AARP CEO Jo Ann Jenkins

People know that race and gender play a role in keeping otherwise qualified people from getting a good job. But silver hair can also be a discriminating factor in the workplace. Ageism is rampant in America. And it’s also bad for business.

A new study from the AARP discredits widespread myths and misconceptions about age 50 and over employees, showing that they have skills and abilities that can make them key to operating a successful business.

“Just as today’s 50-plus population is disrupting aging and eroding negative stereotypes, today’s 50-plus workforce is adding value by exhibiting traits that are highly sought after in today’s economy,” said AARP CEO Jo Ann Jenkins in her statement on the releasing the 92 page report. “Leading employers across all industries value the expertise and experience of workers 50+ and know that recruiting, retaining and engaging them will improve their business results.”

The report, “A Business Case for Workers Age 50+: A Look at the Value of Experience 2015,” says that the argument for employing older employees has grown even stronger during the last decade, reinforcing a 2005 AARP study that found that these experienced workers are highly motivated, productive and even cost effective.

Researchers claim that this study documents for the “first time why attracting and retaining experienced age 50+ workers is critical for businesses seeking an advantage in the labor market.”

The AARP report comes at a time when experienced workers are playing an increasing role in America’s workplace, research shows. In 2002, workers age 50 and older made up only 24.6 percent of the workforce. By 2012, they were 32.3 percent. By 2022, they are projected to represent 35.4 percent of the nation’s total workforce.

The AARP new study addresses a widespread misconception that older workers cost “significantly more” than younger workers. In fact, adding more talented older employees to your workforce can result in only minimal labor cost increases, says the researchers, noting that 90 percent of large employers now base pay in part on job performance, rather than exclusively on length of employment.

In addition, in terms of retirement costs, only 22 percent of large companies now offer a defined benefit pension plan, down significantly from the 68 percent in 2004.

Looking at the 50-plus segment of the workforce from a performance standpoint, AARP and Aon Hewitt say that older workers remain the most engaged age group. The study reports that 65 percent of workers age 55 and oler are considered “engaged” while younger employee engagement averages 58 to 60 percent.

Although the generational differences in engagement might not seem large, “it takes only a five percent increase in engagement to achieve three percent incremental revenue growth,” the report finds. This can translate into a large company with $5 billion in revenue achieving a $150 million revenue increase as a result of even a five percent engagement improvement, the study says.

An engaged older workforce can influence and enhance organizational productivity and generate improved business outcomes,” says the report. Other advantages of older workers include their job experience, professionalism, strong work ethic, lower turnover, and knowledge.

Contributing to Rhode Island’s Economy

“We have noted in the past the relevance of Rhode Island’s so-called Longevity Economy,” said AARP Rhode Island State Director Kathleen Connell. “Despite being just 36 percent of Rhode Island’s population in 2013 (expected to grow to 38 percent by 2040), the total economic contribution of the state’s 50-plus population accounted for 46% of Rhode Island’s GDP ($24 billion). Now we see another reason to embrace the older population.

Connell notes the “report reinforces the value of older Rhode Islanders as they continue to be a key asset in the workforce. The truth is, that older workers increase labor costs minimally while contributing experience and stability to businesses across the spectrum.

“Many employers in Rhode Island understand this. AARP Rhode Island gets frequent calls from business actively seeking older workers. They know the value and the wisdom they bring to the workplace,” says Connell.

But Oak Hill resident Hank Rosenthal, 64, says of his two year job search, after being laid off, he experienced job discrimination. “Having been interviewed by numerous Human Resource professionals, they just seem incapable of understanding that the years of experience someone has gained is an asset. They seem unable to appreciate that knowledge, experience, and even skills acquired over a lifetime can be transferred and used in virtually any organization or business,” he says.

Rosenthal, now gainfully employed, views his older contemporaries as being “more stable, reliable, have better work ethics and generally make great employees, in line with the observations of the AARP report. With the difficulty in finding employment he believes that companies have not figured this out yet. “What a terrible waste of human capital,” he says.

According to Charles Fogarty, Director of the Division of Elderly Affairs (DEA), the recently released AARP study helps his agency spread this message, “older workers are expected to play a key role in sparking Rhode Island’s comeback.”

“We support policies and programs to help this crucial segment remain active in the labor force by connecting older workers to services and training,” says Fogarty, noting that AARP’s study confirms, “our seniors are a valuable asset in our workforce given their wealth of knowledge, ability to mentor younger colleagues, and commitment to hard work.”

While older workers may be forced to continuing working to pay their bills, many employees will take jobs for both psychological and social fulfillment. Hiring and retaining older workers may be a simple way for American businesses to maintain their competitiveness in a world economy. The report says that this can easily be accomplished by having “flexible workplaces, options for transitioning to retirement and fostering generational diversity and inclusion.” The AARP report is a must read for any CEO or Human Resource Director.

For the full report, go to http://www.aarp.org/research/topics/economics/info-2015/business-case-older-workers.html.

Herb Weiss, LRI ’12, is a Pawtucket-based writer who covers aging, health care and medical issues. He can be reached at hweissri@aol.com.

Congress put aside its fierce partisan bickering and came together to pass H.R. 2 –the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). This week President Obama took the opportunity to sign the legislation package into law.

The congressional fix repeals and replaces the flawed Medicare physician reimbursement system known as the sustainable growth rate (SGR). For the past 13 years, physicians have faced the possibility of an arbitrary cut in their Medicare payments unless congressional lawmakers passed a so-called “Doc Fix” Medicare bill. Since 2003, Congress has passed 17 short-term bills to block these cuts in Medicare doctors’ fees that were called for under the existing law.

