Struggles for Older Workers in the Workplace
It’s happening once more. The expulsion of many older workers from the workforce was one of the perverse hallmarks of the Great Recession ten years ago. A large number of experienced workers were forced to leave their jobs or retire early due to unforeseen circumstances. Many never fully recovered financially or emotionally, and their careers were scarred and left without a dignified ending. For mature workers, the current Covid-induced recession is causing similar job insecurity. Since March, many senior-aged men and women with both high and low skill levels have left the labor market. In other words, the layoff of the elderly is widespread.
Unfortunately, this isn’t turning out to be a short-term break for these workers, but rather a longer-term separation marked by escalating egregious trends. Newly trending labor shifts are eroding the employment security of older workers, just as they did during the last recession. Labor-saving technologies and increased work loads for younger and less expensive employees, for example, have reduced the need for management to restore previous personnel levels. When faced with dismissal and rehiring, mature employees once again find their bargaining power eroded. Senior workers are feeling increasingly insecure and inadequate as a result of weak or non-existent unions, the rise of the gig economy, and continued lenient enforcement of age-discrimination laws, not to mention the harmful economic disruption caused by Covid.
The Retirement Equity Lab at the New School investigates the factors that influence the quality of retirement, which necessitates a look at whether retirement is voluntary or forced. Their assessment of older workers’ plight is sobering. Even for those older workers who have not yet been laid off, the future is uncertain. This generation is increasingly aware that they are less employable than younger workers. Those over the age of 55 often realize that if they quit their current job, their chances of finding something comparable or better are slim. For many people, it is preferable to stay in a job that isn’t fulfilling rather than risk being laid off.
Long-term commitment to a profession and/or an employer has traditionally been associated with relatively high earnings. Isn’t that reasonable? When an older worker is rehired after a job loss, however, hourly wages are typically lower than in the previous job. Workers aged 50 to 61 receive a 20% pay cut in their new job, while those aged 62 and up see a 27% pay cut. Furthermore, once a worker reaches his or her fifties, periods of unemployment following a layoff are longer than for workers under 50.
The lack of bargaining power of older workers is exacerbated by the growing uncertainty and lack of confidence they face. Employers are well aware that they have the upper hand when it comes to older workers, with the exception of situations where the worker possesses a unique or difficult-to-find skill. This is regrettable. A lifetime’s worth of effort deserves to be valued and respected. In the modern era, retirement should be a reward for decades of toil, dedication, and achievement, not an imposed isolation or banishment due to the vicissitudes of employment economics.
As the Retirement Equity Lab points out, policymakers may need to intervene with schemes to help older workers who have been laid off prematurely. Employers could, for example, offer rainy day or emergency savings plans through payroll deductions that become available when needed to supplement unemployment benefits, or the federal government could step in and offer a guaranteed retirement account savings option to supplement what retirees receive from Social Security. Of course, stricter enforcement of the 1967 Age Discrimination in Employment Act would be extremely beneficial.
Careers are a calling and a vocation that require mastery in order to contribute to society. Work is merely a means to an end for others. In any case, growing old should not be viewed as a liability or a weakness to exploit.