It’s happening again. One of the perverse features of the Great Recession ten years ago was the expulsion 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, leaving their careers scarred and lacking a dignified close. The current Covid-induced recession is once again presenting similar employment difficulties for mature workers. Since March, the labor market has said goodbye to many older men and women, with high and low qualification levels. In other words, this firing of the elderly is widespread.
Unfortunately, this turns out to be not just a temporary furlough for these workers, but a long-term separation marked by an acceleration of dire trends. Once again, just like during the last recession, new trending job changes are undermining job security for older workers. Previous examples included labor-saving technologies and increased workloads for younger, less expensive staff, which combined to decrease management’s need to restore previous staffing levels. Once again, mature employees find their bargaining power diminished by firing and rehiring. Weak or non-existent unions, the rise of the informal economy, and the continued lenient enforcement of age discrimination laws, not to mention the damaging economic disruption of Covid, make older workers feel increasingly insecure and inadequate. .
The New School Retirement Equity Lab studies the factors that affect the quality of retirement, which requires an examination of when retirement from work is chosen or forced. His assessment of the plight of older workers is sobering. Even for those older workers who have not yet been laid off, there is considerable uncertainty about their future. This cohort increasingly knows that they are less employable than younger workers. Those over 55 often find that if they were to quit their current jobs, the chances of transitioning to a comparable or better one are dubious. For many, it becomes prudent to stay in a less than satisfying job and then risk becoming unemployed.
Relatively strong earnings have traditionally been an expectation for long-term commitment to a profession and/or employer. Seems fair, right? However, these days, when an older worker is rehired after a job loss, hourly wages are often lower than with the previous job. Workers ages 50 to 61 receive 20% less pay with their new job, while workers ages 62 and older see a 27% decrease. Furthermore, once a worker reaches their fifties, spells of unemployment after a layoff are longer than for workers under 50.
The increased uncertainty and low confidence faced by older workers add to the weakness of their bargaining power. Employers know in most cases that they have an advantage over older workers, except in those situations where the worker has a unique or hard-to-find skill. This is unfortunate. A lifetime of work deserves value and respect. Retirement in the modern age should be a reward for the effort, dedication, and achievement of decades of work, not isolation or banishment imposed due to the vicissitudes of the job economy.
As the Retirement Equity Lab points out, lawmakers may need to step in with schemes designed to lessen the hardships of older workers laid off prematurely. For example, employers could offer rainy day or emergency savings plans through payroll deduction, which will be available when needed to increase unemployment benefits, or the federal government could step in with a savings account option. guaranteed retirement pension to supplement what retirees receive from Social Security. Of course, stricter enforcement of the Age Discrimination in Employment Act of 1967 would help a great deal.
Racing is a vocation and a calling to develop mastery and contribute to society. For others, the job is simply a means of getting a paycheck. Either way, getting older should not be seen as a liability or a deficiency to be taken advantage of.