was a long year, a very busy year, but I
found at the age of 77 then that I could keep up with the
younger astronauts. I wish that I had started flexibility
training about 30 years before that because I found going
through hatches difficult. Where they bent over and went
through, I had to slide down on my tail end and slide through.
It was very difficult sometimes like that, and they used to kid
me about it some down there, too.
But we were able to keep up all right and do all the
experiments. On that second flight, we had some 83 different
research projects on board in addition to the half-dozen that
were being done on me personally. So it was a very busy time
period and very different from the first flight back in 1962,
our first earth orbit.
I think that probably is a little more than my 5 minutes,
and so I will be glad to answer any questions after Jack's
statement.
[The prepared statement of Senator John Glenn follows:]
Prepared Statement of Senator John Glenn
As part of this series, I chaired a hearing, ``How Old is
`Old'? The Effects of Aging on Learning and Work.'' Dr. Robert
Butler, who was then head of the National Institute on Aging,
and other witnesses, discussed ways to gain a better knowledge
of older persons' capabilities so that they would be encouraged
to participate and contribute in meaningful ways.
At the time of this hearing in April 1980, I commented,
``With our unemployment statistics as high as they are today,
it is hard to imagine the time when our society will depend
more on older workers. But we will. As the birth rate declines
and the aging segment of our population increases, our work
force will depend more and more on older workers for
reinforcement.''
Now, 24 years later, we must renew our efforts to meet the
challenges and opportunities presented by our increased
longevity. We need the skills and expertise of older workers to
benefit all society, including our children and grandchildren,
as our population continues to age.
As we are discussing today, it is important to provide
opportunities and incentives for today's older Americans and
the baby boomers who are nearing retirement to continue to
work, if they choose to do so, for personal and/or economic
reasons.
In addition, older workers will benefit Social Security as
they continue to contribute to the trust funds and the growth
of our economy. The extent to which older workers chose to
remain in the labor force could have a large impact on the
economic projections that are made regarding Social Security's
long-term solvency.
That is one more reason we should be very careful about
making changes to the current Social Security program, one of
our country's most successful income protection programs.
Senator Breaux. Thank you very much, Senator Glenn.
I notice we have been joined by Senator Hatch. Orrin, do
you have any comments now?
STATEMENT OF SENATOR ORRIN HATCH
Senator Hatch. Thank you, Mr. Chairman. I am so happy to
see you in that seat, although it is for this limited time. I
want to start off by expressing my regard for you and all the
great work that you have done here in the U.S. Senate. It has
been terrific. We are all going to miss you and we are going to
wish you the very, very best. I understand this is the last
hearing you will be chairing, and I appreciate you and Larry
and the work that you are doing on this committee.
I also appreciate these two wonderful men. John Glenn, no
question about it, has been a hero to everybody in America. We
miss you around here, John, but I know that you have gone on to
better things.
Jack Valenti, it doesn't get any better than Jack. I think
the Motion Picture Association has been greatly blessed all
these years to have you as their leader. Of course, you have
done so many important things for many, for millions and
millions in this world with regard to making sure that that
organization was run properly and has very lasting value.
Both of these wonderful men are friends of all three of us
up here and we admire both of you very much. We admire what you
are doing here for senior citizens and for others and we wish
you both the best in your respective careers as you continue
on.
But I want to thank you, Mr. Chairman. We are going to miss
you around here. We think the world of you and we will look
forward to seeing you again.
[The prepared statement of Senator Orrin G. Hatch follows:]
Prepared Statement of Senator Hatch
May I start off by expressing my gratitude to Senator John
Breaux for his invaluable contributions to this Committee, and
for his distinguished career of 18 years in the United States
Senate. Thank you.
I am pleased that today's hearing will examine the issue of
retirement against the backdrop of a tend of older Americans
staying in the workforce past the age of 65.
Mr. Chairman, it seems to me that the message of this
hearing is that the aging of the Baby Boom Generation is going
to transform retirement in America as we know it and that the
tax, pension, and labor laws in this nation need to be examined
and adjusted so they encourage, rather than penalize, older
Americans to keep working if they want to.
When Social Security was enacted in 1935, the average life
expectancy rate was 61.7. The government set the full
retirement age at 65. Today, even though the life expectancy is
77.6 and expected to rise to 82.7 in 2030, Social Security
benefits allow people to retire as early as 65. Here is the
core of the challenge: the first wave of 77 million baby
boomers to turn 62 will do so in just four years. In 2008,
millions will retire and thereby worsen the American labor
picture. There will not be nearly enough young people entering
the workforce to make up for this exodus. As a result,
experienced workers will be harder to come by.
According to a recent survey from the Society for Human
Resource Management, two-thirds of U.S. employers don't
actively recruit older workers. Additionally, more than half do
not actively attempt to retain key older employees. If this
trend continues, our country will experience a severe shortage
of talented workers in a very short time.
Whenever a worker retires, he or she takes with them
valuable skills, knowledge, and experience that take time and
money to replace. In order to attract and retain these valuable
workers, we must create a workplace culture that values their
experience and capabilities. To help accomplish this, Congress
must remove the obstacles that impede employers from offering
flexible retirement packages to its employees. These obstacles
start with pension and benefit rules but also include other
regulations.
I am reminded of Dr. Russell B. Clark, of Orem, UT, who at
age 102, was America's Oldest Worker for 2003. As a retired
physician, Dr. Clark continues to spend his time managing an
industrial park and other real estate investments, writing his
life history, and volunteering when needed. Now almost 104, Dr.
Clark is the epitome of making the most out of life, and
certainly does not allow age to determine his circumstance.
Like millions of other older Americans who are still working,
his knowledge and experience benefit employers, other employees
and our entire country.
Thank you for holding this hearing, Mr. Chairman. This is
an important issue that merits our attention. I look forward to
hearing from the witnesses today.
Senator Breaux. I appreciate that very much, Senator Hatch.
Mr. Valenti, you are on the stage.
STATEMENT OF JACK VALENTI, FORMER PRESIDENT, MOTION PICTURE
ASSOCIATION OF AMERICA, WASHINGTON, DC
Mr. Valenti. I want to thank you, Senator Hatch, for the
kind words, and join with you, Senators Craig and Hatch, in
complimenting Senator Breaux. I have known Senator Breaux since
he came to the Congress as a fresh young-faced Congressman out
of Louisiana. He has gone on to greater things. The only thing
he hasn't done is make the Davis Cup, but he could have if he
chose to. [Laughter.]
I am from Texas and proud of it, and Senator Breaux is from
Louisiana. Sometimes we think alike and our politics is pretty
much the same, which is why I say that if I die---- [Laughter.]
I want to be buried in Texas because I want to remain
politically active. [Laughter.]
These are obviously scrambling and unquiet times and there
are a lot of issues that come before the American people and
the Congress that are vapory and imprecise and burdened with
uncertainty. You just don't know how to deal with them. But
then there are some other issues where the arithmetic is
clearly understood by everybody and we can forecast with great
accuracy.
That brings me to Social Security, which, of course, is the
molecular connection to millions and millions of Americans who
rely on it for a good life, or at least a pleasant life, and
not a destitute one.
But the numbers that come out lately, this committee knows
them far greater than I. Americans are growing older. I read
somewhere where in the next 15 to 20 to 30 years, those living
over 100 years will rise with startling speed and they are
going to be there quite a long time.
What comes out of these demographics, these bleak and surly
figures, is the fact that while there might be three Americans
supporting one person on Social Security, in a few years, there
will be two Americans supporting one on Social Security. Then
after that, the outlook gets a little soggy.
I think, as Senator Breaux said in his opening statement,
there are many, many Americans over the age of 65 who don't
want to retire, who find their work illuminating and good,
although there are a lot that are probably living lives of
quiet desperation because they don't like what they do.
So I think that there are two big intruders in the future
now that we have to deal with, and that is older people, their
lack of energy, and the other one is the fact that they are
doing something they don't like and so they are ready to
retire. But I don't think it need be that way.
Whenever I speak before college audiences, and I do a lot
of that--I haven't been into Utah lately, Senator Hatch, but I
am going to see that you fill that omission for me----
Senator Hatch. We will take care of that.
