The New York Times asked me to comment on the widely held view that we need to push older workers into retirement in order to make room for the young. I think it’s bunk. Here’s my comment:
I object to the concept of “making room” for young people. The U.S. is not a mythical Eskimo village, where we march old people off to ice floes when there’s not enough blubber to go around. An economy is not a zero-sum game. I would advise young people to stay far away from any company that can’t see future growth and merely sees one cog in the wheel replacing another.
For society as a whole, enticing experienced people to stay on the job is a good thing. In my book RUSH, I argue that the sooner we push older workers off to retirement, the more depressed they get, the sicker they get, and the more it costs in Social Security and Medicare. And who pays for those higher costs? Young people who must pay higher taxes. And what does that do? Destroy incentives for new jobs!
What should we do about older workers whose productivity is slipping? First, make fair comparisons. In 1929, Babe Ruth hit 23% fewer home runs than in 1927 but was still the best in baseball. If a worker’s output is slow compared to his competitors, something must be done. Unfortunately, convoluted regulations undermine firms trying to develop flexible policies. Between the Employee Retirement Income Security Act of 1974 (ERISA), the Age Discrimination in Employment Act (ADEA), and “Obamacare” 2010, only the sharpest labor lawyer has a clue how to arrange a flexible benefits programs for downshifting workers. Companies often outright fire workers before even considering rehiring them on a part-time basis.
To save pride and to save time, Congress should pass a “Single Purpose Consultancy Act,” which would allow a worker and his company to create within 5 minutes on one sheet of paper a consultancy arrangement that bypasses most of the regulatory stumbling blocks.
Finally, for professions that are high-risk to the client, we must be decisive and firm: Nobody wants to go under the knife with “Shaky” Johnson, the prostate surgeon.