Analysis / Over the Hill and Unemployable

In the Israeli labor market, workers over the age of 45 are considered defective goods. A cultural shift from all the major players – government, employers, unions and the workers themselves – is desperately needed.

An acquaintance of mine called me up this week to ask for some advice. The man in question, 64, is an automobile importer. He told me that he wants to leave the auto importing business to his son and join the workforce as a salaried business executive. The man has a lot of experience with importing, with new technology in the automotive industry, with marketing and sales, acquisitions, and business logistics. He is well-versed in the ins and outs of the local market and he has international experience to boot. He has motivation in abundance and was in search of a real challenge.

“How would I go about doing this?” he asked.

I was taken aback by the question.

I had no idea that people his age still had career goals. I thought at that age things sort of went like that Paul McCartney song, where he fantasized about tending to his garden at the ripe old age of 64 and wondered whether there would be someone to take care of him.

The first response on the tip of my tongue was, “Tell me, are you feeling alright? People over the age of 45 are already considered dead horses in the labor market. Yet, at your age you dare to dream about a new career?”

I didn't want to disappoint the guy, so I quickly fashioned together this response: “Look, in most places they like promoting people who worked their way up through the company. Or they look outside for real star executives. To be appointed manager as an outsider will be difficult. You can aspire to manager, maybe vice president, but not CEO. Of course, you already know there are industries for which you’re unqualified – no one is going to let you manage a hospital or a bank. Therefore, your best bet is to look for a position in the automotive sector which you’re already familiar with.”

For whatever reason, we didn't talk about his age.  It was the unspoken elephant in the room. He knows how old he is. I know how old he is. Both of us know how employers typically respond when presented with a 64-year-old jobseeker, if they respond at all.

I am used to having these type of career conversations with friends who are around 40, give or take a few years, and are interested in a career change and know how complicated such a transition can be in the Israeli job market.

God himself doesn’t have the right connections

The Israeli labor market is one in which certain industries consider employees over the age of 45 to be defective goods. This is a labor market where early retirement packages are offered or layoffs implemented for people who are younger than the state itself. It's a labor market where if you somehow managed to push your way into a position at corporation currently or formerly government-owned, God himself couldn’t convince you to leave before you reach pension age. And if you implored God to help you find a job in one of these places, he would tell you that it's not something within his jurisdiction and that he doesn't have the right connections.

You have to get used to the fact that at a certain age, your career starts to fade. The official retirement ages of 67 for men and 62 for women are now recognized as the end of our working lives. However, the Israeli labor market doesn't offer everyone the privilege of retiring at the official retirement age. Employees find themselves cast out from many workplaces at much younger ages.  They find themselves caught in a very problematic labor market and blocked from well-compensated and desirable jobs. If there are any job openings waiting to be filled, they are usually in fields that aren't well-compensated and completely unrelated to these workers' professional experience and qualifications.

From the perspective of the employer, sometimes there's no escaping worker layoffs, regardless of employee ages. Yet on a national, macroeconomic scale, there is an urgent need to build a more equitable labor market. This need grows as life expectancy increases. On the one hand this increased longevity adds many more healthy years to our lives, but on the other hand it prolongs the need for basic necessities, employment, and income for many more years.

So how do we solve the problem? How do we create a solution for the three decades between ages 50 and 80 that most people can now expect to live? How do we provide people with an honorable livelihood and a mentally stimulating job?  How do we reconcile an individual's dwindling ability to support him or herself at later ages with rising life expectancy with the need to earn a living and continue to contribute to society?

Still not convinced?  Visit Scandinavia.

First and foremost, the key to dealing with this problem is a healthy and growing economy, without which there is no point in having this discussion. But that alone is not enough. A revolution is needed in the Israeli labor market to address the employment and wage-earning needs of Israel's older workers.

We are given to writing in TheMarker about the distortions in the Israeli labor market, pointing out the diseases that afflict organized labor. Some people interpret this to mean that we find organized labor somehow invalid or illegitimate, which really isn't the case.

On the contrary, organized labor permits worker committees and unions to achieve a lot on behalf of their workers, and in a world that is increasingly chaotic, that support is needed more than ever. On a fundamental level, organized labor is also good for employers. However, the Israeli model of organized labor is a corrupting influence on large swathes of the economy. At many workplaces in Israel, organized labor is contaminated with belligerent behavior, nepotism, inefficiency and just plain old mediocrity.

The appropriate model for organized labor needs to be based on the efforts of unions and employers to provide fair wages and favorable working conditions for all workers (not just union members). The way to achieve this change is through managerial flexibility which enables the employer to deal with problems in his company's cost structure as they appear. The solution doesn't lie with forcing an employer to stick with his permanent employees in perpetuity. It is clear that managerial flexibility is sometimes worth a greater level of job insecurity.

It is the government’s responsibility to address the increased job instability that will come with the end of the institution of job tenure. The government has a role to play in creating opportunities for laid-off workers to return to the labor force through professional training programs, businesses incentives and providing a social safety net for those who are not successfully reabsorbed into the job market.

Professional training isn't just a mandatory topic of discussion during bouts of unemployment. A quick retraining course at age 50 or over won't necessarily ensure a speedy return to full-employment, but it is also necessary for currently employed workers. The goal is to create a culture that maintains highly-skilled workers over the course of their entire careers.

The aim of workers is to remain essential to their employers and not rely solely on the protection provided by job tenure with a union. The needed change is cultural, and it is needed among all the major players: the government, employers, the unions and workers.  Whoever demands social justice can't help but jump at the idea.  And if they don't take to the idea, then they should take a trip to Scandinavia to see how well it works over there.