Mr. Valenti [continuing]. I always tell students, I am only
going to give you one piece of advice, unlike most commencement
speakers or older people. My advice is this. Never take a job
just for money. Always try to strive to find a job that you
really love to do, you have a passion for it. If it is money
you seek, you are going to have people who will offer you
barrels full of it, because if you love what you do, the
chances are you will do it with such splendor that the offers
will come and just avalanche you, and I believe that. I think
it is so important to do what you love to do, particularly as
you grow older.
I have found in my own life that I find retirement a
synonym for decay. I remember when I left the White House after
serving 3 years as a Special Assistant to President Johnson--I
don't recommend working for a President, only slept about 4
hours a night. So when I left the White House, I was a physical
mess. Lack of sleep and pressure and stress, it just fell up on
you like jaguars springing out of a tree. I was absolutely ill-
nourished.
I decided then that I was going to change the shape and
form of my daily life, and the first thing I was going to do
was to get physically fit, and I became kind of a fanatic about
it and I got me a trainer and I started every day in a new
religion, which means that--you go to church on Sunday. I went
to church--I go to church every morning about a quarter to six
in my gym or wherever I am on this racked and weary old planet.
I stay in a hotel that has got a gym. I do 40 minutes to an
hour every day, even though there are some days I want to say,
``Oh, enough of this,'' and I try to push myself to extremes. I
think if you start doing that and give yourself about 25 or 30
years at it, it pays off.
So I just think that it is important for people to
understand that if you do something you like and if you stay
physically fit so that you can go 15 hours a working day
without collapsing, and I know that I am in far better physical
shape now than I was 25 years ago, and as a result, I find that
the brain can't function when it is fed by fatigue. You lose a
sense of direction when you are tired and when you are worn.
Now, as a result of staying physically alive, I enjoy being
around me. I find that to be kind of a delight. I have left the
MPAA because after 38 years, I think that--and I was just
getting the hang of the job, I might add, too---- [Laughter.]
But I am going on to some other careers now, and when I
finish them, I will start another one. I think when I sit
beside Senator Glenn, I am just awestruck. I met him first time
when he was in the original group of the seven, wasn't it----
Senator Glenn. Yes.
Mr. Valenti [continuing]. Mercury astronauts. John, you
haven't changed since then, as a matter of fact----
Senator Glenn. You lie.
Mr. Valenti. I think you look about the same.
At any rate, I thank this committee because I think you are
bringing up something that is absolutely crucial to the future
of this country. If we don't find a way to deal with older
workers and the pressures that are on Social Security, and
Chairman Greenspan has outlined the bleak particulars to us
that we need to look at and fix, and I think the Congress will
do that. I am sure Members of Congress will perform and act
wisely, that is, Mr. Chairman, after they have discarded all
the other alternatives, they will do that. [Laughter.]
So I am here to answer whatever questions you might have.
Senator Breaux. To Senator Glenn and Jack Valenti, thank
you so very much. I think every senior in the country this is
being televised should have a copy of the tape of both of you,
at your point in life, being able to talk about the future is
so very important, because people, I think, at whatever age, as
you said, Jack, need to be involved, need to be active, need to
be thinking, and both of you are really credits to that
particular philosophy.
The thing that has concerned me is that back in 1935, 70
years ago, when Congress passed the Social Security legislation
for retirement purposes, Congress magically took the number 65
as the eligibility age. Now, Congress really knew what they
were doing, because in 1935, the average life expectancy in
1935 was 61.7 years of age. So Congress said, when you get to
be 65, we are going to give you a retirement check, and the
average person only lives to be 61.7 years of age, so it wasn't
going to cost us a lot. But guess what. Over the years, life
expectancy now is projected to be approximately 83 years in the
year 2030.
So a number that Congress picked 70 years ago, 65, as being
appropriate for retirement purposes has been carried through
for 70 years without really a lot of updating as far as the
concept of when I can retire. If anything, Congress makes you
eligible for retirement now at 62.
The problems that that presents are enormous. The
projections are we are only going to have two working-age
people for every person 65 or over by the year 2030. Today, we
have seven people working for every person who is over 65. But
as people retire earlier and earlier, there are fewer and fewer
working to take care of more and more who are not working
because they are retired. So it is truly a huge problem.
John, let me just ask you one question. A lot of people
will make the argument that you have to let them retire because
there is danger in some of these professions and an older
person can't keep up either mentally or physically. I know
people, however, that are 40 and are senile, and some people
who are both of you gentlemen's age and are alert and
articulate and vibrant.
So how did they check that with you when you became an
astronaut again at 77? We were talking about pilots having to
have mandatory retirements and police and firemen because of
the danger of the job. I think the argument on the other side
is, well, if they have that type of a job, let us test them and
make sure they can handle that. How did they do that with you?
Senator Glenn. Well, I had to pass all the tests. One of
the things that Dan Golden, who was running NASA at that time,
said was that if this went through--if the doctors thought this
was a good project to run, the National Institute of Aging
doctors as well as NASA, and then they put this out for peer
review for over a year before that decision was made--I would
have to pass any physical that the younger people would pass,
and that was fine with me. They shouldn't give me any waivers
on that, and they didn't. In fact, I had more checks that were
done on me than the younger people normally have before they go
up on space flight. Heart, they were particularly concerned
about that and I had every heart check there was.
I think the same thing, what you basically said a moment
ago, airline pilots are required to retire at 60. I think you
had a hearing on that a short time ago----
Senator Breaux. Last week.
Senator Glenn [continuing]. I think your statement on that
indicated that you would favor upping the age on that. I
certainly do, too. I think there is a lot to be said for
experience. I think that adds a lot. Back when some of those
rules were set earlier on airline pilots, for instance, the
average age was lower. People were not living as long as they
are today and they are much healthier today at the age of 60
than the average person was back when the airline industry,
starting back in the 1930's and 1940's.
So I think there should be good testing of a person's
capabilities. Airline pilots is a good example because they
have great responsibility and we don't want somebody up there
who is going to get sick or likely to pass out or whatever with
a whole load of people on the airplane. But I think you can
devise tests that not only are tests like I had to go through
that show your physical condition, are you able to take
whatever the stresses might be, but also, I think there could
be some psychological tests given as to whether people are
having any problems or not.
I don't think that would be any problem at all, and I would
favor upping the airline age myself. I would favor upping that
because I think those people have a lot of experience. I think
it is a shame to put pilots out to pasture prematurely. Some of
the union people, I think, the airline unions of some of the
younger members, like to see earlier retirement so that they
can move up, so there is that end of it that has to be dealt
with, too.
But as far as the physical ability to do work, measure the
physical ability, whatever it is, whether it is airline pilots
or whatever the person's job is. You don't want someone staying
in a job where it is dangerous to that person or other people.
But I think you can devise tests to determine if it is safe for
older people to continue contributing through their job.
Jack talked about the advantages of exercise, and I agree
with that 100 percent. People say, what are the two things you
advise? Well, far be it from me to advise people on how to get
old. I am having trouble enough coping with it myself. But if
there are a couple of things that I think are very, very
important, there are two things.
One would be exercise, as Jack said, every day. You don't
have to have to have a gym like Jack does. You can get out and
walk down the street, or you can take flour sacks or something
and do exercises and get enough. The doctor advised me years
ago to get up a little sweat. That shows your body is adapting
to the exercise condition that you are in. If you can, do that
4 or 5 days a week. I like to get out and walk. The doctor
said, don't jog anymore because all you are doing is banging up
your knees and your bones and your joints. But you can do fast
walking and get a sweat up. So do a couple of miles; I try to
do that 4 or 5 days a week, usually hit it.
Second, I think that it is important what your attitude is.
If you get up in the morning and say, ``Oh, gosh, I am going to
go sit on the porch,'' as Jack said, or are you going to rock.
[Laughter.]
Your biggest objective of the days is maybe waiting for the
mail to come in at 5 o'clock in the afternoon well, you are
probably going to dwindle pretty fast, I think.
It is important to have something you enjoy doing, and
everybody can have that, whether it is reading to the school
kids, going down and helping somebody at the church or helping
with the military or whatever it is. Everyone can have a
project that you look forward to every day, enjoy doing, and
you are doing it.
I think exercise and attitude enable people to live to an
older age and be productive at that time.
