Impact of an Aging America on Individuals and Institutions

AARP Executive Vice President Nancy LeaMond delivered the following speech on the impact of an aging America on individuals and institutions in an address to AARP staff and volunteers this morning:

 

Impact of an Aging America on Major Institutions

Good morning. Welcome to the 2014 State & National Group Leadership Summit.

And a special welcome to the staff and volunteers who traveled from every corner of the country — and beyond — to be here this week.

I’d like to begin my remarks by talking a little about disruption — something you’re going to hear about during this summit.

These days, you can’t pick up an industry publication, attend a conference, or follow your Twitter feed without hearing about the disruption economy … technology disruption … business disruption … social disruption …

I recently heard someone use the term ‘disruptive disruption’ … what does that even mean?

As Judith Shulevitz of the New Republic said:

Sometimes buzzwords become so pervasive, they’re almost inaudible — which is when we need to start listening to them … disruptive is like that.

In our fast-moving, fast-changing and unpredictable world, there are disruptive events that have an outsize influence on the way we live, the way we work.

And nobody knows this better than all of you.

Because AARP is at the epicenter of one of the most disruptive events of our time — the aging of America.

On Jan. 1, 1946, the first of 78 million baby boomers was born … and on January 2011, those boomers began turning 65 — representing the most significant demographic shift in our nation’s history.

Every seven seconds, someone turns 50 … 12,500 people every day.

By 2030, 1 in 3 Americans will be over the age of 50 — and the 65-plus population will double to 72 million.

And this isn’t a passing trend.

When you look at the sheer numbers of boomers, Gen Xers and the millennials behind them — and when you consider how long these folks will live — simply put, America will be an older country from here on out.

Think of the magnitude of this shift for AARP.

Today, our 50-plus constituency is 109 million strong.

In just 15 years, the number of people 50-plus will increase to 132 million!!

As America grows older, it will be a different kind of older — different than previous generations.

For one, the face of aging literally looks different.

While the Silent Generation was by and large homogenous, not so for the generations that followed.

According to the latest Census, the 65-plus population will nearly double to 40 percent minority in 2050.

Another significant difference between us and our forebears is that we’re living longer — the average life expectancy in the U.S. is up to 78 years, a full 13 years beyond traditional retirement age.

Rather than just lengthening extreme old age, the 30 years we’ve added to our lifespans in the past century resulted in a much longer middle age — meaning that we’re adding healthy years, not debilitated ones.

We’ve even developed a new mindset about aging — it’s called denial.

As Nora Ephron said: “There’s a reason why forty, fifty, and sixty don’t look the way they used to — and it’s not because of feminism, or better living through exercise. It’s because of hair dye.”

Amid this great age wave, society is responding, adapting and changing — creating new rules and placing new expectations on people, on families.

Individuals have to figure out what to do with the two or three decades that their grandparents didn’t have.

You could say that this is the era of the individual — when everyone gets to be “CEO of my life.”

In some ways, this is a luxury. But in many ways, it’s also a burden.

More and more, there is increased responsibility on people to navigate this new life stage:

… from figuring out how to make limited retirement savings last;

… to understanding an increasingly complicated health care system;

… to reinventing themselves to stay relevant and wanted in the workplace — at a time when age discrimination is prevalent.

… to serving as an emotional adviser, caregiver and financial resource to children, parents and grandparents.

It goes without saying that the aging of the United States has significant implications for the people we represent, and enormous consequences for our organization — because AARP’s agenda, and our entire body of work, is devoted to improving society so that people can age with dignity, with independence and with purpose.

In SNG, we live and breathe these demographics.

We see the statistics of demography come to life in our everyday work, and through the individuals who engage with us.

They come to our programs. They support our advocacy. They volunteer with us. They raise their voices. They tell us what they want and what they need.

At AARP, we know the issues — and the people — intimately.

And we know that the aging of America — indeed, this new way of aging — will have profound implications for society — not just for individuals, but also for major institutions.

Just look at the institution of government — which has been deeply involved in the business of aging ever since Social Security was created in 1935.

The sheer numbers of boomers will present challenges to Social Security, Medicare and Medicaid — programs that are central to the health and retirement security of millions of older Americans.

For four years — since Simpson and Bowles issued their report in 2010 — Washington has been locked in a pernicious conversation, with a frame that is born of spreadsheets and numbers

… a frame that ignores the economic struggles of so many Americans; a frame that pits generation against generation.

Through You’ve Earned a Say, we’ve been pushing for a different conversation — about real people and their families.

We need to talk about quality of life, about empowerment and support.

For Social Security, we need a debate with all decision makers around the table — Republicans, Democrats and the president.

The debate should focus on responsible solutions that will keep the promise to current seniors, and strengthen the program for future generations.

At the same time, we need a broader debate about what it will take to ensure that people have financial security and savings for their 70s, their 80s, their 90s.

It’s not just about making it to retirement. It’s about making it through retirement.

Health care will be more complicated.

