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SBA STUDY SEES ELDERLY AS VALUABLE EMPLOYEE BASE FOR SMALL FIRMS, BUT THREATS LOOM WITH MOVE TO MANDATED BENEFITS

SBA STUDY SEES ELDERLY AS VALUABLE EMPLOYEE BASE FOR SMALL FIRMS,
 BUT THREATS LOOM WITH MOVE TO MANDATED BENEFITS
 WASHINGTON, April 27 /PRNewswire/ -- Older Americans, generally those 65 and over, constitute an especially valuable employee pool for small businesses that seek experience and stability, according to a study researched for the U.S. Small Business Administration (SBA).
 "Older Workers in the Labor Market" is an analysis of various aspects of older persons in the work place, resulting in a profile of older employees and an examination of how employers perceive them. This research provides evidence that businesses, large and small, have found older workers to be more reliable, punctual, loyal and in need of less training than the average worker.
 But the value of these older workers could be substantially diminished if the cost of hiring them increases due to government mandated benefits, the study pointed out.
 "Firms may be adversely affected," say the authors, Thalheimer Research Associates, "if existing legislation and regulations increase the cost of hiring older workers," especially through mandated fringe benefits to part-time employees.
 The net impact, say the researchers, would be that "while some older workers may experience an increase in their total compensation, others may not get hired due to the increased costs to businesses."
 "This study," said SBA Administrator Patricia Saiki, "shows that older Americans are superior employees and are especially important to small companies. They should not be denied the opportunity to compete in the labor market.
 "Government should be working to decrease the costs for employers to do business not increase it. Government mandated benefits may needlessly boost operating costs of small firms without recognizing their more limited resources to pay for such mandates.
 "Small business is the engine that's pulling this nation out of the current economic downturn. Let's not stifle that economic growth at this critical juncture by moving to ill-conceived notions like the 'play or pay' health care proposals."
 Under "play or pay" plans now before Congress, large and small businesses would be required to offer health care to their employees, even if only part-time. If they fail to do so, the government would tax their business income in order to enroll the uninsured employees in a government-provided plan.
 An alternative Saiki advocates is an incremental, market-based reform of the health care system.
 A successful, workable plan, she said, would reject mandates, encourage cost controls, reform medical malpractice provisions, reform insurance underwriting, encourage a move toward greater deductibility of health insurance premiums for small businesses and promote responsibility.
 Other findings contained in the study included the following:
 -- Small firms employ a significant share of workers aged 65 and
 over. In 1988, more than two-thirds of newly-hired workers
 aged 65 or older were hired by firms with fewer than 25
 employees.
 -- Many older workers prefer part-time employment. Small, as
 opposed to large, firms offer more part-time opportunities for
 older workers.
 -- Older workers, particularly the newly-hired, are paid less
 than the average worker. This makes them well suited to small
 businesses that need to hold down costs, while at the same
 time require productive employees.
 -- Workers aged 65 and over are typically not covered by health
 insurance or pension plans. In 1988, 75 percent of the 65 to
 69 year-old workers were receiving Social Security or related
 benefits and 83 percent were covered by some form of private
 health insurance, while 82 percent reported being covered by
 Medicare or other public insurance. ... Thus, while health
 insurance may be a reason for continuing work from 55 to 64,
 it does not seem to be much of a factor after age 65.
 This is vital information for small companies because, compared to their larger counterparts, they tend to offer a shorter career ladder and more modest benefit packages, elements sought by younger job-seekers. Small companies are also seeing a diminished applicant pool due to an aging population.
 "These findings," said Saiki, "show that older individuals -- whether re-entering or remaining in the work force -- can alleviate small business labor shortages."
 The research was conducted by Thalheimer Research Associates Inc. of Lexington, Ky., utilizing the Current Population Surveys and Fringe Benefit Supplements for the years 1979, 1983, and 1988 (combined), as well as data obtained from the 1991 Older Worker Survey of Employers, a nationwide survey conducted by Thalheimer for the SBA.
 -0- 4/27/92
 /CONTACT: D.J. Caulfield of the U.S. Small Business Administration, 202-205-6742/ CO: U.S. Small Business Administration ST: District of Columbia IN: SU:


TW -- DC027 -- 3207 04/27/92 13:09 EDT
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Publication:PR Newswire
Date:Apr 27, 1992
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