Keywords

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Introduction

Researcher Alan Walker stated that “…retirement is both the leading form of age discrimination and the driving force behind the wider development of ageism in modern societies…retirement maybe seen as an age discriminatory social process designed to exclude older people en masse from the workforce”(Walker 1990, p. 59). A number of scholars echo his sentiments (Bytheway 1995; Friedman 2003; Longino 2005; Palmore 2005; Townsend 2006), while others see retirement as ‘justified’ ageism or at least question whether retirement is a form of ageism that gave birth to general ageist ideas in developed countries (Grattan 2002; Macnicol 2006, 2010). In this chapter it is argued that retirement is an institutional form of ageism – both negative and positive – depending on the era in question, beginning with the inception of retirement in the twentieth century through to retirement today. The approach taken uses the political economy framework that retirement is driven by changes in the economy and supported by the enlightened self-interest of various political and economic groups (McDonald and Wanner 1990). The chapter will draw on the North American experience, specifically Canada, to illustrate the role of the economy in determining the changing meaning of retirement as it responds to the requirements of the market, supported by stereotypes of older adults that are attached to the various market changes over time. Unlike other accounts of retirement and ageism, this account accepts that the evolution of capitalist economies has both incorporated and marginalized older workers over time via pension and retirement polices (Binstock 2010), but does not accept economic orthodoxy “that the invisible hand of the market transmutes individual acts of selfishness into socially desirable collective outcomes” (Cassidy 2009, p. 8). The history of retirement, considered here as the handmaiden of the ever-changing economy (Halliwell 2009; Phillipson and Smith 2005; Walker 2006), is littered with examples of undesirable outcomes for older adults based on systematic ageism.

Setting the Parameters

Retirement, as a social institution, emerged in modern industrialized societies at the beginning of the twentieth century. Scholarship into retirement paralleled its development and began in earnest in the late 1940s and early 1950s. However, because of the rapid evolution of retirement (McDonald 2011), there is some uncertainty about the relevance of research conducted in earlier times to retirement today (McDonald and Wanner 1990). Just as social scientists think they have explained the transition from work to retirement and its causes and consequences, the concept shifts according to different economic conditions, policies and individual preferences that require revised explanations. For example, while retirement may have been initially developed as a reward for loyal older workers to encourage life-long attachment to employers, in a recession, early retirement may be used as a mechanism to discard older workers from the labour force as quickly as possible. These variations on retirement reflect the idea that retirement as an institution was designed to move the older worker out of the labour force in a systematic manner without causing undue financial upset, while solving the societal problem of what to do with an aging labour force (Chappell et al. 2008). In other words, to a certain extent, the nature of retirement depends on the size, composition and requirements of the labour market at any given time (McDonald and Wanner 1990).

In light of this typical definition of retirement, it is difficult to ignore the social construction of retirement as an ageist institution, albeit a useful one to some sectors of society. The progenitor of this definition, Robert Atchley (1980, p. 264), reinterprets his own institutional view of retirement 13 years later in a more critical light to show how removing workers from the labour force serves the interest of capitalists and is of questionable value to society. He argues that retirement, as an institution, ensures that society has no obligation to provide jobs for older workers who may wish or need to be gainfully employed. In addition, he claims that the institution of retirement reinforces the view that older workers are less productive then younger workers (Atchley 1993). His more recent views represent those of most anti-ageists (Macnicol 2006).

Ageism here refers to institutional ageism, the “missions, rules and practices that discriminate against individuals and/or groups because of their older age” (International Longevity Center 2006, p. 21). It also includes both positive and negative ageism as first developed by Palmore (1990) and later Cole (1992) who labeled both forms the polarization of ageism. Notably, Erdman B. Palmore defines ageism as “any prejudice or discrimination against or in favor of an age group” (1990, p. 4). In a study of polarized ageism, representations of older adults in a national newspaper in Canada (Rozanova et al. 2006) were those of ‘successful’ aging often seen as a positive view – “a lifelong process optimizing opportunities for improving and preserving … independence; quality of life; and enhancing successful life-course transitions” (Peel et al. 2005, p. 298). Although optimistic, assumptions based on positive ageism may lead to responses that are just as biased as negative ageism and can do as much harm (Binstock 2010; Townsend 2006). Thus, those who don’t ‘age successfully’ are likely aging failures, notwithstanding their genetic make-up, accidents and poor health (Rozanova et al. 2006).

At the same time, the ageism that retirement embodies is often implicit, meaning that thoughts, feelings and behaviours toward older adults exist without conscious awareness, with the assumption that the ageism is the basis of most interactions with older individuals (Levy 2001, p. 578). This would include the realm of ‘justified’ ageism where, the attributions of discrimination are minimized by the account-giver to fit with their own images of fairness (Levy 2001; McVittie et al. 2003). Many account-givers offer rationalizations for retirement that have little to do with the facts or the older adults they represent. For example, some scholars suggest that older workers are found in declining labour market sectors and therefore have few alternatives but to retire, an idea that appears normal enough at first glance. The problem, however, is that this observation is age based and is a stereotype that implies all older workers cannot be educated or develop new skills, they are all incapable of moving to other industries and retirement is just another name for unemployment (Finnie and Gray 2011; Pignal et al. 2010; Townsend 1981). Finnie and Gray investigate the sources of income and the labour market choices of long-tenured older workers in the 5 years following layoff in Canada, and find that 66% of those aged 60–64, choose to, or are forced to retire due to poor re-employment prospects (2011, p. 19), actually supporting retirement stereotypes.

