If the United States is faced with a critical shortage of skilled workers, why not use older workers and selected immigrants to help solve the problem?
A new report, "An America That Works," by the Committee for Economic Development calls for changes in both immigration and federal retirement policies to retain and attract workers who already possess needed skills in the work force. These workers can be used until a new pool of younger workers can be educated and trained, according to the 40-year-old private research group, composed of corporate executives and leading academics.
"The United States is experiencing population changes that are outpacing the abilities of government, business and community institutions to cope," the report said. "Throughout the nation, the gap between job requirements and job skills is growing. Traditional ways of working and managing are also being challenged daily by new global, technological and social realities."
To accomplish this, the report calls for a wide range of policy changes in both education and business to help train a new generation of young workers to meet tomorrow's needs. Most of the suggestions are in line with the mainstream ideas that have been proposed by labor and management, government and private industry over the last several years: the development of family policies to provide incentives for employees to stay on the job, coordinating education with the needs of the workplace and better training.
But the report also questions the wisdom of corporate policies that encourage early retirements through various buyout incentives in an effort to save money in the short term. The long-term result could be that the same companies that complain about a lack of skilled workers may end up booting out some of their most capable workers, the group concludes.
It also questions the rationale of government policies that financially penalize retired workers who want to continue to work part time and whose skills are still needed.
"An array of current policies and practices fosters an all-or-nothing view of work as people get older: Their choice is generally to continue working full time all year or go into full retirement," the report said. "Retirement policies need more flexibility instead of the current rigidity. We believe that it is possible to help older workers stay active on the job in ways that will be beneficial for them and for the U.S. economy."
To achieve this, the report suggested a number of policy changes. Its first recommendation is to remove the current earned income ceiling for Social Security payments for people 65 or older. The report said the change could be made "revenue neutral" for federal budget purposes by taxing a larger portion of the Social Security benefits as the income of the recipient increases.
Another proposal would restructure corporate pension plans to remove the incentives for early retirement. This would be coupled with a job redesign that would allow more flexible hours and full-time jobs with reduced hours and attractive wages that would remove the current stigma and penalties associated with part-time work. The report also suggests that companies allow older employees to purchase additional vacation or leave time through their benefit package.
As one example of how such a program could work, the report cited the "Golden Bridge" program at Teledyne Inc. Worried about losing older skilled workers, the Teledyne program gives employees between the ages of 58 and 62 with 30 years at the company an extra 20 days of vacation. Those over age 62 get an extra 25 days each year. Employees are able to take either the time or the money, depending on how much they want to work.
Perhaps more important, older employees at Teledyne who choose not to retire earn extra life insurance and pension benefits.
The report said there was also a need for employers to establish a way of identifying workers who had already retired but might be willing to reenter the work force on a limited basis to help fill skills gaps. Other recommendations involved ways to ease the benefit costs of employers who hired older workers.
In the immigration area, the report urged the federal government to adopt a coordinated, flexible policy that would leave "adequate flexibility for rapid adjustments to changing labor markets" combined with an admission preference for immigrants with skills in short supply in specific industries or regions of the country.
Right now, 10 percent of the immigrants to the United States are given preference for admission on the basis of their skills. The group is recommending that 40 percent be given such preferential treatment by 1998.
"Regardless of whether immigrants are admitted for humanitarian or economic reasons, most wind up in the labor force," the report said. "For this reason alone, we should explicitly consider labor market issues in setting immigration policy."