America Needs To Improve How It Treats Its Older Workers

The U.S. has just about 39 million workers 55 and older. What’s it like being one of those 39 million older workers? You can’t generalize. They range from billionaire Warren Buffett to Butch Marion, a 82 year old clerk at Walmart
who was able to retire after someone sponsored a GoFundMe campaign for him.

Welcome to old age in America.

Most people do not have enough to retire on as they approach their mid-60ssixties — 44% of households with members aged 55-64 have no savings.

Because near retirees have no significant source of retirement income besides Social Security, many will have to take any job they can find. Even bad ones. I am always looking out for good data on what older workers face and New School graduate student Owen Davis and I found some at the January 2023 American Economics Association/ ASSA conference in balmy New Orleans.

Involuntary Retirement

It is hard for older workers to keep a job, as Urban Institute’s Richard W. Johnson showed the economists gathered there. Older workers do worse under conditions of layoffs and business closures.

Job-finding is easier for workers under 50 who get displaced from a job — more than 70% of displaced workers under 50 typically find new work within three years of their job loss. For workers 55-61, however, that number falls to 59%. Among those who can start claiming Social Security, at ages 62 and older the reemployment rate falls to just 38%. So they claim early Social Security benefits at reduced monthly benefits or they start bidding down and take jobs that are worse than their previous ones.

Early retirement is an all-too-common last resort, and involuntary retirements increase the risk of depression and downward mobility.

Labor market scarring is another effect of job loss beyond the pain of unemployment. Scarring refers to the earnings losses experienced by displaced workers who do manage to find work again. Once again, things get worse as you move up in age. Re-employed displaced workers, age 55-61, earn 22% less than they did before, a scarring effect that is more than twice as severe as for those in their 30s. Weekly earnings are 29% lower for reemployed displaced workers 62 and older.

The bottom line: Older workers who are displaced from their jobs take big pay cuts to return to the labor force. This is no surprise for those of us who follow the growing literature on age discrimination.

Here is a dim light of hope. Johnson found reemployment rates have improved over time for workers ages 55 to 61, but unfortunately not for workers ages 62 and older. This question also happens to be the dissertation topic of newly-minted New School PhD (and my former student) Aida Farmand, now at UC Berkeley’s Labor Center, whose work finds that older workers have become more exposed to the risk of job displacement over time.

Shift Work

Leah Abrams of the Harvard T.H. Chan School of Public Health provided a bit of good news for older workers from the Shift Project on service workers’ hours and schedules, especially last-minute changes in hours, being on-call, and working back-to-back closing and opening shifts, known colloquially as “clopening.”

Employers in retail settings and restaurants juggle their experience with uncertain demand and thin margins by asking workers to be on call and work long hours. Worker advocates argue employers unfairly pass these uncertainties onto their workers, resulting in schedules that force workers to choose between their job security on the one hand and their health and family responsibilities on the other.

Scheduling practices were a prime issue in the unionization drives at Starbucks
. Starbucks Workers United made scheduling practices a component of its key demands, and Starbucks has said it updated its scheduling guidelines in response to employee pressure.

The Shift Project finds that 80% of older service workers face at least one form of instability, the most common being last-minute changes in shift timing. Yet for each type of scheduling issue, older workers tend to be better off than younger workers.

While half of those aged 18-29 reported working clopening shifts, just a third of workers aged 50-80 did. Twenty percent of the youngest group had last-minute shift cancellations, while just 13% of the older group did.

One might wonder if all these older workers who do endure jobs with scheduling difficulties simply enjoy that kind of work. Is it that they simply don’t mind being on-call or having last-minute schedule shifts?

Well, probably not. Abrams and her coauthors find that crummy scheduling among older workers is strongly associated with a wide array of ills: “psychological distress, poor-quality sleep, work-family conflict, economic insecurity, job dissatisfaction, and intentions to look for a new job.” Clearly, these workers could be better off with better schedules and New York, Chicago and Philadelphia have passed laws that give workers the right to stable and predictable schedules.

America’s Bad Retirement Security System = Bad Jobs for America’s Older Workers

The crux of the problem of bad jobs for older workers is that insufficient retirement savings and low Social Security benefits force older workers to accept bad jobs. Higher minimum wage laws, better training, and hour protections all can help to bring up job quality for older workers. Workers with the ability to walk away from a bad job can negotiate better pay and working conditions with their existing or new employers, individually or as part of a union.

Expecting workers to work longer — or use GoFundMe campaigns — is not a practical solution to a failed retirement system that doesn’t allow all workers to save for their retirement in a consistent, fair, and efficient way. Americans already work more, and longer, than workers in most rich countries. Working longer is a lame answer to bad pensions.

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