Making Old People Work: Three False Assumptions Supporting the “Working Longer Consensus”

• Published date: 01 December 2021
• Author: Teresa Ghilarducci
• DOI: 10.1177/0032329220987084
• Date: 01 December 2021
• Subject Matter: Articles

https://doi.org/10.1177/0032329220987084

Politics & Society

2021, Vol. 49(4) 549 –574

© The Author(s) 2021

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DOI: 10.1177/0032329220987084

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Article

Making Old People

Work: Three False

Assumptions Supporting

the “Working Longer

Consensus”

Teresa Ghilarducci

New School for Social Research

Abstract

Pensions and social insurance—key parts of the welfare state—redistribute income

and wealth across class by providing, or not providing, practical and legitimate

access to basic income without requiring work for pay. Mistaken attention to

generational equity and austerity economics creates a set of beliefs that older

people should work more, forming what the article calls an emerging “Working

Longer Consensus,” which is supported by three false doctrines. Using OECD data

and secondary sources, the article counters each false doctrine by showing that

healthy longevity gains are not distributed equally; there is no demonstrated trade-

off between public spending for the elderly and children; and a greater supply of

elder labor does not necessarily mean economic prosperity. The Working Longer

Consensus, like the Washington Consensus, promises that pension austerity will

yield economic prosperity.

Keywords

inequality, American politics, business, pensions, welfare state, labor markets

Corresponding Author:

Teresa Ghilarducci, Schwartz Center for Economic Policy Analysis, New School for Social Research, 79

Fifth Ave., 11th floor, New York, NY 10003, USA.

Email: ghilardt@newschool.edu

987084PASXXX10.1177/0032329220987084Politics & SocietyGhilarducci

research-article2021

550 Politics & Society 49(4)

At heart, welfare states determine who has claim to income without working for pay.1

Programs and systems making up the welfare state in some way or another serve to

commodify or decommodify labor. Secure pensions mean workers can claim leisure at

the end of their working lives. Similarly, care leave and paid sick leave lay claim to

income under certain circumstances. Work-hours laws lay claim to “the weekend.”

The variety of welfare state changes is caused by economic and political differences;2

this article concentrates on the similarity, not the differences, in a common welfare state

reform narrative that is emerging across the OECD. Retirement time—the elderly’s

legitimate claim to time free from commoditization—one way or another, is being con-

tested by a new feeling, not supported by evidence, that many problems will be solved if

older people work longer. This common sense in support of pension reform, what I call

the “Working Longer Consensus,”3 calls for a variety of proposals and comes in various

forms, but the more commonplace reforms are calls for reducing pensions and making

older people work more and longer.

The Working Longer Consensus represents a reversal of twentieth-century labor

union and progressive efforts to extend the ability to retire with sufficient income after

a lifetime of work across socioeconomic classes. A common welfare state tactic to

provide equity and security to those who worked in a market economy was to confer,

to all persons, paid time off at the end of their working lives.

Envisioning a “utopia” that is realistic and pragmatic was the late sociologist’s Erik

Olin Wright’s major intellectual and social project.4 A key part of Wright’s utopia was

a power balance between workers and firms, and I argue here that pensions matter in

that balance. Pensions are basic incomes and are key to older workers’ bargaining

power.5

Wright argued that a crucial task when building practical utopias is acknowledging

hard limits. This article argues that the utopia of universal retirement for those who

want it is inhibited by what people think are hard limits but are not. The evidence sup-

ports two propositions: (1) pension generosity does not drain resources from the

young; (2) forcing older people to work because they have less secure pensions does

not produce more productivity but skews power toward capital and away from labor.

The claim made by the Working Longer Consensus—that working longer helps every-

one—is untrue. Low-income and marginalized workers are hurt the most by pension

cuts because their work and life result in lower-than-average longevity and higher

morbidity. The distribution of healthy human life spans after age sixty-five is becom-

ing more unequal because of the nature of American work and the changes in the US

pension system.

The Emerging Working Longer Consensus

In July 2020, a Wharton School working paper, the title of which could be a motto for

the Working Longer Consensus (“Working Longer Solves (Almost) Everything”),6

argued for longer work lives because the authors found a correlation between cogni-

tion and work past the mid-sixties. The business case for hiring older workers includes

the acceptable and common praise that older workers provide lower turnover costs and