3.2  Demand-side issues

The prospect of both a shrinking and an ageing work force poses interesting questions as to how employers will respond to these changing demographics. Is age discrimination a prevalent factor in the New Zealand labour market and if so will employers, faced with declining labour supplies, be proactive in training their older workers and seeking to retain their human capital?

Surveys of employment trends amongst old-age[12] workers suggest that age discrimination may be present in the New Zealand labour market. A recent survey of workers over the age of 55 suggests that older workers are passed over for training and promotion on the basis of their age (McGregor 2000)[13], indicating a bias against older employees.

Of course what may appear to be discrimination against workers on the basis of age may in fact be justifiable commercial practices. For instance, there is evidence that wage increase demands are an increasing function of age. The “Employment of the Older Worker” (McGregor 2000) survey showed 65.3 percent of respondents agreed that “Pay should increase automatically with length of service”. In the same survey 48 percent of respondents agreed with the stereotype that “Older workers are more likely to have problems with technology”. Thus it may be considered reasonable that training is focussed on younger workers, who do not receive, or at least demand, high wages by virtue of their length of service, subsequently making the marginal cost of their labour less than older workers whilst the marginal benefits of training younger workers are likely to be greater.

In the case of those older workers who are not currently employed there is evidence that they, increasingly, do not have the skills required by employers. Unemployment statistics show that people between the ages of 45 and 54 who become unemployed are more likely to be long term unemployed - unemployed for a period of twelve months or longer - than any other age group; between 1989 and 2000 the proportion of long term unemployed who were aged 45 to 54 increased from 30 percent to 46 percent (McGregor and Gray 2001).

These statistics could be seen as indicative of discrimination against older workers, however 38 percent of respondents in the “Mature Job Seekers in New Zealand” survey claim that “older workers [not having] the right skills” is a major barrier to employment for mature job seekers. Also 37 percent of respondents in the same survey say that, personally, they do not have sufficient computer skills to gain employment (McGregor and Gray 2001, p.19). These statements suggest that high levels of long term unemployment amongst older workers is not due to discrimination but due to a lack of marketable skills.

A lack of marketable skills amongst older workers is, strictly speaking, a supply side issue. However it is included in this section because of the evidence that older workers have difficulty accessing firm training programmes. It is probable that firms will have to adjust training programmes towards the needs of older employees if they are to cope with labour (and potentially skill) shortages in the future.

Finally, one may argue that while employment practices will eventually adjust in response to changes in the labour market, organisational cultures do not necessarily adapt in the same way that markets do and certainly when they do adapt, a response may only arise after a considerable lag[14].