Since retirement is addressed at the institutional level, the theories of ‘acquiescent functionalism’ of the early gerontologists expressed in certain micro theories like disengagement, continuity and activity theories are inconvenient as they ignore structural forces that affect retirement (Cumming 1963; Donahue and Tibbitts 1957; Parsons 1942). The same can be said for the human capital arguments that rely on individualistic explanations of retirement based on the acquisition of knowledge and skills (McDonald and Wanner 1990). The concept of ‘acquiescent functionalism’ used by Townsend refers to a body of thought, “that attributed the causes of the problems of old age to the natural consequences of physical decrescence and mental inflexibility, or to individual failures of adjustment to ageing and retirement, instead of the exertions of state economic and social policy partly to serve and partly to moderate market forces” (Townsend 2006, p. 164). Although more a perspective then a theory, political economy suggests that aging is a socially constructed process that is conditioned by one’s location in the social structure and the economic, political and social factors that affect it (Estes et al. 1984; Phillipson 1982).

The policies that demarcate retirement generally include retirement and pension policies. Retirement policy is primarily about the age of eligibility and other requirements that regulate when and how people retire. Pension policy is what makes retirement possible: how the accumulation of pension benefits is designed and financed. “The two policies are strange bedfellows even though a change in one policy noticeably affects the other. In Canada, retirement policy is reformed largely through the back door of pension policy that tends to be sensitive to market pressures, mainly to remedy whatever the country’s current fiscal imperative is” (McDonald and Donahue 2011, p. 409). Both sets of these polices usually contain stereotypes of the aged that provide ‘legitimate’ reasons for the ageist aspects of retirement.

This perspective of retirement is not common, particularly in North America where questioning the functioning of market economies is not the norm. The markets are seen to be non–ageist because they are considered to be more efficient than any other system, they are self-correcting and “scientific” (e.g. general equilibrium theory), suggesting that they are value-free (Cassidy 2009). A close read of many of the justifications for retirement over time are based on the ebb and flow of the market according to the demand for older workers, a process free of systematic ageism because of the ‘natural’ operation of the markets in a capitalist economy.

Age Discrimination in Retirement

In reviewing men and women’s behavior patterns from pre-industrial times until the 1960s, women were invisible in the development of retirement because its evolution into a social institution occurred within the context of the labour market where women were least likely to be found (see McDonald 2002; 2006 for a history of women’s retirement in Canada).

There are as many histories of retirement as there are developed countries with retirement programs and pensions. All the histories have, however, several commonalities. Retirement is a social construction that took root in modern industrialized societies near the beginning of the twentieth century and became a well-established social institution in western societies following World War II (Achenbaum 1978; Atchley 1982; Fischer 1978; Graebner 1980; Haber 1978; Haber and Gratton 1994; Phillipson 1999; Snell 1996). Secondly, retirement has emerged as the last segment of the life course and helps to define ‘old age’ as a distinct chronological phase apart from education at the beginning of the life course and the middle phase, which is devoted to work. Retirement, then, is not only the principle gateway to later life but is the conduit that links the institutional structures of work and non-work.

Two historical models are used to explain how retirement came to be, the “…impoverishment model, evident in the history of welfare…” (Haber and Gratton 1994, p. 88), where the catalyst causing mass retirement of the old was industrialization and the competing model, the “social security model” developed in the United States where the establishment of social security is argued to have led to mass retirement (Haber and Gratton 1994). A version of these two models appears in Macnicol’s (1998, 2008) work in his supply and demand accounts of retirement, and their combination, where he favours the decline in the demand for older workers in advanced industrial economies, and provides evidence for this process in Britain that started in the 1890s. Doubtless, the history of retirement will be context specific depending on the country in question and most likely is more nuanced beyond an amalgamation of both views. Currently, North America has a propensity for favouring individual behavioural explanations and the roles of policies in corporations (Atchley 1976; Binstock 2010; Hardy et al. 1996; Marshall and Marshall 2003; McDonald and Wanner 1990; Quinn et al. 1990), while Europe leans toward the function of public policies in creating and sustaining retirement (European Commission 2007; Kohli and Rein 1991; OECD 1995; Phillipson 2004; Platman and Taylor 2004).

