Employment struggles for older workers

It’s happening again. One of the perverse hallmarks of the Great Recession a decade ago was the exclusion of many older workers from the workforce. A significant number of experienced employees were forced into sudden unemployment or early retirement. Many never fully recovered financially or emotionally, and their careers remained scarred and lacked a worthy conclusion. The current Covid-induced recession is again presenting older workers with similar employment challenges. Since March, the labor market has shed many older men and women with both high and low skill levels. In other words, this dismissal of older people is widespread.

Unfortunately, this is proving to be not just a temporary furlough for these workers, but a longer-term separation characterized by an acceleration of egregious trends. As during the last recession, the new trend of shift rotations is weakening the job security of older workers. Past examples have included labor-saving technologies and increased workloads for younger and lower-cost employees, which combined resulted in management having less need to restore previous staffing levels. Once again, older workers find their bargaining power weakened when faced with firing and rehiring. Weak or non-existent unions, the rise of the gig economy and continued lenient enforcement of age discrimination laws, not to mention the damaging economic disruptions caused by Covid, are leaving older workers feeling increasingly insecure and inadequate.

The New School’s Retirement Equity Lab examines the factors that affect the quality of retirement, which requires research into when retirement from work is elected or enforced. Your assessment of the situation of older workers is sobering. Even for older workers who have not yet been made redundant, there is considerable uncertainty about their future. This cohort is becoming more aware that they are less employable than younger workers. Those over 55 often realize that if they leave their current job, their chances of moving to a comparable or better job are dubious. It is prudent for many to stick with a less fulfilling job and then risk unemployment.

A relatively solid income is traditionally an expectation for long-term commitment to a job and/or employer. Seems fair right? However, when an older worker is rehired after losing a job, hourly wages are typically lower today than they were at the previous job. Workers aged 50-61 will see their new job earn 20% less wages, while workers aged 62 and over see a 27% drop. In addition, periods of unemployment after a layoff are longer than for workers under 50 once a worker reaches their 50s.

The increasing insecurity and low confidence of older workers contribute to the weakness of their bargaining power. Employers, in most cases, know they have the upper hand with older workers, except in situations where the worker has a unique or hard-to-find skill. That’s unfortunate. A lifetime of work deserves value and respect. Retirement in modern times should be a reward for the toil, dedication, and achievement of decades of work, not enforced isolation or exile due to the vicissitudes of the employment economy.

As the Retirement Equity Lab points out, policymakers may need to step in with programs aimed at reducing the hardships of laid-off older workers. For example, employers could offer rainy day or emergency savings plans through payroll deductions that become available when needed to top up unemployment benefits, or the federal government could step in with a guaranteed retirement account savings option to supplement what retirees receive from Social Security. Of course, stricter enforcement of the Age Discrimination Act 1967 would help enormously.

Careers are a calling and a calling to develop mastery and contribute to society. For others, work is just a means of earning a paycheck. In any case, aging should not be viewed as a burden or deficiency to be exploited.