Senator Breaux. That is a great summary. Just as a follow-
up, Jack, on the question about the exercise that you do, I
mean, I know people in your category age-wise that just have
shut it down as far as any type of physical activity at all,
even though they are healthy and even though they would
otherwise be able to do it physically. They are just thinking,
well, I got to be 65. I am not supposed to do that anymore. I
am supposed to get to the rocking chair and not do anything.
How important was this whole exercise regime in keeping you
going to the extent that you are today? How important was that
to you?
Mr. Valenti. I think, as Senator Glenn pointed out, that
attitude, a state of mind, is so very important. I guess I look
back on my President, President Johnson, who left office in
January 1969 and he was dead 4 years later. I think retirement
is absolutely--it despoiled him and it crushed him. People
don't realize that he was only 64 years old when he died. So I
have that in my memory.
But I think it is doing things that you like to do. I have
a lot of things I enjoy doing and a lot of things that I find
exciting to do. Changing into a new career is exciting. It
keeps you alive, keeps you vibrant, keeps you flexible. I
certainly second what Senator Glenn said, that attitude in
life, where you can't wait to get up in the morning to be about
whatever task you have, not because you ought to but because
you want to, big difference.
I have to say, I have never spent a day in my life doing a
job that I didn't like. I said earlier, I used the Rose great
quotation. Most people lead lives of quiet desperation, mainly
because they really don't enjoy the 24 hours of each day that
they are living in, and I think that is quite sad.
Senator Breaux. Thank you both, gentlemen.
Senator Craig.
The Chairman. The one question I had proposed to myself to
ask of both of you was the advice you would offer to those
about to retire. You have already answered that abundantly, I
do believe.
Senator Glenn. Don't.
The Chairman. Exercise--don't. That is correct. [Laughter.]
Exercise and attitude make a lot of difference. There is
one question in all of that, because over the years, I have
found the value of exercise and try to do it very regularly
now. Is it exercise and physical fitness bringing an
improvement in one's attitude? Would you not agree with that?
Mr. Valenti. I certainly would. I think you are absolutely
right. When you are feeling physically fit, you just enjoy life
better. There is no question about that.
Senator Glenn. You just have more energy.
The Chairman. There you go. I agree with that. It is an
energizer, and I think that we are certainly finding that now
in many of our senior communities and senior centers, the
emphasis on exercise and people who were fairly sedimentary are
all of a sudden out and busy and exercising and spinning off
and doing other things and generating a great deal of energy
proves that exercise is extremely valuable.
Gentlemen, thank you for coming to the committee and
offering your advice and being examples of a good many citizens
across the country who are not retiring but changing jobs at an
older age and finding it very rejuvenating and exciting as you
continue on your life. But we thank you for being here today.
Senator Breaux. Senator Hatch.
Senator Hatch. Thank you, Mr. Chairman. I want to thank
both of you for being here. I can't think of two better
examples of people who have made the most out of their lives
than the two of you; your advice is really, really good. The
people who really do live longer and have higher qualities of
life are those who keep busy in doing what they really enjoy
doing.
I have been around both of you, and I have to say that you
both do exactly that. Now, you could be a little less active,
John, in this Presidential campaign. Laughter.]
And Jack----
Senator Glenn. I am working on Jack's problem with Social
Security. [Laughter.]
Senator Hatch. We are working on it. I just want to thank
you both for being here and again express my high regard for
the distinguished chairman here today. We are all going to miss
him, and frankly, we are going to miss you at the MPAA, Jack,
very, very much. You did a job there that I don't think anybody
else in America could have even come close to achieving. I feel
sorry for poor Mr. Glickman. He has got to succeed you and he
has got to do the job of three people because that is the way
you worked all the time. [Laughter.]
It will take at least three people to do what you were
doing, but hopefully we can all help him.
Thank you both for being here and thank you for standing up
for senior citizens. We appreciate it.
Senator Breaux. Thank you, Senator.
John Glenn, Jack Valenti, the committee thanks you. Your
country thanks you, as well. Thank you.
Senator Glenn. Thank you.
Mr. Valenti. Thank you.
Senator Breaux. I would like to welcome our panel up next,
consisting of Dr. Ken Dychtwald, who is a psychologist, a
gerontologist, and a best-selling author of 10 books about
lifestyle and marketing and workforce implications of the age
wave. He is founding president and CEO of Age Wave, a firm
created to guide the Fortune 500 companies and government
groups and product and service development for the baby
boomers.
Dr. Sharon Brangman--Dr. Brangman, please join us at the
table--is a professor of medicine and Division Chief of
Geriatric Medicine in the Department of Medicine at the SUNY
Upstate Medical University in Syracuse, NY. She is also the
director of the Central New York Alzheimer's Disease Assistance
Center and the geriatric medicine fellowship program at SUNY.
She was elected to the Board of the American Geriatric Society
in May 2002.
Mr. Doug Holbrook--Doug, welcome--is vice president and
secretary-treasurer of the National Leadership Conference. He
was previously a member of AARP, Andress Foundation Board of
Trustees, and AARP Insurance Trust of AARP Health Care Options
Program and a member of the AARP National Work Opportunities
Advisory Committee.
Ms. Victoria Humphrey, welcome. She is the head of the
human resources for Volkswagen of America and also Volkswagen
of Canada. In her executive leadership position, Ms. Humphrey
oversees the human resources for the company's approximately
3,000 employees. Prior to joining Volkswagen, she worked for
American Bell, AT&T, Lucent Technologies, Northwestern Bell,
and also Winn-Dixie.
Ed Potter--Ed, thank you for being with us--is president of
the Employment Policy Foundation, a nonprofit, nonpartisan
economic policy research foundation that promotes sound
employment policy. He is an economist and labor law attorney
who has extensive experience on employment issues in a global
economy. He has testified many times before the Congress and is
a frequent media commentator, as well. He currently serves as a
U.S. employer delegate to the International Labor Organization
Conference.
Gentlemen and ladies, we appreciate your being with us.
Ken, do you want to start and we will go left to right and
start with you.
Mr. Dychtwald. Sure.
Senator Breaux. Welcome back. We are glad to have you.
STATEMENT OF KEN DYCHTWALD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AGE WAVE, SAN FRANCISCO, CA
Mr. Dychtwald. Thank you, Chairman Breaux and Co-Chairman
Craig, for the honor of testifying today. I am going to
organize my comments around six key points.
First, we are in the midst of an extraordinary longevity
revolution. Throughout 99 percent of all of human history, the
average life expectation worldwide was less than 18 years. In
the past, most people didn't age, they died.
Thanks to extraordinary advances in the 19th and 20th
centuries in sanitation, public health, better distribution of
nutrition, foods, and modern medicine, now most of us will have
the experience of living very long lives. Life expectancy, as
you mentioned, has lifted from 47 to 77 during the past 100
years, and I would point out that this longevity evolution is
not over. With every decade that has passed, the average life
expectation is elevated 2\1/2\ years, and the older we get, the
longer one lives, as you point out. It is conceivable that in
the years to come, breakthroughs in the life sciences will
allow more and more of us to live into our eighth, ninth, tenth
decade and beyond.
I would point out that two-thirds of all the men and women
who have ever lived past 65 in the entire history of the world
are alive today. Knowing what to make of aging, longevity,
knowing when to stop working, these are challenges the entire
world is beginning to scratch its head and contemplate for the
very first time in history.
Increasing longevity doesn't necessarily mean we will have
more old people who will be old longer. In fact, if you look at
the population in the surveys, people are now beginning to
think that old age begins somewhere between 75 and 80. People
are electing to stay young longer, to be middle-aged for
decades, to postpone old age.
I would also point out on this first point that this
longevity revolution, at the end of the day, may have a larger
impact on our lives, our work, our economy, our families, our
communities, than either the industrial or technological
revolutions of previous centuries. This is a big one.
Second point, there is a coming brain drain. In the years
ahead, as the boomers born between 1946 and 1964 start hitting
their 60's and contemplating retirement, there simply won't be
enough talent to fuel the American workforce or to fuel its
productivity growth. I would add that boomers are paying about
60 percent of all the personal taxes at this particular time,
and to cause that generation to no longer be earning and no
longer able to contribute in those ways could be devastating
economically.
The Bureau of Labor Statistics projects, and it is hard to
imagine this particular moment in time, but projects that we
will have a 10 million worker shortfall over the next decade.
Can we afford to lose so much skills, talent, so much legacy?
