Labour and Employment Ministers’ Meeting

Living longer needs more work-life choices

Demographic changes will lead to a ‘multi-stage work life’ said ILO Director-General, Guy Ryder, at the G20 Labour and Employment Ministers meeting in Matsuyama, Japan. He was speaking at a session on “Demographic Change: Employment of older workers and longer working life.”

Statement | Matsuyama, Japan | 01 September 2019
(PowerPoint Presentation: Slide 1)

Thank you very much Chair. Good morning, Ministers and Colleagues.

I will recall to begin with that in G20 Leaders’ Osaka Declaration, they noted that they expect working lives to become longer, and invited G20 Ministers of Labour and Employment to identify policy priorities to respond to that situation. I am glad to provide some ideas to help do so this morning, on a theme that lies at the heart of the future of work.

(Slide 2: People – and the labour force – are growing older)

Let me begin by reiterating what you have said this morning, Chair. There is a growing chance that children born in Japan, and increasingly in other G20 countries, have a strong possibility of reaching 100 years old.

Of course if we look beyond the G20 we see a great deal of demographic diversity as well. If you attended the meeting of TICAD 7 in Yokohama last week – and I had that opportunity – it was clear that the African demographic transition is still 30 years down the road. As a global organization, we are obliged to frame our discussion on demographic transition in the context of that global reality.

But this is an important success; a piece of very good news. However it has a number of consequences if we are to extract maximum advantage for the world of work, and let me start with two things.

Firstly, as people will have increasing time in their lifetime than in the past or even today, they might want – or need – to change the way they plan their life. They should be able to accumulate assets such as housing or savings over a longer period. They may be able - or need - to defer some important decisions because they have more time ahead of them.

So we might be moving to what we could term a “multistage work life”. It will be important that people be empowered to take choices and to pursue their preferences in their working life – and this is very much in line with the concept of self-determination that the high school students put to us in their presentation here today.

The second consequence of longer lives is that societies have to change and adapt to take advantage of such longevity. This entails not just behavioural but policy changes by all partners – the workers themselves, and governments and enterprises, too.

(Slide 3: Work life patterns have started to change)

This graphic shows what labour force participation rates have looked like in the past 20 years or so.

Between 1998 and 2018, the labour force participation rate of people aged 55 to 64 has increased, especially for women; for the age group over 65, participation has increased for women but decreased for men. These changes, as you see on the graphic, are, however, not very big at this point.

At the other end of the age spectrum, the labour force participation of young people aged 15 to 24 has decreased significantly; this is mainly, of course, because they stay longer in education.

This is taking place in a context of many other changes, and let me indicate a few:
  • Part-time employment is increasing – which, when chosen and not involuntary, can often give people additional time to care for family members or engage in re-skilling.
  • Temporary employment is going up – it accounts now for 45% of young workers in the European Union, for example.
  • Young workers change jobs more frequently than older workers, and more often than in the past.
  • We also see this happening for people between 25 and 54, but to a considerably lesser extent than for youth.
  • More men are taking paternity leave in countries where this is possible, which can potentially constitute a very important change in work-life patterns.
  • Double-income families are becoming the norm and partners alternate more between working, not working, and working part-time to free up time for other activities, again including re-skilling and child or elderly care.
(Slide 4: From a three-stage life to a multistage life)

Colleagues, this brings me back to the concept of a multi-stage life.

To take a first conclusion we could draw, we do seem to be moving away from the sequential three-stage-model of education – work – retirement to a multi-stage model with people transitioning more often between jobs, between occupations, between job status, and out of the labour force and back in.

This increased number of transitions responds to new expectations from generations that can hope to live for 100 years; but evidently, this brings new challenges and the need to re-think and re-design existing policies and institutions; although it’s worth reflecting as well if these challenges are really so new. Chaotic careers or working lives always existed, if we think of workers in the informal economy or agricultural workers who need multiple jobs simply to get by; or think of those afflicted by episodic unemployment or by precarity at work. This has always been with us. So what is needed to change this potentially negative situation into something much more positive?

