Gerontocracy is everywhere

It's not just our political leaders, all of elite society is getting older

Today’s post is from our editorial assistant Ben Krauss. This is Ben’s final post before heading off on an exciting new adventure in Taiwan. Don’t worry, though, he’ll still be keeping things running smoothly in the comments section as our community engagement manager.

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You’ve probably heard it said of American politics: we're stuck in a gerontocracy.

And it’s true. Our political system, especially at the federal level, is largely run by the elderly. The current president is 78. His predecessor, famously, left office at 82. Congress is older than ever, with a quarter of its members over 70. The age of the federal judiciary is a record 69 years old. Senior moments from Joe Biden, Mitch McConnell, and the late Dianne Feinstein have lodged in the public consciousness and rattled civic trust.

The discourse here is well-worn, but it frequently misses a crucial point: Some of the same forces that have created our political gerontocracy — medical advances enabling graceful aging, combined with a generation unwilling to relinquish power — have also allowed the old to tighten their grip on other areas of American life.

The median age in America is rising, but the percentage of older workers has grown at a faster rate. This is most apparent when you look at positions within elite society, such as tenured academics and corporate executives.

In other words, step outside Washington and you’ll find that gerontocracy is everywhere.

How prevalent is the gerontocracy?

Over the past decade, the number of workers over the age of 65 has increased by 33%. That means if you’re eligible to cash a social security check, you’re part of the fastest growing age cohort in the American workforce. Some workers are doing this out of financial necessity, but wealthy workers have also steadily remained in the workforce longer. Look at the pinnacle of the labor market, and you’ll see that society’s elite is graying:

• Business: Starting in 2008, the average age of an S&P 500 CEO has increased from 54 to 59 years old. Nearly 17.8% of Fortune 500 CEOs are over 65. The average age of a board chair in the US is the second oldest in the world.

• Law: In the last ten years, the number of lawyers over the age of 65 has increased by 50%, and that group now comprises over 14% of all active lawyers. That’s twice the percentage of workers over 65 in the rest of the workforce.

• Academia: In 2017, the average college president was reported to be 62, 10 years older than the average in 1990. The number of tenured faculty over 65 doubled between 2000 and 2010.

• Scientific research: Recent data on research investigators at the NIH is scarce, but the average age rose from 39 in 1980 to 51 in 2008. And the average age investigators receive their first grant was 36 in 1990, but had risen to nearly 45 by 2016.

Several years ago, Derek Thompson wrote a piece exploring why our elite workforce is aging. The simplest explanation, applicable across many professions, is that wealthy Americans are living longer, healthier lives. For example, the richest quartile of men has gained 0.2 years of life expectancy annually throughout the 21st century. But Thompson emphasizes that “many positions and institutions are getting older much faster than that.”

One simple explanation that fits across all these fields is that white-collar work just isn’t that physically demanding, which makes it easier for older workers to stick around. But there are also some more specific dynamics at play. For high-status professionals like CEOs, it might be less about physical ability and more about identity. As Derek Thompson puts it, we’re living in an era of “workism,” where the most affluent people have actually cut back on leisure and now report the longest workweeks in the country.

This theory could apply to our aging scientific researchers and academics too, but there’s another compelling explanation worth considering. According to the landmark paper, The Burden of Knowledge, it now takes researchers a much longer time to master the foundational knowledge in their field. For example, Einstein was only 26 when he published the Theory of Relativity, and it’s hard to imagine someone that young making such a seismic contribution to physics today.

There is also a growing body of research that finds a direct link between aging researchers and a slowdown in scientific innovation. Thompson theorizes in his piece that “as academia and funding institutions get older, they develop an implicit ageism against younger researchers, who they assume are too naive to do paradigm-shifting work in established domains.”

And that brings us to the most important question.

How bad is the gerontocracy?

I spoke to labor economists and experts in business management to get some perspective on this question. First, there is strong evidence that older leaders are likely to be less effective decision-makers. Extensive research shows a decline in executive function that begins at age 60. Economists Rosemond Desire and Scott Seavey conducted a survey that looked at CEOs of 17,000 firms between 1992 and 2018. Overall, they found “a strong and consistently negative relationship between CEO age and managerial ability.”¹ Another study by researchers Brandon Cline and Adam Yore found that even after adjusting for the fact that younger CEOs are attracted to faster-growing companies, every additional year in CEO age was associated with a 0.3% decrease in the value of the firm.

This problem isn’t restricted to CEOs. Another study by researchers at Ohio State University analyzed 5.6 million biomedical research publications and concluded that the work of biomedical scientists makes less of an impact in the field as the scientists get older. This is consistent with the finding that we generally become less creatively productive after we leave middle age.

From the paper “Age and Great Innovation.” Our great inventors used to be quite young.

To be clear, this sweeping generalization obviously doesn’t apply to every individual. Warren Buffett is crushing the stock market well into his 90s. Dr. Richard Bond was just awarded the prestigious Shaw Prize at the age of 75 for his research estimating the age and mass of the universe. I’m not asking anyone to quit their job because of their age, nor am I ignoring the fact that ageism is still very real. Gerontocracy might rule at the top, but less senior workers are still regularly pushed out of jobs due to their age. I do think, though, that we need to be cognizant of how an aging elite might handicap our economic and intellectual growth. And how in certain cases, older workers occupying senior positions might deny younger workers the opportunity of career advancement.