My third point has to do with ageism. It is well known that
ours is a culture that glorifies youth, in our language, in the
way we talk to each other, in the models that we see on
television, the people we see in ads. It is so much a part of
our society, we hardly even notice it. But let us think of it
in terms of the workforce. It is conceivable that this ageism
is blinding employers so that they are literally driving their
companies and organizations off a demographic cliff.
Currently, two-thirds of U.S. employers don't actively
recruit older workers. More than half don't really try to keep
the older ones. Eighty percent don't offer any special
provisions to appeal to their concerns. How about training? If
we are going to talk about reinventing one's self, 55-plus
workers receive on average less than half the amount of
training than any of their younger cohorts.
Ageism can start with recruiting, with such ads as to talk
about energy and fast paced and fresh thinking, which are
clearly ageist comments in disguise, and it can end with a
golden parachute, in which people are simply ushered out the
door quietly. Let us get them out of the way.
I will give you an example. Ageism is so widespread in our
culture, we really don't even notice it. One of the most
popular TV shows last year was a show called ``American Idol.''
It was the American dream. People could be brought out of their
communities, their neighborhoods, and have a chance to show
their talent and achieve success, except you couldn't be over
28 to join. We wouldn't tolerate that if it were sexism, if it
were racism, and yet it is OK with Ageism. It is not OK.
Mature workers are attracted to cultures that honor their
experience and capabilities. Too few companies pay much regard
to this theme.
My fourth point, is that I actually think we are in a
moment of a tipping point. We are seeing a new model of work
and retirement emerge and we don't even really have the
language to describe it. Let us remember, as has been pointed
out, that retirement was not created so that older adults could
enjoy decades of leisure. It emerged during a time in history
where the unemployment level was 25 percent and there was a
huge movement in America to rid the workforce of what were then
called ``geezers.''
There was an ageist spell in the roaring 1920's. Roosevelt
had an interesting challenge. By trying to find jobs for the
young, the only obvious solution was to allow older adults, who
mostly had lived a life of physical toil, to step out of work,
and if they were lucky enough to have some longevity, to
experience a few years of rest before they passed on.
Inadvertently, perhaps, by selecting age 65 and
institutionalizing retirement, we have also institutionalized
old age itself. We have removed older people from the sense
that they might contribute. We have removed younger people from
working side by side with people generations older than them.
We have broken the bridges between generations that used to
exist in the workplace.
Today, with rising life expectancies, the average American
retires at around 62 and will then have 20 more years of life.
According to Webster's Unabridged Dictionary, to retire means
to disappear, to go away. Is that good for anybody?
One-half of today's retirees say they are bored and
restless. They are worried about their economics. Last year,
the average retiree watched 43 hours of television a week.
People historically have lived linear life plans. When life
was 40 or 50 or 60 years long, you learned once, you worked for
a spell, and then you either passed away or had some
retirement. I think what people are dreaming of in the future
is a more cyclic arrangement in which they might go back to
school at 50. They might retire and start a whole new career.
We have seen extraordinary examples of that today with Senator
Glenn and Mr. Valenti. Perhaps retirement in the future will
still be there as a kind of a turning point through which
people pass and then reinvent themselves in a whole new phase
of life.
Fifth, I made up the phrase ``silver ceiling'' a few years
ago as I was hearing so much concern about glass ceilings.
Eighty percent of boomers expect to keep working at least part-
time during their retirement, both because they will need the
income and because they like the idea of staying involved.
Older earners, let us remember, keep a stimulated economy,
something that is going to be extremely important in the
decades to come.
But they are looking for different blends between work and
play. They have reached a point in their life where perhaps
they would like to work 4 days a week or 8 months a year, work
on a project for a while and then step out, maybe work a few
hours a day, maybe even volunteer.
Truly flexible retirement is not yet possible for most
employees, and perhaps that is a serious problem that is
readily fixable. According to the Employment Policy Foundation
study, one of Mr. Potter's studies, 65 percent of employers
would like to offer such flexible retirement, with phased
retirement and flex-time and part-time and retraining and
rehirement, but most feel blocked by pension and benefits
regulations. Even the IRS, ERISA, and ADEA currently have
provisions that get in the way.
My last point, is that there is no question that there is
an age wave coming and old most certainly isn't what it used to
be. In last fall's World Series, the winning Florida Marlins
were led by 72-year-old Jack McKeon, called out of retirement
early in the season to turn around an under-performing club. He
is not alone. Sixty-five-year-old John Reed was named Interim
Chairman and CEO of the New York Stock Exchange. Barbara
Walters continues to expand her media range and burn up the
airways in her 70's. Warren Buffett is widely viewed as the
most respected investor in the world at 75. Of course, the
Fed's Alan Greenspan remains capable and wise at 78.
This late achievement is not a new idea, but it is
multiplying. Grandma Moses didn't start painting until she was
80. Groucho Marx launched his career on television at the age
of 65. Galileo published his masterpiece, Dialogue Concerning
the Two New Sciences, at 94. Noah Webster was 70 when he
published An American Dictionary of the English Language. Frank
Lloyd Wright designed the Guggenheim at 91. Mahatma Gandhi was
72 when he completed successful negotiations with Britain for
India's independence.
I think we must realize that in this new era, people don't
simply lose talent and experience over a lifetime at the flip
of a switch. It is not good business to push people out the
door just because outdated ageist policies say it is time.
Perhaps late blooming should be celebrated, not penalized.
Perhaps it is time to retire retirement.
I would like to say in closing, a personal comment. I want
to thank you, Senator Breaux, for the extraordinary wisdom and
vision you have brought to this role over the past several
decades. It is my honor to be here with you today.
Senator Breaux. Thank you very much.
Mr. Dychtwald. Thank you.
Senator Breaux. I appreciate it.
[The prepared statement of Mr. Dychtwald follows:]
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Senator Breaux. Dr. Brangman.
STATEMENT OF SHARON A. BRANGMAN, M.D., PROFESSOR OF MEDICINE
AND DIVISION CHIEF, GERIATRIC MEDICINE, SUNY UPSTATE MEDICAL
UNIVERSITY, SYRACUSE, NEW YORK, ON BEHALF OF THE AMERICAN
GERIATRICS SOCIETY
Dr. Brangman. Thank you for allowing me to testify today. I
am Dr. Sharon Brangman. I am a board-certified geriatrician,
professor, and division chief of geriatrics at SUNY Upstate
Medical University in Syracuse, New York. I appreciate the
opportunity to participate today on behalf of the American
Geriatrics Society, an organization of approximately 7,000
geriatricians and other health care professionals dedicated to
the care of older adults. Geriatricians are primary care-
oriented physicians who are experts in caring for older adults.
Our country is aging rapidly, as we have heard. Compared to
about 35.6 million aged persons today, by 2030, it is projected
that this number will double, to about 71.5 million older
persons. The implications of this demographic imperative are
dramatic.
Public health measures, prescription drugs, and advances in
medicine have allowed our citizens to live longer. Americans
can now live for many years with multiple chronic illnesses,
whereas a generation ago, most people died rapidly from an
acute illness. This means that more people are able to work
despite a chronic disease or disability. Technological advances
can allow the workplace to be adapted so that these individuals
can continue gainful employment.
For many older Americans, age does not pose a major barrier
to working. While health problems do increase with age, these
are usually gradual processes that can be managed by current
medical care. As a clinician, I see many patients who are able
to work in some capacity. In many instances, working would
allow for a person to do what we call aging successfully.
Geriatricians typically evaluate the physical, social, and
psychological aspects of their patients' lives since all of
these elements are critical to our patients' ability to age
successfully.
First, we need to look at workplace involvement and how it
creates more opportunities for community involvement that
maximizes interactions with the outer world, allowing for
greater physical and mental stimulation for older adults.
Second, workplace involvement creates opportunities for
important intergenerational exchanges that have a positive
social and psychological impact on older adults. It is
important to emphasize that this works both ways, since the
younger worker also benefits from the mentoring and experience
of older workers.
Third, workplace involvement has a physical benefit.
Individuals who do not have enough activities to occupy their
day are more likely to sit at home and focus on all their aches
and pains, which allows these ailments to have a greater
significance in their day-to-day functioning.