Perhaps, instead of thinking about policies for a specific phase in life, for example education at the beginning, we need to redesign our policies and institutions to take a full life cycle approach. This would apply to tax and benefits systems as well as to education. New regulation and legislation might be needed to support transitions. In short, supporting longer lives through multi-stage approaches requires that we adopt enabling policies with this life-cycle perspective.

These changes, however, might bring into play another consideration, that of inequality. We already know that inequality in life expectancy exists; in some cases it’s very marked. There are inequalities in educational attainments, in access to labour institutions, and much else. Very often, these separate inequalities are cumulative in their impact on individuals.

Our policies therefore need to ensure that supportive measures are in place to actively decrease inequalities: by addressing the causes of life expectancy inequalities, adopting multi-tiered pension systems that allow people to retire earlier because for example of a lifetime of poor or harsh working conditions, and increasing investments in different life stages, not just any single one. It’s important, I think, that we should avoid investing only in education and infant care, but also invest in adult education and lifelong learning so that it becomes possible to learn at any stage in life.

Last June, as participants have already recalled, the International Labour Conference adopted a Centenary Declaration that calls for more investment in the institutions, the policies and the strategies that will support people through these various transitions. That Declaration can help to guide us all towards a future of work where a longer working life becomes a choice and responds to people’s aspirations.

(Slide 5: Towards a multistage life: what are the challenges?)

So what are the challenges we face when moving towards these new patterns of living and working?

Firstly, education and training systems are in many cases today not fit for encouraging and supporting these multiple transitions we are talking about. Investments in lifelong learning are stubbornly low – for adult training it is only 1 per cent of total public expenditure globally. In addition to low investment, adults – and particularly older adults – have low participation rates in Lifelong Learning; disadvantaged groups participate less than others in adult training and need different forms of Lifelong Learning. Whilst women do participate in adult training this tends to be in a disturbingly narrow range of skills.

Second, social security systems are still predicated on the old model of a three stage life cycle. Transition periods bring a high risk of no benefits coverage at all. And indeed, adapting existing systems is going to be a formidable task. Ensuring their sustainability to support an increasing number and a wider diversity of transitions will be a challenge, and one we all need to address together.

Third, there are other policy areas that need adjustments:
  • Negative perceptions about older persons are still driving people’s attitudes and decisions: opting for a transition (at the individual level) and hiring and retaining older workers (on the enterprise level) are not yet generally seen as the opportunities that in fact they can be.
  • Workplaces and work arrangements are insufficiently supportive of diversified life styles.
  • Labour market policies tend to focus understandably on youth, but sometimes to the disadvantage of older workers.
  • And even though enterprises created by people above 50 have a much higher survival rate than those created by young people, entrepreneurship training is offered mainly to young people.
(Slide 6: Policy building blocks for a human centered approach to longer working lives)

So to conclude, for a 100 year lifespan to become the unambiguously good news which I referred to at the outset, we need both enabling measures to encourage transitions and supportive measures to decrease inequalities.

I can see three policy building blocks that may enable us to do just this:
  • Firstly, a skills ecosystem that provides more and better opportunities for people to participate in training and education activities throughout their lifetime, according to their needs and aspirations. In addition, individuals, enterprises and governments need to share responsibility for lifelong learning. Extended and new financial incentives for workers, enterprises and institutions alike, if smartly designed, can help steer the provision of training to reach different groups and sectors where they are most needed.
  • Secondly, a social protection system that closes existing coverage gaps (including for people in the informal economy, rural areas and self-employed, and in new forms of employment), and systems that overcome the obstacles to continued coverage. Combining enhanced social insurance mechanisms with stronger tax-financed provisions will ensure universal coverage throughout the life course.
  • And thirdly and finally, decent work for older workers through improved active labour market policies and public employment services. We need changed perceptions by employers and in enterprises towards older workers and people changing jobs, and we need to use new technologies and time-related measures, such as flexi-time or part time, to support active ageing.
If we get this right, Ministers, a 100-year life with multiple transitions could provide everyone with a fulfilling and decent one hundred year life, just as the ILO has managed!

Thank you.