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The Impact of Aging Population on Labor-Management Relations in the United States

Edward Davis

Post University

HRM 303: Labor and Management Relations

Charles J. Farfaglia

March 31, 2024

The Impact of Aging Population on Labor-Management Relations in the United States

The age of the American population in the United States is growing at a high rate. According to a forecast by the Centre for Disease Control and Prevention, the population over 65 years is expected to double to about 72 million (White et al., 2018). This aged group, sometimes called the “silver tsunami,” gives rise to many problems that cut across society. The relationship between employers and employees is being changed in ways that are hard to imagine, and this aging workforce is causing this change. The paper addresses the changes the aging population creates in labor-management relations in the United States.

Why This Topic?

I picked this issue because of its importance to the current socio-economic challenges. Social aging in the U.S. is a phenomenon that has multi-faceted impacts on many aspects of national life, such as labor relations. As someone who likes demographics and labor economics, I find it interesting to research the effects of demographic change on labor-management relations and to see what policies could be implemented due to an aging workforce.

Impact on the Labor Market

The growing old population has generated a decreasing workforce participation rate due to older workers being retired, reducing the number of workers. This demographic shift has led to labor shortages in some industries and increased competition for skilled labor (Federal Reserve Bank of Boston, 2021). As an outcome, employees have more power to negotiate with management to reach higher wage compensation, better benefits, and better working conditions.

Workforce Composition

White et al. (2018) indicate that this phenomenon has also resulted in demographic shifts within the labor force, with an increase in senior workers retaining employment. They caused employers difficulties in adopting workplaces to the requirements of older employees, like the inclusion of age-friendly policies and the creation of training and skill development programs. In addition, the aged population finds it challenging to keep up with technological advancement, which has translated back to them seeing it as a career obstacle that has further resulted in tensions in the labor market.

Pension and Healthcare Costs

The healthcare system has also had a fair share of challenges due to the growing age population. They strain to keep up with the ever-increasing demand for healthcare coverage and allocation of retirement benefits (IMF, 2020). This has caused a worrying trend in the future of pension and healthcare benefits.

In summary, managing an aging workforce is a complex undertaking with many facets. Developing a more equitable and competitive work environment for all will depend on management and labor identifying obstacles and providing chances for access.

References

Federal Reserve Bank of Boston. (2021, December 20). Population Aging and the U.S. Labor Force Participation Rate. Federal Reserve Bank of Boston. https://www.bostonfed.org/publications/current-policy-perspectives/2021/population-aging-and-the-us-labor-force-participation-rate.aspx#:~:text=SinceNovember2017populationaginghascontinuedto

IMF. (2020). The Impact of Aging Worldwide on Pensions and Public Policy – IMF F&D. IMF. https://www.imf.org/en/Publications/fandd/issues/2020/03/impact-of-aging-on-pensions-and-public-policy-gaspar

White, M. S., Burns, C., & Conlon, H. A. (2018). The Impact of an Aging Population in the Workplace. Workplace Health & Safety, 66(10), 493–498. https://doi.org/10.1177/2165079917752191