Another physical benefit of working is the increased
physical activity that results from going to work. A recent
study that appeared in the Archives of Internal Medicine
indicated the importance of physical exercise in the elderly as
a way of reducing physical decline and enhancing quality of
life. The current 65 and older generation is not as likely to
go into a gym or engage in formal exercise as younger adults
do. However, employment can provide physical activity that can
be just as beneficial as formal exercise. I am reminded of a
patient who delivers flowers 6 days a week and benefits from
the walking involved in his job.
Fourth, workplace involvement has a psychological benefit,
specifically preventing or reducing the onset of depression.
Depression is not a normal part of aging, but unfortunately, it
is very common in the elderly. In addition, advancing age is
often accompanied by the loss of key social support systems.
Because of this loss of social support and the fact that they
are expected to slow down, some elderly persons are more likely
to get depressed. Depression in later life frequently coexists
with other medical illnesses and disabilities, which can make
them worse.
Persons who stay in the workforce feel valued. They have a
strong sense of accomplishment, and they feel that it is
important to remain contributing members of society. Almost
universally, my patients state that they don't want to be a
burden to their children or others. Studies have shown that the
mental activity associated with working can allow for greater
brain function and decreased rates of depression. This means
that individuals will be more likely to remain functional and
independent within their families, communities, and societies.
I have two patient anecdotes that are relevant to today's
hearings. The first patient is a highly successful and
unmarried businessman who left his home State and retired to
Florida at age 75 to live with his five sisters. In Florida,
his family pampered him, a lifestyle that was new to him, and
he became very depressed and lethargic. He ultimately left
Florida, returned home, and started a new business, which has
become nationally known, and he continues to work at age 85.
The second patient is a retired Spanish teacher in her
mideighties with over 35 years of teaching experience. She
currently teaches adult Spanish classes four nights a week. She
is an active gardener and a volunteer in her community. She
enjoys a sense of accomplishment she has by working daily, and
the continued interaction with others keeps her sharp and
engaged. She could never imagine herself sitting home and doing
nothing.
I would be remiss if I did not discuss the needs of
geriatrics and the acute shortage of trained physicians this
profession is facing. Today, there are approximately 6,700
certified geriatricians in our country. Some studies indicate
that we currently need about 13,000 more, with as many as
36,000 by 2030. Senator Breaux and other members of this
committee have supported legislation that provides incentives
to train more geriatricians, and we certainly respect and
appreciate that support you have given us.
Thank you for allowing me to address the committee today,
and I look forward to working with you on this issue in the
future.
Senator Breaux. Thank you, Dr. Brangman.
[The prepared statement of Dr. Brangman follows:]
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Senator Breaux. Doug Holbrook, we are glad to have you.
STATEMENT OF DOUGLAS C. HOLBROOK, VICE PRESIDENT/SECRETARY-
TREASURER, AMERICAN ASSOCIATION OF RETIRED PERSONS, WASHINGTON,
DC
Mr. Holbrook. Mr. Chairman and members of the committee, I
am Doug Holbrook, vice president and secretary-treasurer of
AARP. Before I begin, Senator Breaux, I would just like to say
on behalf of AARP we deeply appreciate your years of service
and we will miss you here on Capitol Hill, and we thank you for
convening this hearing to highlight one of our nation's most
under-used resources, the older worker.
AARP is the largest organization representing the interest
of Americans age 50 and older and their families. About half of
AARP members are working either full-time or part-time. All of
our working members, as well as those that want to work, have a
vital interest in being able to remain on the job and to
contribute to society without facing age discrimination by
their employers.
Protecting and expanding the rights and opportunities for
older workers was a founding principle of AARP. Today, we work
to eliminate age discrimination in employment and improve
employment conditions and policies to all workers. We
collaborate with employers to increase job opportunities for
those age 55 and over and serve as an information
clearinghouse.
Older workers are similar to other workers. They work in
comparable professions. They want a good income with benefits.
They strive to balance job and family life. Indeed, family
obligations are a key reason these workers are interested in
flexible schedules, part-time work, and non-traditional
arrangements, and older workers are very concerned about age
discrimination in the workplace.
The number of workers age 55 and over is growing in real
terms and as a percentage of the overall workforce. As of this
past July, more than 23 million persons aged 55 and older were
on the job. By 2012, the Bureau of Labor Statistics projects
the participation rate for 55- to 64-year-olds to jump from 61
to 65 percent.
There are basic economic reasons older workers choose to
remain in the workforce. Earnings are often necessary to
supplement inadequate income from savings and pensions, and
this is especially true for women. The increase in the age for
collecting Social Security benefits to 67, which affects those
born after 1937, also means that many people will continue to
work to avoid receiving a reduced benefit. Still others will
work to have health coverage.
Given projected labor shortages, we believe businesses will
need to do more to attract and retain older workers. Some
employers already are ahead of the curve and have adopted
practices that address older workers' needs.
Four years ago, AARP established an annual award program to
recognize these companies. On Thursday, 35 businesses and
organizations will be honored as AARP's best employers for
workers over 50. They have formal and informal arrangements
that allow older workers flexibility, such as job sharing and
compressed work weeks. They also tailor programs to older
workers, such as medical screening by employers who are health
care providers.
In addition, AARP has begun working with employers to
expand job opportunities. For example, the AARP Foundation's
Senior Community Service Employment Program formed a
partnership with Home Depot to place qualified applicants with
Home Depot stores that have open positions. CSEP serves people
age 55 and over living near or below the Federal poverty level
that need training to re-enter the labor force. Although it is
relatively new, the program has generated a great deal of
interest.
Over the next decade, population growth will be most
pronounced among individuals age 55 and older. Many will retire
fully; many will not. One of the challenges for employers who
want to stay competitive is to make work more attractive to
those mature workers. Employers who understand this and adapt
their work environment will find themselves better positioned
to reap the benefits of this potential resource.
The challenge for Congress is to establish policies that
complement the innovative policies of employers who have
successfully attracted older workers. For example, legislation
protecting the retirement and health benefit of older workers
will encourage these workers to remain in the workforce.
Recognizing the needs of workers age 55 and over will help
Congress develop policies to meet these growing needs.
Mr. Chairman, thank you very much for the opportunity to
address you today.
Senator Breaux. Thank you, Mr. Holbrook.
[The prepared statement of Mr. Holbrook follows:]
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Senator Breaux. Ms. Humphrey.
STATEMENT OF VICTORIA HUMPHREY, EXECUTIVE DIRECTOR OF HUMAN
RESOURCES, VOLKSWAGEN OF AMERICA, INC. AND VOLKSWAGEN CANADA,
INC., AUBURN HILLS, MI
Ms. Humphrey. Good afternoon. I am pleased to be here today
to discuss the value and appreciation Volkswagen of America has
for its older workers.
Volkswagen of America, or VOA, was founded in 1955 and is
headquartered in Auburn Hills, Michigan. We employ
approximately 2,200 people in the United States who are
responsible for various aspects of the design, testing,
marketing, and service of Volkswagen group products, including
Volkswagen, Audi, and Bentley brands. Our financial services
subsidiary, VW Credit, Inc., provides financing for our
products. Our retail network comprises about 840 independent
dealers, and each year, VOA buys more than a half-a-billion
dollars worth of American-made parts and components.
One thing that makes Volkswagen different from other car
manufacturers is our success rate in retaining employees, old
and young alike. Nearly one-quarter of our U.S. workforce is
over the age of 50 and employee turnover is just 5 percent.
Recently, the AARP recognized us as being one of the top
companies for older workers.
Our attitude toward older workers is different from most
companies. In the mid-1990s, it became common practice for
companies to actively recruit young professionals with MBA
degrees in order to bring in what was commonly referred to as
``new blood,'' which always meant young. As many companies
started to turn their organizations around, they became
dismissive toward older, more experienced workers. This
attitude is, in fact, a form of ageism, and ageism can be just
as destructive as any other ``ism.'' In fact, in today's job
market, older workers trying to make themselves more
competitive are obscuring dates on their resumes so their age
isn't so apparent.
I had the experience of joining VOA at the age of 53.
Knowing I was one of six candidates, I was concerned that my
age might be an issue. I later learned, during the discussion
of candidates, age was never mentioned. It was then that I knew
I had joined a company that valued experience, knowledge, and
skills over anything else.
