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For the first time in nearly 50 years, older workers face higher unemployment than their mid-career counterparts, according to a study published this week by the New School in New York City in the United States.
The pandemic has wreaked havoc on the employment of people of all ages. But the researchers found that over their course, workers 55 and older lost their jobs sooner, were rehired more slowly, and continue to face greater job losses than their 35-54 year-old counterparts.
It is the first time since 1973 that such a severe unemployment gap persists for six months or more.
AARP said the study reinforced concerns about the economic impact of the virus on older workers. When people age 50 and older lose their jobs, it typically takes them twice as long to find work as younger workers, estimates the organization representing the interests of older Americans.
The pandemic “may be something that’s pushing people out of the workforce and they may never come back,” said Susan Weinstock, vice president of financial resilience programming for AARP.
In all recessions since the 1970s, older workers had persistently lower unemployment rates than mid-career workers, in part because of seniority benefits.
But in the current recession, older workers experienced higher unemployment rates than mid-career workers in every month since the pandemic began.
Unemployment rates for older workers from April to September were 1.1% higher than those for mid-career workers, 9.7% versus 8.6%. The rates were compiled using a six-month moving average and were much worse for older workers who are black, female, or lack college degrees.
Among the recently unemployed older workers is Legasse Gamo, 65. He was fired in March from his job as a baggage handler at Reagan National Airport in the Washington suburb of Arlington, Virginia.
While Gamo is afraid of exposing himself to the coronavirus by working with other people, he said he has looked for work, because he feels he has no choice but to accept whatever job he can find.
The contractor he worked for, Eulen America, has required its laid off employees to reapply for their jobs. Gamo did so but said he has not received a response.
The immigrant from Ethiopia supports three grandchildren, ages 6, 12 and 14, who live with him. His daughter is still employed, but her salary is not enough to cover her expenses. Gamo receives $ 210 a week in unemployment insurance payments and said he has spent almost all of his savings.
“I just want to get back to my job as soon as possible to support my family because I’m afraid we will end up homeless,” Gamo said.
The New School study focused only on workers with established careers. As a result, it did not screen workers under the age of 35.
It found that the pandemic has posed a unique risk to older workers, said Teresa Ghilarducci, director of the New School’s Schwartz Center for Economic Policy Analysis.
“The higher unemployment rate for older workers could be because this is a once-in-a-lifetime opportunity for employers to fire older workers and not be afraid of the labor department investigating it,” Ghilarducci said.
She added: “Age discrimination rules are not being strictly enforced. Employers, fearing economic instability, may want to ditch relatively more expensive workers and risk training new workers when the economy recovers.”
Older workers often face age discrimination, making it difficult for them to find work. The researchers believe employers laid off and resisted rehiring older adults, in part because they tend to face more serious health risks when infected with the virus.
Rising unemployment for older workers could force more of them to retire early and involuntarily, worsen their financial well-being, and exacerbate the financial disparities that women, minorities, and those without college degrees already experience in terms of retirement security.
New School researchers estimated that 1.4 million workers 55 and older have lost their jobs since April and remain unemployed. The figure does not include workers who were unemployed in April and left the workforce.
The situation could have profound ramifications for older workers approaching retirement because their final years on the job are critical for those who haven’t saved enough for retirement and hope to work longer to shore up their retirement funds.
“Retirement security is very fragile and many of them never recovered from the recession in the first place,” said AARP’s Weinstock. “They were planning to work to get back the money they hadn’t saved and then they can’t make the recovery payments they need.”
The Schwartz Center for Economic Policy Analysis at the New School has estimated in separate research from Monday’s study that 43 million people who are now between the ages of 50 and 60 will be poor when they get older due to economic conditions or lack of adequate savings in retirement plans. .
Researchers who conducted the new study recommended that Congress increase and extend unemployment benefits for older workers, discourage withdrawals from retirement accounts, reduce Medicare eligibility to 50, and create a federal Office for Older Workers to promote the welfare of older workers. – AP
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