Many people who need to work longer are unable to do so because they lose their jobs long before they reach retirement age and can’t find another one.
Social Security to increase as Americans struggle with inflation
Social Security will increase to match the cost-of-living increase due to inflation as Americans struggle to make ends meet.
Claire Hardwick, USA TODAY
Forget the Great Resignation. The shakeup of Generation Z workers, seeking fulfillment and treating their jobs like a game of musical chairs, will sort itself out over time. They have their whole lives ahead of them to find something that fits.
The larger crisis is what to do with all the older-than-50 workers searching for gainful employment. This is one of the worst times to be a worker in the twilight of a career. Only half of Americans are steadily employed throughout their 50s. Last year, more than a quarter of workers ages 55 to 59 were out of the workforce, which meant that they didn’t have jobs to retire from.
COVID-19 exacerbated this trend, as millions of older American workers disproportionately lost their jobs.
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Across the globe, full-time, stable employment that culminated in pensions has become a relic of the pre-pandemic past. In the United States, an increasing number of workers can’t afford to retire, not with inflation and uncertain retirement savings. Now, a worker must wait to age 70 to collect maximum Social Security benefits, and Congress is expected to discuss raising the age for Social Security eligibility next year.
It makes sense that people should be able to work longer to boost their retirement accounts. But many of those who need to work longer are unable to do so because they lose their jobs long before they reach retirement age and can’t find another one. So they effectively retire.
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Multiple factors create challenges for older workers
The disappearance of stable employment with a living wage and benefits – once the driver of upward mobility – has added to growing inequality. Global crises like COVID-19, changing business models and emerging technologies have led to the rise of low-quality, temporary jobs.
If workers have physically demanding jobs such as in retail or hospitality, poor health can force them to drop out. Many workers in their 50s also have caregiving responsibilities for older generations, which temporary gigs don’t accommodate. And of course there’s ageism.
A Brookings Institution report found a strong relationship between holding steady employment in one’s 50s and working in their 60s and beyond. So interventions to support older workers must start earlier on, even in one’s 40s. This can be done by improving the quality of low-wage jobs – including through higher minimum wages, greater work schedule flexibility and paid leave – to reduce turnover. That will help people work longer.
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Likewise for firms, this is an opportunity to avoid productivity losses in the long run by maintaining a stable workforce. Firms that rely on disproportionately large numbers of hourly workers tend to have higher turnover rates. They are also less likely to invest in employee training and technologies.
Assisting older workers with developing skills that are in demand can help them get jobs again and meet businesses’ needs.
Such efforts are vital to maintain Social Security benefits, projected to be cut by more than 20% come 2034 unless Congress and the president intervene. Without action, monthly benefits would shrink by hundreds of dollars on average, and anyone 55 or younger would never get a full benefit.
And yet, unemployment statistics tend to leave out 50-something workers who are forced into early retirement. That happens because they are not part of the prime-age workforce, and they haven’t yet reached the benchmark ages associated with retirement, according to Beth Truesdale, a sociologist and author of the Brookings paper. Labor force policy and retirement policy should be considered as one system but are not, and these workers fall through the gap.
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Demographic changes threaten global economy
It’s a gap that’ll only get wider and harder to fill with the passage of time.
Which is alarming, given that an aging population, not a growing one, is the ticking time bomb.
The global population has just hit the 8 billion milestone, with life expectancy soaring and fertility rates dropping. Across the world, people 75 and older are the fastest-growing group in the labor force. Today, 40 million Americans are 65 and older, a figure expected to double over the next 40 years.
Not preparing for this inescapable demographic shift will result in a shrinking workforce that struggles to support a ballooning number of “retirees.”
To be sure, improving the working conditions of low-wage jobs or training programs alone will not solve the myriad challenges older workers face. Age discrimination persists.
IBM, for example, has forced out more than 20,000 workers older than 40 in the past five years, and it is facing legal action as a result.
Unfortunately, among the more than 40 million Americans 50 and older in the labor force, according to a 2018 analysis by ProPublica and the Urban Institute, half of them are likely to be laid off or forced into retirement regardless of income, education level or geography.
Without stronger legal protection for older workers and changing business models so they value work experience as a competitive advantage necessary for greater productivity, older workers will face fewer opportunities, resulting in higher rates of poverty in old age.
The disappearance of 50-something workers should factor more prominently in future of work debates. Even if all the quirks of Gen Z work habits were resolved tomorrow, a massive demographic work crisis still looms.
Katrin Park is a freelance writer and a former director of communications with the International Food Policy Research Institute.
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