I was asked to talk today about the benefits VOA offers our
older workers and what we do to retain them. The truth is that
there is no magic benefit. Rather, it is the magic of treating
all employees with decency and respect.
However, we have several programs of special interest to
our older workers. As an example, we give special bonuses for
25-year and 35-year anniversaries. We provide ongoing training.
We offer flexible work options. We actively encourage our older
workers to mentor our younger workers. We provide opportunities
for employees to gain retirement planning advice.
However, we mainly attribute our good record of retaining
employees to a positive corporate culture. Employees feel they
are part of a larger family and we have a clear policy against
discrimination of all kinds, including a strong commitment to
diversity supported by our Diversity Council. Our anti-
discrimination policy is taken very seriously, starting with
our CEO, Gerd Klauss, and is a hallmark of our entire
organization.
The best human resources professionals understand human
nature, and part of human nature is that people appreciate
feeling valued. Companies that demonstrate an appreciation for
older workers will retain them, as well as their experience and
knowledge. Older employees hold a vital key to success, a solid
understanding of the business that cannot be gained any way
other than through experience.
Data shows that when communication fails, 93 percent of the
time, it can be attributed to a lack of relationship building
rather than a lack of technical expertise. Clearly, companies
that understand the importance of relationship building will
have a competitive edge over those that do not. VOA is a
company rooted in relationships, which can explain why
employees who join tend to remain with us for a significant
period of time.
Why are we a company that has such a capacity for valuing
differences? It is a tough question, but perhaps it is based on
our culture and unique history. We have always been an
emotional brand, even an icon to some generations. People root
for the Beetle, and most everyone has his or her own VW story.
In conclusion, we understand that the keys to success are
great products and great people. Our teamwork has the power to
ensure that our successful car brands continue going strong. We
place a high value on our older workers and that is our magic.
Older employees want to work at VOA, and in turn, that makes us
successful.
Thank you for the opportunity to share a little of our
culture with you today.
Senator Breaux. Thank you, Ms. Humphrey.
[The prepared statement of Ms. Humphrey follows:]
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Senator Breaux. Mr. Potter.
STATEMENT OF EDWARD E. POTTER, PRESIDENT, EMPLOYMENT POLICY
FOUNDATION, WASHINGTON, DC
Mr. Potter. Thank you, Mr. Chairman. The previous witnesses
have documented the contribution that older workers can make to
the workplace and have discussed the consequences of the great
demographic changes that are taking place that will result in a
labor skills shortage in the United States over the next 30
years.
One of the ways in which you can deal with a labor and
skills shortage is to increase participation rates in the labor
force, including increasing overall hours of work of older
workers who would otherwise be retired. The focus of my
testimony is on the private sector, where a number of legal and
regulatory obstacles limit the ability of older workers to
shift gradually from full-time work to full retirement through
the use of phased retirement programs with their current
employer.
Phased retirement is any human resources program that
allows older workers to reduce their hours and eases the
transition to full retirement if that is what the workers'
preference is. Phased retirement programs offer a win-win
strategy to meet the needs of retirees, companies, and this
country.
Because of legislative and regulatory obstacles, virtually
no company offers a seamless phased retirement program in which
the employee gradually shifts from full-time employment to
retirement. As a consequence, most phased retirees are retired
employees from other firms or former employees who return after
several years or months break in service as independent
contractors or part-time employees. The rules are sufficiently
complex that many companies are unwilling to consider phased
retirement strategies for fear of jeopardizing their qualified
pension benefits programs.
The legal and regulatory obstacles to phased retirement
arise primarily from ERISA, the Internal Revenue Code, IRS
rulings, and the Age Discrimination in Employment Act. Social
Security, Medicare, and tax policy are also important factors,
particularly from the employee point of view.
The most significant barrier to phased retirement, at least
those administered through qualified defined benefit plans, is
the prohibition against pension distributions to active
employees who have not attained normal retirement age. This is
entirely a regulatory question. Because the IRS considers the
restriction of pension distributions to be a qualification
issue, the consequences of premature or inappropriate
distribution of benefits could disqualify the defined benefit
plan, resulting in disallowance of deductions for employer
contributions to the plan as well as taxation of trust earnings
and participants' vested benefits.
Most companies with modified phased retirement plans
require at least a 6-month break in service with maximum annual
hours of 1,000 hours. If the phased retiree works more than
1,000 hours, the pension benefits are cutoff. Some companies
require a year break in service. Some companies have ruled out
modified phased retirement entirely because their legal
conclusion is that there is no break in service that is long
enough to remove the pension plan from jeopardy.
ERISA requires employers to adhere to rules promoting
uniformity and standardization in the treatment of employees
and the types of benefits offered, and that is a good thing.
However, when we are looking at this question of phased
retirement, we are looking at an entirely different question in
which the distribution of critical skills across the labor
force are not equally distributed.
The limits of the benefits payable from the defined benefit
plans are much more complex to administer and affect phased
retirements. The most significant issue is the lack of clarity
regarding application of limits when a portion of participants'
benefit begins with phased retirement and the remainder on full
retirement. The phased retirement payment option in a qualified
plan is an optional benefit covered by the anti-cutback rule.
This is a very complicated, complex rule in which there is no
experience in dealing with it in the context of phased
retirement.
Employers are also susceptible to potential lawsuits under
the Age Discrimination in Employment Act. Phased retirees are
likely to be part-time workers. Employers frequently provide
different benefit packages to part-time workers than to full-
time workers. Even a nominal difference in benefits could serve
as a basis for an age discrimination suit.
For a phased retirement to flourish to meet the skill and
labor needs of employers and the retirement and work-life
balance needs of older Americans, legislative and regulatory
phased retirement policy must be flexible to accommodate the
varying needs of workers and employers. There should be
flexibility in what is considered to be the normal retirement
age in order that length of service considerations for the
current employer can be taken into account.
Legislative and regulatory phased retirement policy must be
voluntary for workers who may elect phased retirement and
employers who may choose to offer it as a retirement benefit.
Business conditions, realignment, new lines of business, and
labor demographics will be critical considerations in whether
to offer a phased retirement program. Phased retirement should
not be considered a permanent entitlement nor should there be
an expectation of early retirement subsidies or health
insurance as part of the phased retirement program.
Until the legislative and regulatory hurdles are removed,
most companies will be unlikely to offer more extensive phased
retirement options because of the lack of flexibility,
potential cost, and liability.
Thank you for the opportunity to testify before you today,
Mr. Chairman.
[The prepared statement of Mr. Potter follows:]
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Senator Breaux. Thank you very much, all the panel members,
for your presentation. After listening to all of this, I feel
like I almost have a conflict of interest in chairing this
committee on retirement while I am in the midst of doing that--
-- [Laughter.]
But it has also all been very helpful, both personally and
as a chairman of the committee, to hear your thoughts.
The issue you just talked about, Mr. Potter, was really
very interesting because, it seems like there is either a
statute or regulation that really makes it more difficult for
people to continue in a phase-down type of employment
operation, so it is not being done very much. There are not a
lot of people, I take it, taking advantage of a phase-down
retirement work schedule?
Mr. Potter. Well, the issue, frankly, is that because of
the break in service requirement, that there is no
straightforward way, particularly for those employees who are
eligible for defined benefit plans, to do this kind of gradual
phase-down. They must leave their employer for some period of
time.
Senator Breaux. How long is that period?
Mr. Potter. Well, it is not clear what it is. I would say
the center of gravity is around 6 months, but----
Senator Breaux. So they could leave, as I understand it,
they would have to actually depart and sever their relationship
with their employer for approximately 6 months----
Mr. Potter. Six months.
Senator Breaux. Then they could come back legally, I guess?
Mr. Potter. You can see that is quite an obstacle. By that
time, if you need to work, want to work, you are going to go
someplace else.
Senator Breaux. In your opinion, would Congress have to act
to change that, or is that something that is done by regulation
and is not likely to be changed because of the bureaucracy?
Mr. Potter. This particular issue really is entirely a
regulatory issue. Obviously, Congress can provide advice here.
This issue also really is more than just a revenue issue, and
so consideration ought to be given to giving joint jurisdiction
to the Department of Labor and IRS to work out the----
Senator Breaux. Yes. It seems like these decisions which
affect individuals' working conditions is being regulated by
the Internal Revenue Service as opposed to, say, the Department
of Labor, which would look at it from a different perspective
as far as the workforce is concerned.
