Yes, COVID-19 makes the advice to work longer in old age a cruel suggestion since older workers were hardest hit in the 2020 recession. But it isn’t just COVID-19 that makes it difficult, the labor market has been forcing older workers out for years. The obsession with telling people to work longer because they don’t have enough retirement savings is oblivious, unrealistic, and a little bit savage.
Compelling people to work longer is not the magic wand to solve the retirement income security crisis. As age discrimination and other barriers persist, older workers are continuing to get pushed out of the labor force which has led to a host of labor market difficulties and phenomena only older workers experience.
Between 2010 and 2018 — the latest year available from the high-quality longitudinal survey from the University of Michigan — 55 percent of older workers (workers age 55+) in the bottom half of the income distribution were forced to leave the workforce due to layoffs, plant closings, age discrimination, poor health, and family concerns. And it’s not only low-income workers, a substantial share of middle-class older workers are forced out as well. Over 32 percent of older workers in the next 40 percent of the income distribution, or the middle class, were forced out of the labor force. Even the most prosperous older worker was not left unscathed, 30.4 percent of those in the top 10% of the income distribution were forced to retire before they planned.
Why Older Workers Matter for the Whole Economy
Since half of the net addition to the labor force in the next ten years will be workers over 55. Estimates from the U.S. Bureau of Labor Statistics show out of 6 million jobs expected to be added to the economy by 2029, 4.4 million will be filled by workers over 55. It is time we enact policies which address this large and overlooked group of workers.
Policies to Help Older Workers
One of the first and most important is creating an Older Workers’ Bureau in the Department of Labor. An Older Workers’ Bureau (OWB) within the U.S. Department of Labor could advance a full policy agenda addressing the unique conditions and concerns of this vulnerable population. By collecting evidence to inform standards and policies, the OWB would promote the welfare of older workers and ensure retirement security. The Bureau would identify, investigate, and interpret older workers’ concerns. Additionally, it would create policies to advance quality employment opportunities for this increasingly at-risk population which is growing by the tens of millions. Last, the OWB would be responsible for outreach and education by promoting OWB policies and raising awareness of the economic and societal benefits of quality work for older workers.
Alongside creating the OWB, Congress should lower the Medicare eligibility age to 50 to ensure laid-off older workers get the care they need. Medicare should also be made first-payer, covering medical expenses before private insurance, to lower employers’ healthcare costs. Easing the burden of hiring older workers would help prevent involuntary retirements while increasing older workers’ health coverage.
Additionally, increased unemployment benefits—even more than the $600 a week which expired July 31, 2020—would help older workers remain in the workforce, preserve retirement savings, and put off claiming Social Security early, protecting their monthly benefits from the early retirement penalty. For a full list and explanation of policies to help address the long-and-short term crisis older workers are facing— including expanding Social Security, requiring paid-sick leave, creating Guaranteed Retirement Accounts, and enforcing age discrimination laws—see my proposed policy agenda for Congress and the Biden Administration here.