Strategic Human Resource Management

Section Two

An Aging Workforce

As indications of aging trends, the median age for the U.S.
population will increase from 42 in 1998 to 45 by the year
2008, while the median age for the labor force will increase
from 39 in 1998 to 41 in 2009.^88 Some of the implications of
aging are that the workforce will be more experienced, stable,
and reliable. As a result, it should be more productive.
However, an older workforce may lead to less flexibility as older
workers may not adapt as quickly to a dynamic economy.
Greater costs will also result from greater pension contributions
that are likely to be associated with an aging workforce.^89 One
implication of this trend is that as the workforce ages there
should be correspondingly greater health care costs. Huge
increases in health care costs have already occurred.^90
Companies’ age distributions have already begun to affect their
production costs and ability to compete. Interestingly, during
the postwar period in which Japan’s remarkable economic
growth occurred, it had a relatively smaller proportion of retired
people to support than other industrial countries.^91