Agrarian Times

Retirement did not exist in most countries prior to industrialization, and most people adapted their work to their changing capacities by working until they were no longer capable. Historian Andrejs Pakans (1989), argues that people stepped down from their work in traditional Europe but the process of withdrawal was informal and could be long or short depending on the person’s health and/or wealth. In agrarian Canada, a farmer could slowly diminish his workload by delegating the more demanding tasks to his sons or sons-in-law and still maintain control of the process because he owned the land that the children wished to inherit. Because the history of retirement is primarily one of men’s retirement, little is known of women although they probably stepped down in tandem with their husbands. If the male worker was a non-property owner in the employ of others, the tendency was to continue work until physically impossible. At the time, the relations of labour were characterized as paternalistic, a more personal type of relationship between employer and employee that preceded the more impersonal relationships of industrial capitalism (Pentland 1981, p. 26). According to historical accounts of the nineteenth century workplace, older workers were re-assigned to jobs that suited their abilities so they could work as long as possible (Macnicol 1998; McDonald 2002; Snell 1996). In short, biological aging provided the impetus for the gradual withdrawal from work for most in a pre-industrialized Canada.

Pensions were unheard of for the majority of older people but did exist for some specific groups in the private sphere. In Canada in the eighteenth-century, the Hudson Bay Company did make some provision for “…the servants in case of sickness and old age” and allowed a pension in “any case that was deserving” (Simpson 1975, p. 182–7). Older soldiers in far-flung outposts like those in the British garrison in Canada were paid pensions, which served to attach them to Canada while the younger soldiers deserted to the United States. Historians Morton and McCallum note that, “Such men would endure the privations and discipline of military life in return for a secure old age” (Morton and McCallum 1988, p. 6).

The Grand Trunk Railway established one of the first industrial pension plans in Canada in 1874.Footnote 1 Pre-occupied with the job of imposing discipline and stability on armies of employees in a far-flung enterprise like a railway, the managers turned to military solutions such as uniforms, hierarchies, strict regulations and pensions with compulsory retirement at age 65 to reinforce the worker’s commitment to the company (Morton and McCallum 1988). Pensions at this time were a gift to insure that ageing male workers did not jeopardize their relations with their employer (e.g. going on strike), in return for a secure old age.Footnote 2 A Royal Commission, struck in 1919 to deal with the worst strikes in Canadians history, was told by BESCO, a Cape Breton corporation, that a pension was a management tool to encourage the loyalty of employees to reduce labour turnover, and make it easier to rid the company of older workers (Morton and McCallum 1988, p. 11). An Imperial Oil employee was more blunt, stating that corporate welfare (a pension), “is not philanthropy and it is not benevolence: it is a cold-blooded business proposition” (Morton and McCallum 1988, p. 11).

Although the railway executives stressed their concern for the welfare of the older worker, their motives were not especially benevolent (Haber 1978, p. 81). At this time the seeds were sown for the relationship between old age and incapacitation, the idea of an age-related retirement and the idea of a reward for the ‘deserving old,’ – all ageist ideas borrowed from the military that operated to serve management in their attempt to control a difficult labour market via corporate policies (National Union 2007).

In the 1880s, Bismarck, also relying on a military metaphor, added fuel to the fire when he called for state pensions for working class men in a rapidly industrializing Germany:

The State must take the matter into its own hands, not as alms giving but as the right that men have to be taken care of when, from no fault of their own, they have become unfit for work. Why should regular soldiers and officers have old age pensions, and not the soldier of labour? (Quoted in Donahue et al. 1960, p. 351).

Canadian response to Bismarck’s proposition was not one that flagged his ageist ideas about inevitably unfit soldiers of labour but about the dangers of social insurance that could wreak havoc in the labour force. Professor Mavor of the University of Toronto, representing the voice of many, saw all pension schemes as a method to subsidize low wages and objected to social insurance on the grounds that malingering would make the system unworkable (Wallace 1950).

Industrialization

With the acceleration of industrialization a number of factors converged that contributed to the growth of retirement that promoted a negative ageist view of older adults. “Scientific management” (Taylor 1947) emphasized the division of the whole production process into small, quickly learned and routinized operations with quantity, quality and time standards for each task. At the time, this trend reduced the need for skilled workers, a significant characteristic of older workers. As a result, the older worker lost considerable prestige because the skills associated with his craft were no longer valued. At the same time, the wear-and-tear theory of aging gained ascendency (Achenbaum 1978), supporting the principles of scientific management. Although a number of business leaders and physicians had noted the uselessness of older people earlier, the renowned Dr. William Osler, (originally from Ontario), stated in 1905 that men above 40 years of age were comparatively useless and secondly, that men above 60 years of age were useless and there would be “…incalculable benefit … in commercial, political and professional life, if as a matter of course, men stopped work at this age” (The Globe 1905, p. 1). For good measure he recommended “peaceful departure by chloroform” 1 year after retirement (The Globe 1905, p. 1). This appeared in his farewell address at John Hopkins University on his way to the Medical School at Oxford.

