The pros and cons of an ageing population and what the Boomer bottleneck means
Here’s an experiment: next time you enter the workplace, I want you to scan your eyes carefully around the room. Is there anything unusual that you haven’t paid much attention to before? Because there is one thing that will be obvious when I point it out.
Australian workplaces, like the rest of our society, are aging. Take a good look at most workplaces and you’ll see that more older workers continue to work beyond the traditional retirement age than at any other time in history.
As with most long-term trends, this has happened so gradually over the last few decades that we barely noticed the change. People are working longer than ever before and this is starting to cause problems. One of these is called the “Boomer bottleneck” and it is something we need to talk about.
Over the past 20 years, the percentage of older Australians over 65 who continue to work has more than doubled, from 6.1 per cent in 2001 to 15 per cent, according to data from the Australian Bureau of Statistics.
When you break it down by gender, this equates to 11 per cent of older women and 19 per cent of older men working above the age we generally associate with retirement, or about 620,000 Australians.
There are almost as many reasons behind this as there are different circumstances. Some proudly choose to stay at work as long as they can because they enjoy the work, the community, the income, and the meaning it brings to their lives.
Importantly, this isn’t about pushing people away from the workplace or forcing them to retire in a hurry to sort things out.
Others cannot afford the reality of unemployment or retirement and need to continue working to help pay their bills. Some even face changing access to pensions and age pensions and are counting down their last working days.
Whatever the reasons, this effect is a “bottleneck” in many workplaces that leads to undesirable consequences. Younger workers are frustrated that they have to wait longer for more junior positions because the flow of roles cannot open up as quickly as in the past.
One of the most obvious effects of this was described in a research paper in which economists Nicola Bianchi and Matteo Paradisi analyzed the age wage gap in 2024 in several high-income countries, including Australia.
They found a growing wage gap between older and younger workers and found that an increased supply of older workers who stay in the workforce longer restricts younger workers’ access to higher-paying roles. This simply widened the pay gap in favor of more senior employees.
Of course, there are many benefits to people staying in the workforce longer, including the shared and unique knowledge that comes from multigenerational workplaces and not losing decades of experience when they walk out the door. Having older people in the workplace can be a real joy, but we need to figure out how to make it work for everyone.
Unfortunately, solutions are complex because they need to be considered from every angle. We need to understand all the reasons why many Australians cannot retire even if they want to, provide pathways for those who want to continue working to contribute meaningfully, and open new pathways for others.
Importantly, this isn’t about pushing people away from the workplace or forcing them to retire in a hurry to sort things out. For many people in their late 60s and 70s, work is a fundamental part of their identity and daily routine, and we should welcome their experienced contributions to our workplaces.
But if we’re going to have a discussion about this growing problem, we need to be able to hold on to two truths at once: younger workers need room to move up, and we can’t just push older workers out of the way to get there.
A recently published synthesis of retirement studies Social Sciences and Medicine He found that a person’s retirement has a significant impact on their health. Voluntary retirement at a time of their own choosing was associated with better or stable mental health, while completely involuntary or forced retirement was associated with worse well-being.
The complications of an aging population are a slowly advancing trend that we have been tracking for decades. It’s not any generation’s fault that we’re in this situation, but the first step in finding solutions that will benefit workers both older and younger is to get the facts out in the open so we can have an honest conversation.
Tim Duggan is the author of: Korc Backward: The Revolutionary Way to Work Smarter and Live Better. He writes a regular newsletter timduggan.substack.com.
Get workplace news, advice and perspectives to help make your business work for you. Sign up for our weekly Thank God Monday newsletter.
Tim Duggan is the author of Working Backward, Cult State, and Killer Thought. He is one of the founders of Junkee Media and writes a monthly newsletter called OUTLET.