The rapidly increasing number of older Americans has far-reaching implications for our nation’s public health system — and will place unprecedented demands on the provision of health care and aging-related services.

Medicare is obviously critical for more than 50 million beneficiaries — but it’s also a key indicator and driver for the entire health care system.

We must stabilize Medicare for future generations, continue to look for efficiencies and opportunities to drive down costs, and keep the promise we’ve made to seniors by pushing for responsible, commonsense solutions.

At the same time, we need to better understand the Affordable Care Act and what it means for the future of health care in America.

There has been so much attention on getting the ACA website and exchanges up and running; we’re just beginning to unpack how dramatically it will influence the delivery of care.

Undoubtedly, our federal government plays a major role.

State and local governments also play an important and evolving role — from delivering and supporting long term care, to enhancing public health, to ensuring that our infrastructure is able to support the needs of a changing constituency, to serving as guinea pigs and laboratories for innovations in personal saving.

Unfortunately, while demand for government services is on the rise, federal and state budgets continue to suffer in the wake of the recession — and there are limited resources to go around.

AARP’s job is to make sure that our public officials make the best use of those resources.

Our job is to push them to champion new solutions that address new challenges.

Our job is to make sure that today’s older Americans — and tomorrow’s older Americans — are not ignored … are not forgotten … because we cannot allow ourselves to revert to a modern-day version of our founder Ethel Percy Andrus’ friend, who lived in a chicken coop.

At the same time, we need to create, and participate in, a real dialogue about intergenerational fairness.

There is a small — but very loud — group of opinion leaders in this country who have created a polarizing narrative about intergenerational warfare — about generations robbing other generations.

This is an overly simplistic and false picture.

Instead of helping us come together to solve our country’s problems, this narrative pushes us farther apart.

We need a conversation that reflects the complexities and nuances of how generations work together, live together, support one another:

… a conversation that considers that more than 6 in 10 grandparents provided financial assistance or monetary gifts to their grandchildren in the past five years;

… a conversation that recognizes that almost 3 in 10 adults between the ages of 40 and 59 are providing primary financial support to a child 18 years or older;

… a conversation that appreciates that the average family caregiver spends $5,531 or more in a year on expenses to care for their family member.

Clearly, older Americans and boomers are committed to family.

Their legacy is not to amass wealth or to take away from the health and prosperity of our nation — their legacy is to leave a positive, lasting impact on society for their kids, grandkids and future generations.

So absolutely, let’s talk about generations and intergenerational fairness — but let’s have a real conversation that reflects the real America that we all know.

With increasing demand and limited resources, we can expect added pressure on the social sector — nonprofits and charities alike — to help fill the gap.

Of course, nonprofits face the same squeeze as government: Resources are scarce.

And there will be even more pressure on organizations like AARP to bring resources together in a more efficient, more systemic way.

While nonprofits may be strapped for cash, there is some good news.

The aging of America has given us an enormous reservoir of volunteer talent — millions of individuals who bring decades of life and work experience, commitment and passion.

Boomers have the highest volunteer rate of any age group — indeed, more than 33 million people over the age of 45 volunteered their time and skills in 2012.

In order to take advantage of this talent, nonprofits will need to change the way they attract, train and retain their volunteers.

And they will need to redefine, renew and rethink volunteers for a new era.

There will be significant competition for this “army of useful citizens.”

AARP must continue to adapt, change and innovate in our quest for volunteers — because we cannot deliver on our mission without them.

As the nonprofit community looks at boomers and sees potential volunteers, businesses and marketers are finally starting to see potential customers.

And they would be remiss not to — because aging boomers represent a powerful opportunity.

Indeed, it’s hard to ignore the unprecedented, collective wealth of the boomers — which far surpasses any generation before them.

In 2010, disposable income for Americans 50-plus was over $3 trillion.

As a group, the over-50 crowd controls almost 80 percent of U.S. aggregate net worth.

Historically, businesses and marketers have chosen to target the younger in lieu of the older — Nielsen estimates that less than 5 percent of advertising dollars are geared to people 35-64.

But savvy businesses, investors and marketers are beginning to give older consumers the attention they deserve.

In boomers, they see a market opportunity — they see the “longevity economy.”

AARP’s challenge — indeed, our opportunity — is to figure out where we can put our stamp on the market, which will respond to the aging of America with our without us.

We must determine where we can influence, where we can insert ourselves, and how we can move the market to better serve our constituency.

Look at what we did with KB Home, one of the largest homebuilders in the nation.

We encouraged them to market a suite of products — which they call “simply living” — to bring greater attention to universal design features that help people age in place.

Sure, KB is a socially responsible company. But they’re also focused on the bottom line — and they recognize the power of the boomer market.

Of course, businesses will have to adapt in more ways than one — not just to market forces, but also to the changing nature of their workforce — and their role as employer.

Talent recruitment, management and development is a unifying factor that cuts across major institutions.

As the population ages, so too does the American workforce — whether it’s nurses, retail workers or, yes, even the New York Yankees …

Although some people will retire with decent pensions, many will continue to work.