The wear-and-tear views were further bolstered by the adoption of machine technology and the speed at which it operated. At the time, the unions were agitating for a 9 hour day and higher wages while management wanted a return on their investment in expensive machinery. A suitable compromise between the two was to increase the work rate, to the supposed detriment of ‘useless older workers’ that gave workers shorter hours and management more profit. Alongside the growing belief that older workers were useless was the added observation by economists that the numbers of older people were growing. In 1871, those aged 45–64 represented 11.1% of the total population, but by 1931 they made up 16.8% (Bryden 1974, p. 30). An increasingly common view was that older workers and their lack of productivity were a national menace to overall economic productivity as stated frankly in the Canadian Senate (Parliament of Canada 1926–27).

Because of the all too effective lobbying of social reformers, the majority of older persons came to be associated with poverty as a result of being forced out of the labour force (Snell 1996). Comments at the time, such as that of the Trades and Labour Council of Nova Scotia, bemoaned that workers were assigned “to the ‘scrap pile’ at the first sign of age” (Quoted in Snell 1996, p. 28). Many organized groups, like the Social Service Congress and the Trades and Labour Congress of Canada, demanded old age pensions for poor, older people. The witnesses to the various parliamentary committees set up between 1911 and 1924 provided similar evidence as to the ravages of industrialism and the inability of poor families to provide for their aged members (House of Commons Debates 1921, p. 3860). In 1927 the Old Age Pensions Act (OAP) was reluctantly passed at the urging of J.S. Woodsworth and A.A. Heaps, two Labour members of the House of Commons who had promised support for a minority government of the day. The Act was to supplement, not replace, the income of workers and was set at subsistence levels to encourage thrift (McDonald and Wanner 1990).

The pension restricted to those 70 years of age and over did not encourage the retirement of men or the few working women, given that it was a piece of “social assistance” legislation conceived as a classic form of poor relief for those already forced out of the labour force. The overly stringent administration of the Act and the miserly amounts awarded meant it could never provide income security in old age. The systematic stereotypes of older adults enshrined in the Act was that of a group of, useless, profligate older adults, jettisoned from the labour market and living in abject poverty.

A significant postscript to these stereotypes is found in the invention of mandatory retirement. Management practices from the United States filtered into Canada and were rapidly adopted in the 1920s. In America, the innovation of the Ford Motor Company of rewarding seniority through annual bonuses and the introduction of the wage ladder became particularly attractive during labour strikes in the early 1900s. By creating a complex set of graduations among indistinguishable jobs within the factory, Ford provided semiskilled workers with an artificial hierarchy to climb, one that was tied to seniority rather than skill. With the creation of the internal labour market the seniority schemes necessitated a cut-off point. Older workers became inefficient because they received considerably more money than younger workers for doing the same work and, as a result, an important reason for mandatory retirement was invented (Haber and Gratton 1994, p. 109; McDonald 2011).

Mandatory retirement, which stipulates an age-mandated end to employment, has elicited considerable condemnation as an exceptional example of age discrimination that has been well documented in many quarters (Gillin and Klassen 1995, 2005; Ibbott et al. 2006; Klassen and Gillin 1999; Lowe 1991). The attacks on mandatory retirement are all based on some form of negative bias against older adults. The civil rights side of the debate focuses on the comparison between the social benefits of a right to contract with the social benefits of a right to be free from age discrimination. Others stir up the intergenerational debate that compares the interests of older and younger workers; still others are concerned with evaluating the productivity of older workers compared to the relative efficient mechanism of shedding all older workers from the labour force through mandatory retirement.

It is noteworthy that historically mandatory retirement was not a policy at any level of government in Canada but rather was developed in the negotiated collective agreements and formal personnel procedures of many Canadian businesses and industries (Ibbott et al. 2006). In short, it was developed as a tool to securely attach workers to the firm in times of strife by ‘buying their loyalty’ but also to get rid of them when they were older, usually at age 65, and too expensive to maintain. Business developed retirement through the provision of industrial pensions for reasons other than goodwill and then had to adjust the somewhat flawed policy via the introduction of mandatory retirement to prevent the runaway costs incurred by older workers. On one level, it is ingenious to reward someone simply because they aged 1 year. However, to be caught in an ageist, self-created trap and solve the problem by arbitrarily removing older workers from the labour force based on age, bespeaks compounded ageism at its best.

Haber and Gratton argue that the internal markets and seniority systems truncated by mandatory retirement were not instances of conscious ageism, but rather management solutions to labour problems (Haber and Gratton 1994, pp. 106–107). Mandatory retirement was indeed a management solution as has been argued above but it was also an ageist management solution, possibly unconscious, but harmful to many. During the Great Depression, with a quarter of the workforce unemployed and at least 15% of the nation on relief, many older workers found themselves in difficult circumstances. They faced growing mandatory retirement provisions in firms, a lack of jobs and no private pension coverage (McDonald 2002). A study by the National Commission on Employment in 1937 found that fewer than 8% of Canadian businesses actually had a pension plan, and a survey by Queen’s University in 1938 estimated that 70% of Canadians had no old age income protection whatsoever (Morton and McCallum 1988).