On April 14, the Senate passed the MACRA by a whopping 92 to 8 (the House passing its version of the bill in late March by a large margin, 392-37). Two days later, at an outdoor signing ceremony in the Rose Garden, President Obama signed the legislation into law, with the House bill brokers, Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) in attendance. .

A Permanent Fix Prevents Payment Cuts

Just hours before a cut in reimbursement that would take place this week, a rare bipartisan congressional effort prevented a 21 percent cut in Medicare payments to occur. It’s a permanent fix. And the new law extends the Children’s Health Insurance Program, which has provided coverage to millions of American children.

At the signing, Obama called the passage “a milestone for physicians, and for the seniors and people with disabilities who rely on Medicare for their health care needs,” noting that it would also strengthen the nation’s health care delivery system for the long run.

Obama stated this new law “creates incentives to encourage physicians to participate in new, innovative payment models that could further reduce the growth in Medicare spending while preserving access to care.”

According to the Center for Medicare Advocacy (CMA), a national nonprofit, nonpartisan law group that provides education, advocacy and legal assistance to older people and people with disabilities, the estimated cost of the new law is roughly $214 billion over 10 years. CMA says roughly half (approximately $35 of the total $70 billion over 10 years) will come from Medicare beneficiaries through changes that will increase their out-of-pocket costs for health care.(through means testing of higher-income Medicare beneficiaries, increased Part B premiums, and added deductibles to Medigap plans purchased in the future.”

CMA adds that the nation’s pharmaceutical and insurance industries were not required to pay for any of this law, although doing so would have paid for a major portion of the SGR replacement.

Crossing the Aisle

“The Sustainable Growth Rate formula threatened the stability of the Medicare program, and I’m glad we were able to pass a long-term solution to address it. I believe it was a reasonable compromise that will provide financial certainty to health care providers while protecting benefits for low and middle-income seniors,” said Senator Sheldon Whitehouse. The Democratic senator, a member of the Senate Special Committee on Aging, notes that the new law will “boost efforts to pay providers based on quality and outcomes of care, an area where Rhode Island has been a leader.”

Rep. David N. Cicilline gave his take on the new law. “Fixing the Sustainable Growth Rate formula will help ensure that more than 180,000 Rhode Islanders who receive Medicare benefits can keep their doctor and continue to receive quality, affordable health care when they need it, the Democratic Congressman said, noting that “We need to see more bipartisan solutions in Congress like this one.”

Finally, Rep. Jim Langevin, adds, “Although this compromise wasn’t perfect, I am pleased that Congress could come together in a true display of bipartisanship to reach an agreement that increases access to quality heath care for our most vulnerable seniors, provides stability and predictability for physicians and extends the crucial Children’s Health Insurance Program.”

On the Backs of Medicare Beneficiaries

Aging advocacy groups, including the Center for Medicare Advocacy and AARP, failed in their attempts to improve the Senate bill Medicare beneficiaries, including a repeal of the annual therapy caps, raising eligibility standards for low-income programs and permanently extending outreach and education funding for critical programs aimed at low-income beneficiaries. The Senate bill passed without amendments.

While many gave thumbs up to the new law, Max Richtman, president and CEO of the Washington, DC-based National Committee to Preserve Medicare and Medicaid, sees big problems with MACRA.

“The Senate ‘Doc Fix’ vote has traded one bad policy for another, shifting the costs of Congress’ failed Medicare payment formula for physicians to seniors who can least afford to foot that bill. Contrary to claims by supporters, on both sides of the aisle, this ‘doc fix’ will hit millions of seniors who aren’t ‘wealthy’ by any stretch of the imagination. Seniors at all income levels who are already paying steep premiums for Medigap plans to help control their health care costs will now be hit with even higher costs. 46 percent of all Medigap policy holders have incomes of $30,000 or less, he said.

“Medicare beneficiaries will also be forced to contribute nearly $60 billion in premiums over the next decade thanks to passage of this so-called ‘fix,’” Richtman added. “It’s no surprise that conservatives applaud this legislation as ‘the first real entitlement reform in two decades’ because it fulfills their political goal of shifting costs to seniors, cutting benefits and expanding means-testing to push Medicare further and further away from being the earned benefit seniors have long valued and depended on. Trading a bad deal for doctors for a bad deal for seniors is not a legislative victory and it is a surprising move from so many in Congress who have previously vowed to protect Medicare from harmful benefit cuts and seniors from cost-shifting.”

AARP CEO Jo Ann Jenkins also expressed strong disappointment in the Senate not passing an amendment that would have removed Medicare’s arbitrary cap on physical therapy, speech language pathology, and occupational services. “Many Medicare patients, particularly stroke victims and people with Parkinson’s and Multiple Sclerosis would have benefited,” says Jenkins. With a majority of the Senate agreeing with this amendment, Jenkins says that AARP will continue to lobby to remove the arbitrary coverage cap.

But, Jenkins sees the positives. “Passage of MACRA moves Medicare in the right direction toward better quality health care and greater transparency for patients. These changes will benefit Medicare beneficiaries, as well as physicians and other providers, hospitals, and the overall health care system,” she says.
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Through the enactment of MACRA Congress put aside its political differences that made a permanent fix to a flawed law. If you can do it once, let’s see our lawmaker do this again, to provide improved programs and services to our nation’s older population.

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Report: Hiring older workers is good for business