By Paul Brandus, MarketWatch
The labor market has never been easy for older Americans, and now there is fresh evidence that the COVID-19 crisis is making it even worse.
A new report by the Retirement Equity Lab , part of the Schwartz Center for Economic Policy Analysis at New York City-based The New School, says that unemployment rates for workers 55 and older has topped those of mid-career workers for the entire length of the pandemic. It’s the first time since 1973 that such a gap has existed for six months or longer.
“This recession is a lot deeper than 2008,” notes labor economist Teresa Ghilarducci, director of the Schwartz Center, and “employers are not preserving the skills and experience that older workers have like they have in past downturns. It looks like they’re being let go first, and employers are shying away from re-hiring them.”
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She points to data showing that since the pandemic began earlier this year, older workers have lost jobs at a faster rate, but have been re-hired at a slower one. The trend has created an unemployment gap of 1.1 percentage points between older workers’ six-month average unemployment rate of 9.7% and mid-career workers’ rate of 8.6%. The trend is more pronounced among older workers who are black, female, or lack a college degree.
Older workers have always been something of a tradeoff for employers. They typically bring more experience and job stability to the table than younger workers, who are more prone to change jobs more often. But older workers generally earn more and are more prone to health issues, something that has become more evident during the pandemic.
“It may have exposed just how expensive older workers are to employers in terms of health care costs,” Ghilarducci says. “It also might be a once-in-a-lifetime chance for employers to shed older workers, because the Trump administration is not enforcing age-discrimination laws.” Administration officials did not respond to requests to comment.
She says during the so-called “Great Recession,” which extended from the latter stage of George W. Bush’s presidency to the early stage of Barack Obama’s, such laws were enforced more vigorously.
All of this is further threatening retirement security for older Americans in or approaching retirement age, many of whom were of modest means—or worse—to begin with. These sobering statistics from the Social Security Administration are worth repeating.
• Social Security benefits are about 33% of all elderly income.
• Among elderly Social Security beneficiaries, 50% of married couples and 70% of unmarried persons receive 50% or more of their income from Social Security.
• Among elderly Social Security beneficiaries, 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income.
Meager as Social Security is—the average monthly check in 2021 will be $1,522, after a 1.3% cost-of-living adjustment was announced last week—at least it’s something that anyone over age 62 who has lost work is eligible for.
More problematic is older Americans who have lost jobs but haven’t reached 62—the minimum Social Security age—yet. Advocates for older Americans like Ghilarducci say Congress should not only increase but extend unemployment benefits and also lower the Medicare eligibility age to 50.
When the pandemic first swept across the country earlier this year, some 22 million jobs were lost during the ensuing economic meltdown. Economists estimate that only about half of those jobs have been restored. But with winter approaching and the pandemic showing new signs of life , a new surge of cases appears to have taken hold in much of the country. There are fears that any economic recovery could be modest.
Ghilarducci offers some challenging advice for older citizens seeking work, starting with the realization that they might have to go into a totally new industry or occupation. Easier said than done.
“They really should be much more flexible about the kind of jobs they would take,” she says, “and change their ideas about what kind of work they can do. Men may want to take jobs that older women are usually concentrated in, like care work, for example. Men in nursing homes are a real premium.”
Her advice for woman is bleaker:
“Older women usually have a harder time going into men’s occupations, so that’s out,” she says bluntly. “Older women may have to lower their expectations about what kind of jobs they can get, and be flexible. But it’s important that they stay in the labor force if they can.”