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Abolishing the Age Barrier: A Call to End Mandatory Retirement

retirement – Next Exit Road
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October 12, 2023

By Chris Kihereko, 2023 Social Connectedness Fellow

In today’s rapidly evolving world, the concept of retirement is undergoing a profound transformation. As average life expectancy continues to rise and a diverse range of talents and skills become essential for organizational success, the archaic practice of mandatory retirement stands as a stark reminder of ageism in the workplace. For decades, this policy has stifled the potential of older workers and perpetuated harmful stereotypes, depriving society of valuable contributions from a segment of the workforce brimming with experience, wisdom, and dedication. 

Age Diversity

Age diversity offers a unique opportunity for companies to harness the wealth of knowledge and experience possessed by employees of different age groups. As the workforce becomes more age-inclusive, businesses can capitalize on the diverse skill sets and perspectives of their employees, leading to enhanced problem-solving, creativity, and adaptability.

One of the key advantages of age diversity is the mitigation of risks associated with workforce disruptions. In traditional workplaces with a homogeneous age structure, companies often face the challenge of multiple employees leaving simultaneously due to shared life events, such as retirement. However, an age-diverse workforce presents a more stable and resilient environment, reducing the impact of such occurrences and enabling businesses to maintain continuity even amidst unforeseen circumstances.

Moreover, embracing age diversity can pave the way for improved business-to-consumer and business-to-business relationships. By reflecting the age groups of their clients in their workforce, companies gain invaluable insights into customer needs and preferences. This deeper understanding enables businesses to tailor products and services more effectively, fostering stronger connections with their target audience and driving customer loyalty.

It is essential to dispel the misconception that age diversity may hamper productivity. On the contrary, studies have shown that a multigenerational workforce can enhance overall productivity. In fact, it seems likely that an increased presence of older workers enhances the productivity of younger employees, as the latter can gain valuable insights and knowledge from their more experienced colleagues. The symbiotic exchange of knowledge and skills creates a dynamic and cohesive workforce, where each member’s strengths complement one another, resulting in increased efficiency and effectiveness.

Additionally, as productivity growth in advanced economies faces stagnation, businesses must explore innovative strategies to boost performance. Age diversity offers a promising avenue for growth, where a collaborative and inclusive work culture can fuel productivity gains. Companies that prioritize age-inclusive practices can outperform their competitors, attracting top talent and reinforcing their position as employers of choice.

To fully harness the potential of age diversity, companies must implement appropriate policies and practices. Creating an inclusive work environment that fosters open communication, mutual respect, and recognition of individual contributions is paramount. Companies can also invest in training and development programs to bridge any potential knowledge gaps and empower employees of all ages to stay up to date with the latest technologies and trends.

Intergenerational equity

The argument for mandatory retirement based on the concept of rationing job opportunities is not without its flaws. While proponents claim that mandatory retirement can create employment opportunities for younger generations, this rests on the controversial assumption that the demand for labor is fixed. The “lump of labor fallacy” arises from the mistaken belief that there is a limited pool of jobs, and by keeping older workers in their positions, younger individuals are deprived of opportunities.

However, the reality is more nuanced. In most industries, the demand for labor fluctuates over time, and it is not necessarily a zero-sum game where older workers’ presence directly limits opportunities for younger ones. An example of this can be seen in the post-war increase in women’s labor force participation. As more women entered the workforce, the demand for labor did not decrease but rather expanded, leading to economic growth and increased consumption.

Moreover, studies have indicated that increasing the employment of older individuals does not negatively impact job opportunities or wage rates for the younger workforce. If anything, the opposite may be true, suggesting that older workers’ continued economic activity can contribute positively to the labor market.

It is important to recognize that the lump of labor fallacy may not apply universally to all industries. In some sectors with stable labor demand, mandatory retirement might have intended effects, but this is not necessarily the case for the majority of the labor market.

Justice in the labour market

But beyond the issue of ageism, there is a broader concern at play – that of justice in the labor market. A multi-dimensionally just labor market should ensure that all employees can avoid the worst forms of the ‘bads of work’. These bads encompass factors that undermine employees’ ability to lead a decent life, such as health risks, lack of work-life balance, and oppressive workplace hierarchies. Justice demands that these negative aspects of work should be minimized, if not eliminated entirely, for every worker’s well-being and dignity.

Moreover, the distribution of opportunities for realizing the goods of work itself becomes a matter of justice. The “goods of work” refer to the positive aspects of work that motivate people, such as attaining various types of excellence, making a social contribution, experiencing a sense of community, and gaining social recognition. These goods are essential for individuals’ welfare and capabilities, and a just labor market should ensure that access to such goods is not disproportionately limited to certain groups based on age or any other factor.

John Rawls’ concept of justice as the fair distribution of the benefits and burdens of social cooperation has profound implications in modern societies where paid work is a primary form of social cooperation. As most individuals must engage in paid work to sustain their livelihood, the structure of labor markets becomes a crucial aspect to consider when discussing justice and its impact on people’s ability to lead decent lives.

The value of work extends far beyond simply earning a living. Work holds immense significance for individuals, society, and the economy, contributing to personal fulfillment, social cohesion, and overall well-being. It is a means through which individuals can realize the goods of work, finding purpose and satisfaction in their contributions to society.

Mandatory retirement policies, while originally implemented with certain intentions, often contradict the inherent value of work and its importance to individuals and society. They impose artificial barriers on older workers, depriving them of the opportunity to continue contributing meaningfully to the workforce and society at large. Such policies not only perpetuate ageism but also hinder the achievement of justice in the labor market by restricting access to the goods of work based on age, rather than merit, capability or willingness.

In conclusion, a multi-dimensionally just labor market should promote age diversity and inclusivity, recognizing the value of experienced workers and the contributions they can make to organizations and society. Embracing age diversity will not only lead to more robust and adaptable companies but also help dispel ageist biases that have held us back for far too long. By creating age-inclusive workplaces that value the goods of work and ensure fair access to opportunities, we can build a more just and thriving labor market that benefits individuals of all ages and promotes the greater welfare of society as a whole.


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