Another 2.1 million Americans filed for jobless benefits last week, bringing the total to more than 40 million in the past 10 weeks.
The economic crisis is causing financial hardship now for many of these men and women, and it’s also adding another layer of uncertainty to the financial health and future of older adults.
How this crisis is affecting older workers was addressed in a webinar organized by the Schwartz Center for Economic Policy Analysis (SCEPA) and the Economic Policy Institute (EPI). Here’s a little of what we heard when we tuned in to Older Workers & COVID-19: The Harsh Economic Realities.
Finding a New Job Can Be an Issue
Richard W. Johnson is senior fellow with the Income and Benefits Policy Center at the Urban Institute. He notes that due to age, older workers have been considered higher-risk during the pandemic and might not be able to go to work, particularly if employed in front line jobs.
“For older workers, the big industries in terms of job loss are trade, wholesale and retail, leisure and hospitality, education, professional and related-service needs, and health care,” says Johnson.
Returning to work can be an issue. “Older displaced workers are less likely to become re-employed than younger workers. When they do become re-employed, they tend to suffer larger wage loss.”
He says this adds to the worry about being retirement-ready, “So many people accumulate most of their retirement savings in the years immediately before retirement, after they’re done raising their families, paying college tuition, and making mortgage payments. These job losses matter and the financial implications will reverberate into retirement.”
Beware of Age Discrimination
Monique Morrissey, an economist with the Economic Policy Institute (EPI), says it is not good policy to force older workers back into the workforce.
“Forcing workers to take unnecessary risks is, not only cruel, but counterproductive. There’s no trade off between the long-term health of workers and the long-term health of the economy. We don’t know how long or disruptive the crisis will be,” Morrissey says.
“Two other factors that are hard to predict are whether there will be significant long-term health problems associated with the virus and whether employers will illegally discriminate against older workers in rehiring.”
Morrissey notes that there are other job options for those that don’t want to return to a workplace.
“One of them is hiring contact tracers who are the people who will poll from home. So it’s a safe job for older workers and others who ask infectious people who they’ve been in contact with. You can then contact the people they’ve been in contact with.”
He adds, “a lot of these jobs needlessly require that people have bachelor’s degrees and other things that will tend to discriminate against older workers. And I just want to say that if we emphasize work experience over formal education, we might get a lot of older workers in safe jobs through that.”
Income Insecurity Greater for African Americans
The African American worker faces retirement challenges, according to Kilolo Kijakazi, Institute Fellow at the Urban Institute.
“African American workers typically face higher rates of unemployment than white workers at every level of education. African American workers are paid less than white workers at every level of education. In addition, African American workers are paid less than white workers in every occupation,” she says.
“As a result of higher rates of unemployment, lower rates of pay, less access to retirement benefits, and increased likelihood of exposure to the coronavirus and the subsequent loss of income for their families workers of color and their families are at greater risk of economic insecurity,” Kijakazi adds.
Retirement Insecurity is Not New
“Even in normal times, millions of older workers face a choice between earning insufficient wages under bad working conditions or retiring without adequate income. Since half of workers fall into retirement involuntarily, retiring without adequate savings is not their choice,” according to SCEPA.
Ghilarducci says, “Of 29 million middle-class older workers—between the ages of 50 and 60—12 million will be downwardly mobile in retirement. Of those, 1.1 million will fall into that classification because of the current health crisis.”
“So we’re seeing an economic, social, and perhaps political phenomenon unfolding here where the middle-class worker will become a poor retiree,” she adds.
The panel offered a variety of possible solutions to the difficult reality older workers face as they get closer to retirement. Among the ideas: increase in social security benefits, a universal pension plan for all workers, implement lowering the eligibility age for Medicare to 50, and eradication of racial and gender discrimination when hiring opens again.
All agreed that an extension of unemployment benefits—particularly for older workers—is essential. They pointed to Texas as a model.
Johnson says, “The state of Texas has already done this by allowing old age—if you’re 65 or older—being a reason for not having to go back to work. Yet still being able to collect unemployment insurance benefits.”
You can watch the webinar here: Older Workers & COVID-19: The Harsh Economic Realities.