The Consolidation of Retirement in Canada

The negative ageism experienced by retirees took a significant turn in favour of positive ageism – not with the introduction of social security in 1951 – but well into the 1960s when the pension system was consolidated. Unlike other Western nations such as the USA, a universal government pension was not introduced into Canada until the economic expansion following World War II. Not surprisingly, there were a myriad of complex forces that influenced the formulation of the new pension act of 1951 but the reasons were mainly economic. The common threads that run through most explanations of universal retirement included: first and foremost, the wish of Canadians to avoid the economic disasters of the Depression in its period of reconstruction following WWII; the rise of Keynesian economics that provided a blueprint to reach this goal via government responsibility for economic growth and social security and the human agency of labour, social activists and senior citizen groups that fought for pension changes stemming from the flaws of the 1927 pension plan. The Old Age Security Act, financed and administered by the federal government, paid a pension of $40 per month to all Canadians at the age of 70, with no means test involved. The belief at the time was the economic growth following the war would generate enough financial resources to underwrite the costs of the pension (McDonald and Wanner 1990).

‘Compassionate ageism’ (Binstock 2010) did not appear in Canada in 1951 like in the USA after the establishment of Social Security in 1935. Even with the passage of the Social Security Act of 1951, the perceived association among uselessness, poverty and retirement lingered on from the beginnings of industrialization, as did mandatory retirement. The underlying ideology of the Act was still that the pension was a measure against destitution in old age as a result of retirement. If public opinion polls, popular media accounts and ‘expert advice’ are an indication of the times, in the public mind retirement was well entrenched and decidedly ageist. The popular view at the time showed that retirement was considered a chronological guillotine that assured a drop in income, the onset of boredom and a threat to health, if not death (Financial Post 1957, July 6; Labour Gazette 1957; Macleans 1961).

It wasn’t until the Old Age Security Act was restructured through the 1960s into the 1970s and the introduction of the wage-based Canada/Quebec Pension Plan in 1965 that retirement was secured as a significant social institution that was considered a ‘normal’ part of the life course.Footnote 3 These developments happened in a stable economy that could afford social security in the form of universal pensions and health care. The government took over primary responsibility for retirement income, the concept of retirement was separated from the concept of poverty, public pension benefits became ‘deferred wages’ to which people were entitled due to their contributions, and withdrawal from economic activity took place in advance of physical decline.

Within this environment in the mid 1960s benign ageism or the ‘compassionate ageism’ noted by Binstock (1983) flourished. The changes noted above represented an about-face in ideology from an emphasis on the individual responsibility of the older adult for his or her own retirement to an emphasis on the deserving older adult who should be collectively insured against the financial risks associated with a fixed-age retirement. The benign ageism embraced stereotypes of the older person as worthy of government support at age 65, but still frail and dependent, a double-edged sword. On the one hand, older workers benefited from the myriad of programs devoted to them, like provincial pension top-ups and the Spouses Allowance, not to mention the good-will generated in the Canadian public by the positive ageist stereotypes (McDonald 1995). On the other hand, the economic dependency of older adults was substantially increased (Walker 2000), according to what Townsend identified as ‘structured dependency’ the hallmark of the political economy approach. Townsend argues that during the final decades of the 20th century, older people were treated, according to the research, as more dependent than they really were or needed to be and that the emerging institution of retirement (among others) contributed to this dependency (2006, p. 161). As of 1984, the Canadian government provided 51.3% of individuals’ income over age 65 (National Council of Welfare 1984, p. 42) and the number was still close to 50% at the beginning of the twenty-first century. This dependency was as widespread in the USA (Binstock 2010) and the UK (Walker 2000). Part of this dependence includes the belief that the income needs of older retired people are lower than for those in the labour market, an age stereotype that justifies setting public pension rates below or at poverty levels in many countries including Canada (Butricia et al. 2009; Walker 2000). While Canada frequently advertises that the income-in-retirement-problem has been solved, it is somewhat astounding that the poverty level for unattached people over age 65 dropped from a massive 69.1 to a disappointing 57.7% between 1969 and 1982.

Conservatism and a ‘New’ Retirement

Early Retirement and Masked Ageism

It did not take long for a change in the format of retirement, again in accordance with the demands of the labour market and global economic pressures. With the oil crises in 1973 and 1979, and the two recessions in 1982 and 1990 that hit Canada and other developed nations, many employers, both in the private and public sectors began to downsize their work forces. This reduction is frequently implemented through offering early retirement packages or incentives to older workers (among other approaches) (Foot and Gibson 1993; McDonald et al. 2000; Siroonian 1993). In Canada in the late 1980s and early 1990s approximately 39% of men aged 55–64 and 12% of men over age 65 retired because of early retirement provisions. In the United States during the 1980s, 40% of American firms with more than 1,000 employees reduced their work forces through early retirement incentives (Meier 1986).