Joseph Fuller, a professor of management practice at Harvard Business School, told me he could see this leading to “a lack of upward mobility for younger academics in certain disciplines.” But also cautioned about making any sweeping statements, because, “It's very occupationally specific and industry specific.”

The U.S. economy is enormous, with millions of workers hired and fired each month, so of course it’s important to avoid over generalizing. But the economist Nicola Bianchi looked at 35 years of income survey data from the US and found that the pay gap between workers over 55 and those under 35 increased by 61 percent between 1979 and 2018. His explanation is intuitive: “Older workers have accrued more promotions and have been occupying those slots for longer, which means younger workers cannot reach those levels anymore.”

Sixty-one percent is a striking number. But even if it’s only directionally correct, it suggests a serious shift in how opportunity is distributed, with younger workers increasingly locked out of the best-paying roles.

The future of the gerontocracy

In each of my conversations about the gerontocracy and the labor market, the topic of generative intelligence came up repeatedly. Whether you’re an AI evangelist or a doubter, it’s impossible to deny that AI will have some impact on the workplace. And I think there’s a strong case to be made that it could either entrench or reduce the power of older workers.

Let’s start with the worst-case scenario.

If AI is at least, as Benedict Evans put it, a collection of infinite interns, then it’s coming for the positions typically held by people one to three years out of college first. But the function of a new associate position at Accenture or a computer programmer at Amazon isn’t just to handle entry-level tasks; it’s also to prepare employees to move towards the middle, and eventually to higher management level positions at the company. Take those away, and you’re not just automating grunt work, you’re cutting off the ability for younger workers to gain a foothold in the workforce.

Guy Berger, a labor market economist and senior advisor at the Burning Glass Institute, doesn’t see this future as inevitable, but he did offer a fairly pessimistic theory: “Organizations find themselves saying this is really good at cutting out young people. We can save resources. And have AI agents run by a bunch of people in their late 30s and early 40s. Then, 20 years later, 70-year-olds are still running things, with no new crop coming in behind them.”

To be clear, there is no evidence that the incorporation of generative AI in the workplace is driving this trend. But there’s been some indication that this future could be around the corner. The accounting firm PwC cut 1,500 jobs and reduced on-campus recruiting after making a billion-dollar investment with OpenAI. Kevin Roose reported that one tech company is no longer hiring for positions below midlevel engineer. The labor market research firm Oxford Economics recently released a report stating, “There are signs that entry-level positions are being displaced by artificial intelligence at higher rates.”

David Deming, a labor market economist at Harvard, splashed some cold water on this trend, telling me, “Companies do not have much incentive to give you the true reason why they're making the staffing decisions they're making. It's easier for them to blame it on something that nobody really has any responsibility for, like AI.”

Still, AI will alter the labor market in some fashion. The timeline could be five years or ten years. But when that happens, Deming believes that it “is more likely to be the thing that disrupts the gerontocracy, rather than the thing that makes it worse.” This is because younger workers have historically been much more likely than older workers to incorporate productivity-enhancing technologies into their work.

The story of computer adoption is an imperfect, but useful comparison. One study found that it raised retirement rates for older workers with limited computing skills by one percentage point per year up until 2000. The younger workers, who were more computer fluent, received a disproportionate share of the benefits. Joseph Fuller told me he disagreed with that thesis and pointed out that if ChatGPT actually lives up to its name as a General Purpose Technology, “then that suggests it will not be as much of a barrier to older workers taking advantage of it than the software platforms of the 2000s and 2010s.”

The comparative adoption rates of AI in the 2020s versus personal computers in the 1980s underscore Fuller’s point. AI is entering the workplace much faster than computers once did. And while this acceleration is driven primarily by younger, more educated workers, a Federal Reserve survey finds adoption is “widespread across gender, age, education, industries, and occupations.” If senior level white-collar workers become quickly fluent in using AI to enhance their productivity, it’s possible to imagine them using it to extend their careers even longer. As a result, the upper-echelon of the labor market becomes increasingly calcified.

Addressing the gerontocracy

There is no single fix for gerontocracy, largely because, as Fuller emphasized, aging labor is a sector-specific problem that will require sector-specific solutions.

For example, the gerontocracy narrative doesn't accurately fit the make-up of the employees or executives who steer our world-beating tech companies. Nevertheless, certain sectors remain dominated by older workers, who cling to power because of status, a hefty paycheck, or some combination of the two. This is having a measurable impact on the wages of younger workers and is likely, to an extent, suppressing dynamism in the American economy.

It’s easy to gin up outrage against political gerontocracy. After all, politicians are remote figures, comfortably distant from our daily lives. But confronting gerontocracy in the broader workforce is more personal. An older white-collar worker might be your parent, your mentor, or yourself.

So are there any fixes?

The Age Discrimination in Employment Act rightly protects older workers. But that doesn’t mean we shouldn’t invest in programs that give younger scientists a fair shot at NIH funding, where they’re often overlooked. Other concrete policies to consider include reforming the tenure system to ensure senior academics remain intellectually productive as they continue to receive university support. More boardrooms could start implementing caps on terms. Age limits for politicians seem wrong-headed and anti-democratic, but reforms to make elections more competitive, and less likely to favor entrenched incumbents, are wise.

Addressing the gerontocracy won’t be easy, particularly in private business. But if we’re outraged by Biden’s geriatric presidency or a GOP congresswoman secretly living in a nursing home, we should also acknowledge that similar dysfunctions may quietly plague other crucial parts of society.

1. Managerial ability is defined by the ability to turn resources into profits.