To solve the labor shortage, all eyes are on the more than 1.3 million older workers who were forced out of the US labor force during the pandemic or left voluntarily. But don’t hold your breath for them all to come back. Sure, some older workers are returning, but they are outliers. Displaced older workers face challenges returning to work and will not return en masse unless the US government takes significant steps to end age discrimination and help with health care costs . In the meantime, there are some things individuals can do to get back to work.
First, there is no evidence that the additional number of people who retired during the pandemic beyond normal were mostly people whose retirement accounts were drained who were sick from working. Unemployment was imposed on most additional retirees. If American history is any guide, 55% of low-income workers aged 55 and older were forced to leave the workforce from 2010 to 2018, while 32% of middle-income workers faced the same fate. Of the high-income workers in the top 10% of the income distribution, 30% were forced to retire earlier than planned.
Since most people were kicked out instead of assuming they retired, I believe there are a lot of frustrated older workers out there who are covering up and don’t think they’ll ever be paid again. will be hired.
The US retirement rate, or the number of retirees who are working again, has exceeded pre-pandemic levels. Yet, all this is happening on the margins; The rate is rising, but the number of people returning to work is nowhere near how many older workers actually lost their jobs. Another indication that retiring may not be by choice, but because of employers’ preference for younger workers, is that wage growth for older workers has largely fallen on the back of inflation and the wage benefits of mid-career workers. leaving behind. Older workers’ wages increased by 3.7% in April from a year ago, while workers aged 35 to 54 saw an increase of 4.9%. If older workers are going to fill some labor gaps, wages and/or working conditions will need to improve to lure them back.
Age discrimination prevents many retirees from returning to work. Whether older people take the job depends on whether employers want to hire them. The US federal government can help.
Ageism holds the unproven belief that older workers are untrained, move slowly, fall ill often and are too expensive. Without strict anti-discrimination laws and enforcement, older workers cannot compete for jobs. The American Association of Retired Persons (AARP) reports that concern among older workers about age discrimination has reached its highest level in recent decades. The good news is that when the US labor market is tight, it is weak.
The federal government can help by lowering the eligibility age for Medicare to 50. That way, Medicare will cover some of the health care costs before the employer’s health insurance comes in. This would significantly reduce firms’ spending to hire older workers, who are at a disadvantage because health insurance for older workers is significantly higher than for younger workers.
Older workers also need more bargaining power. Across the board, unionization significantly improves workers’ access to health care plans and pensions, and increases safety outcomes, including paid sick leave and time off. Also, unionized workers earn far more than their non-federal counterparts in similar jobs.
The government may also pay more attention to the unusual problems faced by older people. For example, worker training programs are not encouraged to accept older workers because it takes them longer to find a new job and this makes the programs’ success rates appear poorer. Lawmakers have introduced a bill that would create an outdated labor bureau to better coordinate government resources and modernize age discrimination laws and worker training.
What can individuals do? First, stay in the game. Working longer hours will help delay your savings. Focus on your skills rather than investing in training. Do you use the Internet to order items and connect with friends and family? You are tech savvy. There are also services that offer virtual coaching sessions for people aged 55 and over. AARP provides up-to-date tips for older workers seeking jobs. In addition, the US National Council on Aging has mature work councils along with dedicated programs for low-income seniors looking for work.
Unfortunately, most older people are nowhere close to being financially ready for retirement. If the labor market was friendly to them, they might have had a good chance. Until then, most “help wanted” signs won’t be filled by retirement any time soon.
Teresa Ghillarducci is the Schwartz Professor of Economics at the New School for Social Research, co-author of ‘Rescuing Retirement’ and a member of the Board of Directors of the Economic Policy Institute.