There are three ageist issues intrinsic to early retirement when it becomes the standard for retirement. First, the growth of early retirement redefined the length of old age by beginning at a lower age. The average retirement age in Canada of age 62 in 2009 occurs well before full pensions are activated at age 65 (McDonald and Donahue 2011). Canadians spend, on average, 21.9 years in retirement compared to the French who are expected to spend 25.8 years and the Americans who spend 19.4 years in retirement, a fairly lengthy time compared to retirement when life expectancy was only 68 years in the 1950s (OECD 2010). The lower age-entry into retirement has served, in turn, to reinforce the devaluation of older people in the labour market. The research on discrimination against workers indicates that when workers are labeled older, they become potential targets for prejudice and discrimination related to ageing (Duncan 2001; McCann and Giles 2002) so that discrimination starts at earlier ages. A recent study in Belgium shows that self-categorization as an “older worker” is related to negative attitudes towards work (stronger desire to retire early, stronger inclination towards intergenerational competition) while the perception that the organization does not use age as a criterion for distinguishing between workers, supports positive attitudes towards work (e.g. higher value placed on work) (Desmette and Gaillard 2008). This ageism in the organization is all the more glaring because the workers are actually younger, healthier and more educated than the older workers were in earlier times when 70 was the accepted age for retirement.

Secondly, targeting older workers as a group for early retirement is certainly systematic ageism, possibly of the positive kind since many want to retire early – 47% of men aged 45–59 years in Canada in 2002 (Schellenberg 2004). It is important to note, however, that such plans are offered primarily to workers who tend to be higher paid, better educated and hold professional and managerial positions (McDonald et al. 2000; Schellenberg 1994), challenging the stereotype that all workers received these packages. Using early retirement to ‘ manage’ older workers out of the labour force helped lay the foundation for the belief that all older workers were well-off since they could afford to retire early and the rates of early retirement were so high older adults had the potential to become a burden on the social security system in the future (OECD 1988; Laczko et al. 1988).

Thirdly, one of the newer forms of early retirement is actually involuntary retirement, which is often masked behind more socially justifiable reasons such as “intended” early retirement plans (Rowe and Nguyen 2003; Schellenberg et al. 2005; Tompa 1999; Wang and Shultz 2010). This implicit form of ageism has been well hidden although there is a growing consensus that some older workers have accepted early retirements under duress by colleagues, unions and society at large to “stand aside and make way for younger people, or because they feared for their longer-term security in their jobs and estimated that the benefits offered now were superior to those that might be available when facing redundancy later” (OECD 1995). Using the General Social Survey in Canada in 2002, Schellenberg and colleagues (2005) found that 30% of early retirees reported they were involuntarily retired. In another study of unexpected early retirement using a national survey of workers not in the labour force, it was found that an early retirement package did not have a significant impact on retirement income. With the advent of early retirement, Canadians seemed to have created a ‘retirement gap’ where those forced to retire earlier than planned were out of “sync” with the social safety net because they were not age eligible (McDonald et al. 2000).

“Job Snatchers” and “Greedy Geezers”

The convergence of a number of factors – weak economies, the aging population and the rise of the political right – have been identified by many authors as the impetus behind the assault on the welfare state in western nations which began in the early 1990s in Canada (Midgley 1997; Teeple 1995; Workman 1996). As the preceding brief history of retirement in Canada has shown, the manipulation of factors that influence the labour force behaviour of older workers via pension and retirement polices has always been considered a legitimate means for managing the size and composition of the labour force and for thinning the ranks of corporations, even though here, the manipulation is viewed as systematic ageism. It seems that in the next evolution of retirement, its management was also a legitimate means for reducing the national deficit, the pressing economic crisis of the 1990s.

There was a growing voice issuing from privileged Canadians that older people should contribute more to reducing the deficit (Globe and Mail 1995). In a study that surveyed Canadians on its attitudes toward government, its priorities and its spending, it was found that better-off Canadians were far more likely than others to think that their senior citizens should do more to contribute to fighting the deficit (Ekos Research Associates 1995). This perspective was fueled by claims from government and business that poverty among older people had all but been eradicated and, since retirees had enough money, Canadians could expect them to sacrifice in the name of the deficit. For example, the Canadian Institute of Actuaries, using the most miserly poverty measure available, decided that “… poverty among the aged has been eliminated ” (Canadian Institute of Actuaries 1995, p. 17). This message was a politer version of the “greedy geezer” argument (Binstock 1994) promulgated in the United States, which made it easier to politically market slashes to Old Age Security, the Guaranteed Income Supplement, or the Canada/Quebec Pension Plan.

