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Monday, 04 February 2013

Older Workers and the Recession

It is conventional wisdom on the right side of the political spectrum that older workers are not affected much by this endless recession we've been living through for nearly five years.

They cite the lower unemployment rate for people nearing retirement age and imply that this is somehow unfair to young workers; that old folks should pack it in so younger ones can have their jobs.

There is much more to the issue than the unemployment figures and although I've written about this a couple of times, it's hard for a blogger, an old one at that, to make an impact. So it is a good thing when a big-time newspaper takes notice.

Reporter Catherine Rampell writing in The New York Times:

“...once out of a job, older workers have a much harder time finding another one. Over the last year, the average duration of unemployment for older people was 53 weeks, compared with 19 weeks for teenagers, according to the Labor Department’s jobs report released on Friday...

“When older workers do find re-employment, the compensation is usually not up to the level of their previous jobs, according to data from the Heldrich Center for Workforce Development at Rutgers University.

“In a survey by the center of older workers who were laid off during the recession, just one in six had found another job, and half of that group had accepted pay cuts. Fourteen percent of the re-employed said the pay in their new job was less than half what they earned in their previous job.”

Let me repeat that: “[Of] older workers who were laid off during the recession, just one in six had found another job.”

Some older workers have been out of work for five years caught between a rock and a hard place: no one will hire them and they are not yet old enough for Social Security or Medicare.

Or, to have enough money to live and eat, they signed up for early Social Security sentencing themselves for the rest of their lives to only two-thirds of the benefit they would have received had they been allowed to work until full retirement age.

Taking Social Security at age 62 means not only drastically reduced income but no affordable health coverage for three more years. Reporter Rampell again:

”New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives.

A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.”

What isn't addressed in the Times story is how many elders who lost their jobs also lost their homes to foreclosure or are stuck with underwater mortgages. And even those already retired who had diligently saved all their working lives to have something more than Social Security in old age had their savings wiped out in the crash and have been stuck with near zero interest rates on whatever they have left.

Let us have no more conversation pitting generations against one another in the poverty sweepstakes. Everyone is hurting. Well, except for the people who caused it all.


At The Elder Storytelling Place today, Richard J. Klade: A True Role Model


Posted by Ronni Bennett at 05:30 AM | Permalink | Email this post

Comments

That was one heck of a good investigative article from Catherine Rampell. We all know (or are ourselves) aging people who've been hammered by this economy. If we believe Paul Krugman (I do) we also know the present stagnation is a crime because there's a clear path to fixing it that is blocked by politicians of both parties who insist on "austerity."

Ronni:
A lot of people believe that the United States has no class system.
They're wrong.
We have only two classes: investors and workers.
Old workers are considered poor investments, based on required compensation.
As always, the bottom line is what counts.

Does anyone remember early in the last administration a comment was made by the "Decider-In-Chief" about the accumulated wealth the baby boomers had amassed?

The comment went something like this: "If all the baby boomers retire at the same time - the stock market will crash!"

And sure enough, the market crashed, but with all the wealth we had saved.

Then the SS Trust Fund vanished.

Can anyone say that those past 10 years have done anything to help those who have lost fortunes?

BTW: Read Krugman today regarding how the Repubs want to dismantle the Consumer Protection Agency: http://www.nytimes.com/2013/02/04/opinion/krugman-friends-of-fraud.html?ref=opinion&_r=1&

Your last paragraph says it all, Ronni. No matter what age we are we still need to have the basic necessities of life.

There's another factor involved in not hiring older workers. The employers have bought into the stereotype that older people are slower to learn new skills and the cost of training them is not cost effective.

Insurance companies really sock it to older people seeking an individual health policy when they lose a decent job. And all the talk of 'retirement accounts bouncing back' now that the stock market has hit 1400 again - certainly isn't true for everyone.

My one glimmer of hope? That Mary Jo White will do whatever she can to make the SEC keep Wall Street in line.

I personally know quite a few people in their early 60s who work ONLY for medical coverage. When they qualify for medicare, then they quit their jobs. I have the "pre-existing insurance" set up via the feds. It will end next year, and I dread thinking what premiums will cost from a private insurance company.

Lost my professional-career well-paying job 33 weeks ago; today I have an interview for a job that pays $10.50 per hour plus benefits. I hope I get it, as my COBRA premiums alone account for more than half of my permanently-reduced Social Security benefits. Probably won't. This will be only the second interview I've been invited to for the nearly 100 jobs I've applied for, including retail holiday temp positions.

A side note: AARP regularly gives plaudits to employers deemed friendly to older workers, but I suspect these firms are only keeping on people who came to work at much younger ages. I'd like to see a survey of agencies and businesses that actually hire people over 60. I doubt there are many.

You're preaching to the choir here. I was laid off at age 55 and never found another job. The highest-earning 10 years of my pension growth -- gone. In my job hunt, I never got past the (very few) initial interviews, which inevitably were with men in their 30s. When my COBRA benefits ended before I could get Medicare, I had to buy into the state's "high risk" pool for individuals ($$$$) because no insurance company would accept me. Can you tell I'm still extremely bitter?

I've been supremely lucky to remain on the job with my employer of 37 years--a nonprofit agency. I'm working part time, but not holding down a full time job was my choice six years ago when I turned 70. Of course, that was pre-Great Recession, when middle class retirees could anticipate that their modest investment portfolio would actually earn a reasonable rate of interest. (Silly, weren't we?!) I SO agree with you, Ronni, that almost everyone but those who caused the recession have suffered from its effects.

We haven't suffered to the degree that many older workers are in that we still have our condo and some savings. But, most important, I'm still working. I'd like the freedom to retire, but I no longer have that luxury. I need to work as long as I'm able and have a job. Our income will definitely take a hit when I retire!

I cannot even imagine trying to compete in today's job market. I'm realistic enough to know my chances of landing a job would be slim to none. I wish you the best, Lee, and hope you land that job! Even $10.50 an hour will help, but "with benefits" is the key.

Wow, PiedType, even though it's not terribly useful, I'd be plenty bitter if that had happened to me, especially at the PRIME age of only 55! I'm guessing that you either had a completely myopic, ageist boss or worked in an industry that was hard-hit by outsourcing and downsizing--maybe both.

I think there's a huge difference between the kind of capitalism we grew up with and "vulture" capitalism, and it's the latter that has been in the ascendancy over the past 20 years. We're back to the days of the Robber Barons--which should make Conservatives deliriously happy. The superrich are feathering their own nests royally, using 21st centry tools, at the expense of the rest of us. Eventually, that's got to change. There are--and always will be--more of us than there are of them. That's not a lot of help to you, though!

Loved your last sentence. I'm still recovering from the gloom of finding out yesterday that the "retirement age" is 66, not 65.

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