Some will work because they want to, most because they have to — 50 percent of nonretired boomers have little confidence they will ever be able to retire.

In a nutshell, there’s a new word for retirement: It’s called “work.”

Just as the inclusion of women changed the workplace in the 20^th century, the aging population will certainly change the workplace in the 21^st century.

For the first time in modern history, the workplace spans four generations — with 20-year-olds working side-by-side with 70-year-olds.

And despite the pervasive myth about older workers taking away jobs, the truth is: There’s room for everyone.

In a report entitled “Are Aging Baby Boomers Squeezing Young Workers Out of Jobs?” the Center for Retirement Research found no evidence that increasing the employment of older persons reduces the job opportunities or wage rates of younger persons.

Boomers make up about one-third of the U.S. workforce, and employers must develop new policies and practices to meet the changing wants and needs of older workers — a highly educated, capable and sizable segment of the workforce.

And businesses must figure out how to offer more flexibility, as more and more people face caregiving responsibilities.

Some employers are ahead of the curve, because they recognize the value of an age-diverse workforce.

Unfortunately, some employers don’t share that sentiment.

Age discrimination remains a significant barrier to many older Americans who want to keep their jobs, or to get new jobs.

And yet, in our legal system, age is the easiest form of discrimination — which is why we’re working so hard to remedy the Supreme Court decision that made it almost impossible for victims of discrimination to have any kind of recourse.

And as we wage this fight, we continue to face significant resistance from the business lobby.

We want to level the playing field, because we believe that no one’s possibilities should ever be limited by their age.

AARP has a long history in the older worker arena — serving as a resource to both individuals and employers, and as an advocate for those folks who need an ally.

As we build out our new enterprise effort on work and jobs, we will look to replicate tried-and-true strategies, at the same time that we look for new ones.

And finally, I want to mention one more institution that spans public and private, for-profit and nonprofit — the built environment.

Just as people are aging in place, communities are also — by and large — aging in place.

Unlike Jerry Seinfeld’s parents who famously moved to Florida, today’s 50-plus are staying put — 83 percent of boomers expect to stay in the very same house when they retire.

In essence, they are opting for friends and grandkids over palm trees and putt-putt.

Cities and communities will be challenged with responding to the wants and needs of an age-diverse constituency.

Based on our research with Governing magazine, we know that states and communities are largely unprepared for the massive demographic shift.

Many people indicate that they lack the kind of access and proximity to the services they want and need as they get older, their homes are not conducive to aging in place, and they don’t have transit and transportation options to get around their community.

That said, there are pockets of progress and innovation across the country.

Communities — large and small — are taking action because it’s the right thing to do, and because it’s good for economic development.

Fortunately for AARP, we have been on the vanguard of this movement.

And I can safely say that we are the only organization that is making the connection between aging communities and livable communities.

So these are just five sectors — but we know that every part of our country and our economy will be impacted by, and play a role in, the aging of America.

From design to health care to education … no corner of society will go untouched.

At the same time that we look at major institutions, we can’t lose sight of the fact that some of the most interesting and innovative things are happening from the ground up.

When people don’t have access to societal or structural supports, they will create them.

Look at the growing number of Americans who are moving into group houses for mutual support — and I’m not talking about Jennifer Aniston and Courteney Cox. I’m talking about Bea Arthur and Betty White.

Look at what’s happened with the naturally occurring retirement communities, where neighbors are working with neighbors to ensure their community has the services and amenities that help them age in place.

And we’ve seen the power of the people through the explosion of crowdfunding. The company Kickstarter has already channeled more than $1 billion in pledges from 5.7 million donors to fund 135,000 creative projects.

Just as states and communities are laboratories for innovation, so too are the citizens — and volunteers! — who band together to bring about change.

In closing, I want you to know that AARP and our members are counting on all of you.

We have an ambitious agenda. We have so much that we need to deliver this year, next year and in the years to come.

Make no mistake. The challenges are great:

… individuals are not prepared for the future, and they are entering their 50s less financially secure;

… institutions are adapting at varying rates, with varying degrees of success;

… policies and programs are built for the 20^th century — not for 2020, 2030 and beyond.

And this is where AARP comes in.

We are at the nexus of the individual and the institution.

We have the experience, the resources, the clout and, most importantly, the leadership to play a pivotal role in the aging of America.

We must take advantage of opportunities to shape the conversation — to shape the market — to shape the policies and practices of government, businesses, employers and nonprofits alike.

At the same time, we must continue to develop new tools, new resources and new channels to help individuals navigate the opportunities and challenges that come with age.

When future historians look back on the first half of the 21^st century, they will judge today’s leaders on how we responded to the challenges, and seized the advantages, of our aging country for the benefit of today’s generations, and for generations to come.

And you all are those leaders.

I don’t believe there is any nonprofit — indeed, any organization in America — that has the opportunity we have to help society respond to the aging of our country.

And while demography may dictate part of our destiny, the rest is up to us.

I hope you have a wonderful few days.

Thank you.