The apocalyptic demography arguments (Robertson 1991) also still held sway. There were too many older workers, taking way too many jobs from too many unemployed younger persons (the baby boomers). Older workers were clogging the higher echelons of company hierarchies and they were attenuating the career mobility of those who followed on their heels. These arguments represented a softer version of the “job snatcher” discourse found in France (Guillemard 1983) and the notion that older workers must make way for younger workers. The demographic load (the ratio of pension beneficiaries to workers) is one of the apocalyptic scenarios that strongly pointed to changes in contributions to, and reductions in, the C/QPP and Old Age Security. Add the noticeable “graying” of the Canadian budget (over 20 billion dollars were transferred to older adults in pensions at this time), and it became almost routine to ask if Canadians had the right to impose such a large economic obligation on future generations – the milder version of intergenerational conflict discourse found in the United States. Superimpose on this scenario the 1991 decision of the Supreme Court of Canada upholding mandatory retirement in those provinces with no human rights legislation protecting older workers, and Canada had unashamedly sanctioned age discrimination (Chappell et al. 2008). Once again, pension policy was available for change to bolster the economy and uncomplimentary and revised stereotypes of older people as prosperous and selfish burdens on the system supported the attack on social security. As Robert Binstock argued in the 1990s, the long-standing compassionate stereotypes of older persons were undergoing a substantial reversal (1994, p. 727) and a new depiction of older people as “ruining the nation” was solidified is his latest assessment (Binstock 2010, p. 576).

The reinstated negative stereotypes of older persons and their retirement justified the retrenchment of the welfare state that was subject to an ambitious effort to scale back Old Age Security benefits in the mid-1990s, an effort ultimately abandoned (Battle 1997; Beland and Myles 2008; Little 2008; McDonald 1997; Weaver 2004). The only feasible possibility for change at the time was the Canada Pension Plan (Little 2008), which underwent fairly significant adjustments such as increased contribution rates, de-indexation of the pay-roll tax exemption level, the reduction of disability benefits, and the creation of an investment board for a hybrid pay-as-you-go scheme (Beland and Myles 2005; Hicks et al. 2005).

The Latest Version of Retirement

Canada’s aging work force hasn’t saved enough to retire. Pension benefits are being slashed, employees are working longer, the elderly are selling their homes and going back to work. (Globe and Mail 2009)

The observation from the Globe and Mail in 2009 following a world economic downturn is the latest retirement crisis identified by the economic sector, the public, and the media. The 2008 meltdown of financial markets resulted in the recent loss of over $200 billion of household wealth in Canada (Abbott et al. 2009). The trickle of companies retreating from their pension obligations accelerated with the global recession and led some companies into bankruptcies (e.g., Nortel, January 2009). In the process, the recession exposed the underfunding of many pension plans (e.g., Air Canada), with estimates suggesting a $50 billion deficit in corporate pension funds (Globe and Mail 2009). Although the absolute number of members in employment pension plans continued to grow from the addition of women (Moussaly 2010; The Daily 2010), in relation to the size of the employed workforce, membership has been declining since the late 1970s and has fallen from 46.1% of paid workers in 1977 to 38.3% in 2007 (Baldwin 2009; Mintz 2009; The Daily 2010). However, private pension plans grew from 23% in 1992 to 32% in 2006 as a proportion of the average retirement income of Canadians 65 and older (Gougeon 2009), underscoring their growing contribution to retirement income.

Although the trend to later retirement had started prior to the economic downturn, the recession added some urgency to ensuring the new retirement was a later retirement, aided and abetted by the negative stereotypes noted above. The financial industry did add a few more stereotypes to their armamentarium in trying to stabilize the economy, the first being that it was the fault of the older person that they had not saved for their retirement (mainly because of financial illiteracy), the second, that the older person must assume more individual risk for their own retirement income because they were profligate, and last, the unchecked and selfish stampede to early retirement (methodically used in labour relations) had to be reversed.

In the first instance, it is somewhat surprising to lay many of the problems of the “Great Recession” (Rix 2011) at the feet of older adults who experienced widespread financial losses in their life savings, investments and private pension plans that were totally destroyed through no fault of their own (Abbott et al. 2009). For certain, those nearer retirement are more likely than the already retired to be negatively affected because they are still in a labour market distinguished by a “jobless recovery”, and they have little time for an economic resurgence in order to regain lost ground in their private pensions and investments (OECD 2009; Sass et al. 2010). The “blame the victim” message that chastises Canadians for not saving enough for retirement, despite the global financial downturn (Baldwin 2009; The Federal Task Force on Financial Literacy 2010) is ageist to the core because the message 130 years later is older people are not incapacitated, they are simply incompetent. The stereotype of incompetence is buttressed by the image depicted in the 2009 Federal Task Force on Financial Literacy (2010) that proclaimed, “many Canadians lack some or all of the skills, knowledge and confidence necessary to be financially literate” (2010, p. 4). This stereotype of the incompetent, illiterate older worker will lead potential retirees to the financial industry for paid advice. Financial institutions spend more than US$1.5 billion a year marketing their services to consumers in the United States and in Canada, through shared media. That amounts to nearly US$40 million a week of advertising dollars trying to catch the consumer’s attention. Under these circumstances, confusion about retirement planning would not be uncommon, nor would the potential for “bad” retirement plans be small in a self-serving industry.

