The oasis looked like a pleasant place to rest the camels, sleep in the shade, and bathe in a flowing brook. How disheartening to realize that it was just an illusion and that the travelers in the caravan had many more miles to go.

Older workers today are feeling like those travelers. With the evaporation of what we might call the Wealth Mirage, many middle-class Americans are realizing that retirement is a lot further off than they had anticipated.
For one thing, retirement accounts have not exactly delivered paradise. A 2008 report by the Urban Institute, How Is the Economic Turmoil Affecting Older Americans?, found that

“the typical household age 50 and older with a retirement account holds a balance of $89,300, not enough to replace one year’s pre-retirement income.”

For another thing, even before stock prices collapsed, our retirement savings were inadequate, but inflated house prices allowed many of us to pretend otherwise. When a house seemed to be worth three times what one had paid for it, one could dream of living off its equity for retirement. Alas, we realize now, the only price that matters is the one you actually receive when you sell. Americans’ feeling of wealth before the current financial meltdown had no more substance than the castles and palm trees in the oasis.

To be sure, many people are working into retirement by choice, thanks to increased life expectancy. But the financial meltdown is accelerating the trend. Compared to 1998, the August 2008 labor force participation rate of people from 65 to 69 years old had increased by 38% for men and 54% for women. And this number may understate the larger trend, since the economy has been shedding jobs since December, 2007, which is likely to particularly impact older job-seekers.

The caravan’s challenge was to keep the camels fed until they reached a real oasis. Similarly, the older workers’ challenge is to remain employable for an extra five or ten years until their assets are truly adequate. This is even more critical for low-income workers, who must work simply to survive without any safety nets. The potential obstacle older workers face can be thought of as a kind of asset poverty. The asset in question is a marketable skill set; the shortage results ultimately from the market’s accelerating demand for new skill sets, as technologies and industries change ever more rapidly. In this time of contracting job prospects, marketable skills are a necessity to beat the competition.

The task facing policy makers today is to develop practical ways of funding and delivering continual lifelong learning. This will allow workers to acquire new skills that allow them to work in meaningful ways into their later years.

New York was the first state to introduce a package of bills to “establish the infrastructure needed to keep older Americans engaged in the workplace and civic life beyond traditional retirement age.” The legislation ranges from supporting training providers, to creating Centers for Lifelong Learning, to certifying and promoting “older worker friendly businesses.”

As California policy leaders address the issues of older workers (and already, one in five Californians is over 60), solutions will be similarly multifarious. Some will involve new ways of delivering learning that are adult-learner friendly. Others will involve developing attractive and equitable ways to share the cost of lifelong learning between individuals, businesses, and government (e.g. Lifelong Learning Accounts). After all, all three parties will benefit: workers will enjoy more years of productive, rewarding employment, business will gain productivity from having more highly skilled workers, and government will be less burdened to the degree that the economy prospers and jobs are more numerous.

Workable partnerships to fund and deliver lifelong learning are essential to addressing the asset poverty of under-trained older Americans. We will all be better off if America’s seasoned travelers are well-equipped and their reward is not a mirage.

Amy Sherman is Vice President of Policy & Strategic Alliances at CAEL, Council for Adult and Experiential Learning.