Mr. Potter. That is right, and there is precedent for this
kind of joint jurisdiction. It has been done in other
circumstances and it ought to be done here.
Senator Breaux. I wonder if it would take more than just
changing jurisdiction. I wonder if it would require perhaps a
legislative endeavor by the Congress to send a message that
this is how it should be considered.
Suppose you were in charge of writing the rule and you had
the pencil and you were ready to write it. How would you
structure what you think would be a preferable way of handling
this particular problem that you spoke about?
Mr. Potter. Well, I think that you would want to start with
some kind of amendment to ERISA, because not only do you want
to address this break in service issue, but you want to lay
down some guidance on the issue of discrimination in benefits
and what you do in a phased retirement context. You want to
make clear what Congressional intent would be with respect to
the anti-cutback rule in this respect.
So I think what you would want to do is, and I think this
could easily be a bipartisan activity, I think this is not--I
mean, the thing that is interesting to me about this hearing is
everybody is on the same page here. I think there is a
consensus across the country that would make something like
this quite possible.
Senator Breaux. Perhaps we could ask if you could--I know
you address it in your statement, but if you could synthesize
it into sort of a recommendation, I think the staff would like
to take a look at it. There is still some time left in this
Congress for things that have to be done legislatively, and
perhaps something like this could be placed in legislation that
is working its way through the Congress, i.e. an appropriations
bill or an omnibus appropriations bill where just maybe if we
could do it in a bipartisan fashion, which I think we may be
able to do, we could really make a difference at this late
hour. So if you could give us a more synthesized recommendation
on what you think would be helpful, then the legislative staff
could take it and maybe we could find a place to put it.
Mr. Potter. I would be glad to do that.
Senator Breaux. I saw a TV program the other day. I would
like to ask you to comment on the substance of it in the sense
that there was an employer who specialized in seeking out
people over 65 to work in their shop, and they basically, not
to talk in details about who it was--I honestly don't
remember--but they were making widgets, making small pieces of
product--I am not sure whether it was jewelry or whatever it
was--but it was basically a hands type of craft. The employer
basically only hired seniors.
But his reason for doing it wasn't because so much as he
was trying to help the seniors. He was trying to help his
company, and the logic he had was that--sort of cold-hearted as
it sounded--I don't have to provide them health insurance
because they are all on Medicare and they already all have
health insurance. Therefore, by hiring 65-year-old people who
are on the Medicare program with health insurance, I was
actually--he said--I am actually able to beat my competition,
who is hiring employees who they have to provide health
insurance for. It is a huge savings. It makes my company much
more profitable.
Do you have any comments on that? Ken.
Mr. Dychtwald. That is a great example. There are a few
pieces to it that perhaps are worth commenting on. First, there
is generally the point of view that older workers are less
reliable, less productive, or more likely to injure and hurt
themselves on the job. I am sure the other panelists could
comment that this is all kind of a myth.
In general, older workers tend to be more loyal, more
reliable, less likely to hurt themselves on the job, less
likely to miss work. They are pretty terrific workers.
To the point of an employer saying, ``Hey, why not recruit
more of these people, they pretty well get the job done'', I
think you are actually going to see more and more of that.
To the point that people are thinking, well, gee, if I hire
an older adult at that particular age, then they get their
insurance sort of picked up by the government, or if they are
over 55, they can use their AARP discounts and get cheaper rate
on car rentals when they are out making sales calls and get the
low rates on the airlines---- [Laughter.]
I mean, some people are going to figure out how to game the
system and actually find out that not only are older people
pretty darn productive and valuable, but there are some
benefits they bring along with them. The question is, is that
fair or just? I think it is legal, but I think you are going to
see more of it.
Senator Breaux. I mean, this guy was saying, ``Look, I am
not doing this for any reason other than it makes my business
more profitable.''
Mr. Dychtwald. Sure.
Senator Breaux. The people show up on time. They are not
late for work and they are dependable. They already have health
insurance, so I am not having to pay for it, so this helps me
in beating my competition.
Mr. Dychtwald. I would add that most older adults are
empty-nesters and so they are not having to take time off from
work to look out for their children. They are not having to
worry about child care. They make----
Senator Breaux. They are not taking maternity leave.
Mr. Dychtwald. That is right. So when you add up the new
equation and you remove some of these false biases, they are
actually a pretty attractive group of candidates.
I would add also, if I might, as your drafting what
conceivably could be the new regulations, that some older
people are keen on the idea of phasing their work down, phased
retirement, maybe going from 5 days to 4 days to 3 days to 2
days. As was pointed out, with many companies, the only way you
can accomplish that, is to first quit, or be fired, or retire,
and then what people often do is just go work across the
street, where you can startup the next day, which is a little
bit ridiculous because employees are giving up the legacy you
have invested in.
But there are many people in the boomer generation who
envision a more flex version of retirement, where instead of
simply having to pare down each year, they might want to work 6
months out of a year and have a big time off and maybe work in
cycles. I would hope that any new regulatory considerations
would accommodate that, as well.
Senator Breaux. Thank you.
Mr. Holbrook. Mr. Chairman.
Senator Breaux. Yes, Mr. Holbrook?
Mr. Holbrook. If I may, I think there are a lot of myths
associated with the fact that older Americans should not be
working, but the fact of the matter is, I think that Ken has
pointed out some of those myths. But the fact of the matter is,
there are problems that some employer is going to hire someone
on the basis that they are not going to have to pay any type of
health care.
Unfortunately, at the present time, people are not fully
covered under Medicare, particularly for prescription drugs,
which is a real serious problem for many of our seniors in this
country, and many of them have to have and need and do have
supplemental coverage. That is one of our major concerns, is
that they have these health benefits provided. I don't know
that you would declare that employer selfish, but I think it is
a little unwise to use that as the only criteria to go and use
for your business, is that they do not have any health--we do
not have to pay health coverage.
Senator Breaux. Well, this person really talked about the
other aspects, too. He said, ``Look, they are dependable. They
do good work. I can count on them showing up. In addition, they
already have health coverage.'' So he was complimentary about
the work ethic they had, as well.
Dr. Brangman, give me some discussion, if you might, on any
potential connections between retirement and depression. I
mean, it seems to me that, and I think Jack Valenti and John
Glenn both referred to it, but if you are staying active
physically by working, your body is active, you have a better
attitude, more positive attitude, et cetera. How many of the
people who we find that are clinically depressed, I mean, how
much of a contribution do you think the fact that they don't
have a job, they don't have something to do every day that they
wake up to, contributes to that?
Dr. Brangman. I think that is a large contributor to
depression in old age. It is still vastly under-diagnosed and
under-treated, but for people whose identity has been their job
and their work and that suddenly stops, they lose a lot of
their social connections, their outside contacts with the
world, their sense of purpose. If they didn't have any other
interests or activities that they had cultivated during their
working life, everything kind of comes to a stop.
Most of my patients tell me that they want to feel like
they are contributing to the world around them. They don't want
to be a burden. They want to remain independent. When they
don't have those feelings and they have time to sit by
themselves, I think that depression is a significant issue.
Senator Breaux. What about the possibilities of people who
find themselves in an assisted living type of facility
continuing to work? I mean, it would seem to me that with all
the outsourcing that we are doing out of the country, it seems
to me that we could attempt to utilize and provide work for
people who are in assisted living type of facilities and not
being fully utilized. It seems like you can only play so much
golf in a retirement home or what have you. Is there any
potential in that area for doing something like that?
Dr. Brangman. Well, I think so. Generally, patients, or
people who are living in assisted living facilities just need
minor supervision. They are still fairly healthy and can move
around and take care of most of their needs. They have vast
periods of time with very little activity. I have many patients
who tell me they never want to play Bingo or shuffleboard. If
we could become creative and figure out ways that they can
contribute, volunteer work, there are a number of jobs that are
done by telephone, other things that can be looked at that
could give them a reason to be excited when they get up in the
morning, something to look forward to, and something that they
feel most importantly connected to that they can contribute to.
Senator Breaux. I think that is all very important. I have
been a big participant and promoter of the Senior Games, the
so-called Senior Olympics, and you find that in talking to
these people that have these challenges out there that it is
such a motivation for them to get out and try and improve and
compete against people in their own age category. I think it is
incredibly good.