In the second instance, the form of private pension coverage began to shift from defined-benefit to defined-contribution plans, a transition witnessed in a number of countries (Baldwin and FitzGerald 2010). Although membership in defined-benefit plans still accounts for a majority of plan members, the trend to a declining portion of members in a defined-benefit plan is occurring in both the public and private sectors (Baldwin 2009). With the prevailing situation in Canada having begun in 2008, the financial circumstances of current and future retirees will become riskier, depending on the type of plan and investment as with defined-contribution plans (Beck 1992; Giddens 1990). It could be added that with the increase in defined-contribution plans, the responsibility for investment is now passed on to the individual and to his or her financial analyst or banker, if they can afford such a planner. There also is a serious conflict of interest in using financial planners because the financial industry may not be ready to provide the kind of information that people need, as opposed to the kind that sells products at high prices (Ambachtsheer 2008). With the universal pension long gone and the increasing attempt to replace social insurance with individualized market solutions, it seems that Canada is on the way back to earlier times, only with different negative images of older adults.

Third, as we have noted here, the situation is now changing in favour of later retirement. The changes in retirement policy per se have been few. For example, all provincial governments have recently eliminated contractual mandatory retirement at age 65 with the exception of federal employees, but even here the government plans to prohibit this practice. Pension plan changes are more in evidence. For example, recent changes have been made that support part-time work for some workers, since they are allowed to continue to accrue pension benefits if they work later; the age for contributing to RRSPs was raised to age 71 from age 69, and a tax credit was made available to encourage paid work for low-income earners aged 65 and older by reducing the disincentives to paid employment found in the Old Age Security/ Guaranteed Income Supplement programs.

In keeping with the plan to increase the age of retirement, several modifications to the Canada Pension Plan Act, recommended by the federal, provincial, and territorial governments, became law and will apply to those retiring in 2012. Those between the ages of 60 and 65 who plan to apply for a C/QPP pension early will have their benefits reduced. Workers age 65 and older can voluntarily elect to continue C/QPP participation, in which case regular employer contributions will also be required. In other words, early retirement will be penalized and later retirement rewarded. Most recently, an increase in the age of eligibility for the Old Age Security Pension to age 67 was announced by the Prime Minister while visiting another country, an announcement that surprised most Canadians since there had been no discussions of the matter. This back-door method to increase the age of retirement through pension policy has been suggested many times in the past to reduce the cost of pensions but has never really been successful (Brown 1995; Hicks 2003; Lam et al. 1997). The justifications are many: (a) gains in life expectancy requires resetting the retirement age (Denton and Spencer 1996, 2010; Hering and Klassen 2010); (b) a reduction in morbidity and mortality rules out a sickly labour force (Fries 1989); (c) retirement goes on too long (Hicks 2003); (d) generational equity demands later retirement, and (e) a later retirement age would be much less expensive (Hering and Klassen 2010). France, the United States, Germany, the United Kingdom, and Australia have already passed legislation that will, over time, raise the age of retirement. But the Canadian public has not had this discussion (Myles 2006) even though pension policy will shortly begin to encourage a later age of retirement. In Canada this is an example of social policy change by stealth where older people have not been consulted but rather have been pawns in the transformation of employment relations, supported by government interested in cost savings (McDonald and Donahue 2011).

Conclusions

The brief history of retirement has been provided to illustrate how retirement has been systematically ageist since it inception. Retirement has been used as a management tool by business and industry to manage the labour force of older adults over time, depending on whether it is financially fortuitous to business to remove or attach workers to their employment. Shifting ideologies about older adults that extend from negative to positive ageism have been used by business, government, the public and the media to support whatever justification is required at the time of retirement, with little thought about the harm perpetrated on older adults. The justifications span a wide array of images of older people from being dependent, vulnerable and frail through to job snatchers and greedy geezers that society has subscribed to en masse, including older adults themselves.

The argument that systematic ageism exemplified in retirement is a legitimate process as the result of the ‘natural’ functioning of competitive labour markets – deregulated “free markets” – is the greatest ageist idea of all. Free market economics is not self-regulating and is subject to government intervention as seen recently with the economic meltdown of 2008. Retirement is not a natural outcome of the functioning of the economy but is a handy social construction developed by business and industry. Neither is economics totally “scientific”, no matter how strongly embraced by economists. The ‘scientific’ idea was only introduced in the last 40 years and it is easy to find many economic models that fail miserably at prediction and explanation (Cassidy 2009). Lastly, utopian economics and its offshoots are most decidedly not value free. The fuel behind free markets is human selfishness according to Adam Smith himself, wherein economic order will emerge as the unintended consequence of the actions of many people, each seeking their own self- interest (Cassidy 2009). The intervention of government in the economy found in any number of current political, economic and social media discourses is seen as simply unwise, if not morally wrong – a political philosophy laden with values (Cassidy 2009; The Economist 2010). An unstated value in the free market today is that older people are not esteemed or respected and as a result can be maneuvered at will to serve the forces of the market through retirement and pension polices.

How the next evolution of retirement will unfold is open to debate. What is significant is that older workers could possibly have more control in defining their own conditions in the economy simply on the basis of their large numbers, the fact that they will have to work to older ages and they no longer face mandatory retirement.