A new report by The New School’s Retirement Equity Lab finds that more than half of older workers may be forced to retire involuntarily as a result of the novel coronavirus. In June, the unemployment rate for workers over 55 was 9.7 percent. Unless Congress steps in, the number of older adults living in poverty is projected to increase by millions.
Nearly four million older workers are likely to lose their jobs because of the pandemic and not return to work. Since March, nearly 3 million older workers have lost their jobs and left the workforce. Another 1.1 million older workers will be forced to leave their jobs in the coming months, according to projections, and will leave the workforce.
As compared with the 2007 Great Recession, 50 percent more older workers between 55 and 70 have already lost their jobs and permanently left the workforce. Back then 1.9 million older workers lost their jobs as compared to 2.9 million today.
Between March and June, five million older workers have lost their jobs. Only about half of them are looking for a job. The rest are not.
Older workers who find new work are not likely to get paid as much as they had been paid. Their new income is estimated to be 23-41% less than their old income. That’s on top of the fact that it takes older adults twice as long as younger workers to find new jobs.
These job losses for older workers, if not addressed, will mean that many more older adults will live in poverty. It will also make the recession worse than it already is. Older workers will not spend as much money as they had been spending.
And, these job losses take a disproportionate toll on people of color and women, deepening racial and gender disparities. Older workers who are white are less affected by job loss than older workers who are black and hispanic. White older men are least likely to experience job loss.
More than one in ten older women of color (11.8 percent) are losing their jobs permanently. White women fare somewhat better: 7.5 percent of white women are losing their jobs permanently. A little more than five percent of older white men (5.4 percent) are losing their jobs permanently.
Older workers of color are more likely to have smaller retirement savings and to live in poverty in retirement. They are retiring earlier. They will need to spend their retirement savings earlier. They will need to take Social Security earlier, meaning lower benefits.
To address this crisis, Congress needs to continue unemployment benefits for older adults. Older adults also should not be forced to look for work during this pandemic in order to receive unemployment benefits. Forcing them to look for work to obtain benefits puts them at grave risk. And, Congress should increase the amount of unemployment benefits.
In addition, the authors recommend that Congress lower the Medicare eligibility age to 50. Lowering Medicare’s eligibility age would make it easier and less costly for older workers to get health care. It would also reduce the financial burden for health care imposed on employers who hire older workers.
Congress should increase Social Security benefits by $200 a month. The minimum benefit should also be increased.
Finally, Congress should establish a Federal Older Workers Bureau to improve working conditions for older adults and increase profitable work opportunities for them.
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