Ms. Humphrey, tell us a little bit about how Volkswagen of
America, has been involved in employing older Americans. Do you
segregate the type of work they do? Are they hired for the same
work disciplines as someone who is 25, as opposed to someone
who is 65? How does it work? I mean, does human resources say,
``All right, here are all of our 65-year-old employees. Let us
go find something to do for them that is fitting for a 65-year-
old.'' Or are they spread throughout the workforce
indiscriminately? Can you comment on how they are placed and
what they do? What is the structure of Volkswagen's use of
older Americans?
Ms. Humphrey. As I said in my remarks, it truly is a
remarkable environment in the sense that not only do we not
discriminate, but in the automotive industry today, which is
getting increasingly more complicated, it is the experience
that matters. So we try to keep our younger workers away from
complicated stuff, and I say that in jest, but it is a very
complicated business. It is the older workers that are so
critical to our success and they are the mentors for our
younger workers. So there is absolutely nothing that we do that
separates our workers----
Senator Breaux. So there is no separate division for people
over 65 that is the senior division of Volkswagen that you have
segregated out? [Laughter.]
Ms. Humphrey. Not at all.
Senator Breaux. I appreciate your comments about the
experience. I remember when I ran for Congress 32 years ago, my
slogan at that time was ``experience makes the difference.'' Of
course, I was 28 years old. [Laughter.]
I am not sure how I got away with that slogan, but we did.
[Laughter.]
Senator Kohl, we have had a terrific hearing. We had our
former colleague, Senator John Glenn, here, and Mr. Jack
Valenti talking about keeping active and how important it was
and how they felt about retirement, and they didn't retire,
they just changed jobs. That is kind of what I am doing, too.
This panel was very helpful in discussing some of the
opportunities for the utilization of seniors as well as some
legislative and regulatory prohibitions about allowing them to
do phased retirement, working less and less but continuing in
the workforce, which we may try to address. Do you have any
comments or questions? We welcome you here.
Senator Kohl. Thank you very much, Senator Breaux.
As I understand it, the demographics indicate that in the
years to come, looking out ahead 5 and 10 years, the number of
people leaving the workforce are likely to be far larger than
the number of people entering the workforce. If that is true,
isn't that going to create a whole new situation with respect
to the need for people who are older remaining active and busy?
I think that while it is true in terms of the advice given
to people who are about to retire, they need to stay busy and
active and energetic and engaged, there needs to be, isn't it
true, in the final analysis, a real need for people to stay
working, and if there isn't a real need for it, then it is
awful hard to create ways in which people who are retiring can
stay engaged. But if, in fact, there is a real need for people
in the workforce, then, of course, you will have more people in
the workforce. My understanding is that the numbers indicate
that there will be a real need.
Do you know anything about that? Do you have any comments
to make on that? Yes, sir?
Mr. Dychtwald. Yes. Very often, we imagine that economics
and workforce flow have a great deal to do with technology and
immigration and geopolitical dynamics, all of which they do.
But we often think that demography is flat like a lake. Quite
the opposite. It is convulsing like an erupting lava flow.
During the 1990's, the number of 18- to 34-year-old
Americans actually shrank by 9 million people while the number
of 50-plus Americans grew by 12 million people, and that
movement, brought on, of course, by increasing longevity, the
aging of the baby boom and the baby bust that began in the mid-
1960s, is going to be a powerful engine that reshapes workforce
talent.
So yes, you are 100 percent right. In the years to come,
more than ever before, we are going to need those 57, 62, 74,
and 80-year-olds who, by the way, may have enormous
contributions to make. But we may need to construct the kind of
flexible work arrangements and remove the obstacles so that
they can do that.
I think there is another side we have to be careful not to
hammer on, which is I don't think we are saying, any of us,
that everybody must work until their last breath. I think what
we are saying is, for those who wish to work, who wish to earn
a livelihood, cash-flow often takes a little bit of the worry
off of dependency and who is going to pay for this, that we
remove the obstacles, both psychological and workforce and
regulatory, so that folks may continue to be gainfully employed
in some way, should they wish.
We will need the talent and the capability of our aging
workforce. Eighty percent of the growth in the American
population over the next 25 years will come from people over
the age of 50. That is an event that has never occurred before.
This is a very serious issue.
Mr. Potter. Senator, another way to look at your question
is that, on average, each individual in our country contributes
$78,000 worth of value each year. To the extent that that value
is taken out of the economy, that is how much smaller our gross
domestic product will be. So if you take the projection in 10
years that we may be short as many as 10 million workers, 10
million times $78,000 is about $0.7 trillion off of the
national gross domestic product. So we are talking about
standard of living, per capita income, ability to deal with
hard social problems.
Senator Kohl. Will we need to make some different financial
arrangements with these people as they get older, so a person
who reaches 62 or 65 or whatever wants to continue to work, the
employer may want to continue to have that person working, but
maybe with different kinds of money considerations?
Mr. Dychtwald. For the elder himself, there is the good
news and the bad news. The good news is, as Mr. Potter has
identified, there are some regulatory shifts that I think must
occur in order to ease the obstacles to people who want to
continue working.
But from the employer's point of view, there is a concern
about merit-based versus tenure-based pay. In other words, if
two people are holding a camera for my network and one of them
is 27 and she is quite good and one of them is 67 and she is
quite good, but I am paying the older one four times as much, I
may want to remove the older one to get competitive rates.
So the idea of everybody taking a deep breath and saying,
we can make these rules more fluid, but on the other hand,
people shouldn't expect just because they have been around the
planet longer that people are going to be willing to pay them
enormous amounts, and that is a bit of a bite the bullet.
I might also add that it is not just compensation-related
work, that today, seniors have the lowest volunteer level of
any age group in America, and perhaps we might think of those
40 million retirees as an enormous national treasure that could
be reinserted back into our culture for everyone's advantage.
Having a productive elder population is a substantial link to
our future.
Senator Kohl. You made a point that I think is indisputably
true. If you have a person 67 and a person 27 and they are
equally productive and the person 67 is making 50 percent more
than the person 27, as an employer, you almost have no option
but to try and move the person 67 off your payroll, right? If
you are running a business on behalf of your shareholders----
Mr. Dychtwald. Or you might go to another country to find
workers, or you might fire that older person and then hire them
back as a contract consultant in order to get around the ERISA
and ADA and IRS restrictions. But yes, you are encumbered to
try to find a way to be competitive, and a lot of older
workers, their fee scale is difficult for employers.
Mr. Holbrook. It would seem to me, Senator, that if the
elder worker is doing the same work as the younger worker, I
have a serious concern when you say, let us get rid of the
older worker and give the younger worker more money. That is an
argument that would be very difficult in my mind to live with.
If the older worker is doing the job, producing the way that
they should be producing and would be producing, I don't
understand the logic of saying, we will take away their salary
benefits or any of their fringe benefits that they might have.
Senator Kohl. But if you can, as an employer, at some point
hire someone who is younger and just as productive at less
cost, employers are almost required to think seriously about
that because that is just the way the marketplace works, isn't
that true? I am not suggesting what the morality is. We are
talking about the requirements of people running businesses who
need to make profits. Not to say that you should move the
person out, but you make rearrangements of sorts to keep that
person employed rather than have a situation where you are
forced to move them out even though you may not want to move
the person out.
Mr. Holbrook. Well, we in AARP do not believe in mandatory
retirement, so that takes care of that problem for us.
Mr. Potter. Senator, in the context of this hearing, I
think your example is actually going to be the exception in the
future. I think the future is going to be the situation you are
going to need a critical skill that is not available by any age
demographic in your workforce and you are going to need to keep
that older worker in order to maintain the competitiveness of
that business.
Ms. Humphrey. I would like to add, too, that the more
complicated the job is, the more important it is to have that
experience. You may not run into a critical situation every day
where you need to draw on that experience, but when it happens
and you have the right experience, it can be worth its weight
in gold. That is why we try to partner our older workers with
our younger workers, because there is just too much complexity
in our environment.
Senator Kohl. Thank you, Senator Breaux.
Senator Breaux. With that, I thank very much the panel and
I appreciate their nice and generous comments.
With that, this committee will be adjourned.
[Whereupon, at 3:40 p.m., the committee was adjourned.]
A P P E N D I X
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