At any rate, my concern with the idea of raising the retirement age is twofold. One is the pretty obvious point that many jobs are a great deal more physically taxing than the job of the average economist or political pundit. But you could in principle handle this fairly and equitably through the Disability Insurance element of Social Security. The other issue is that as best I can tell from the labor market fate of people in the 50-65 age bracket, employers aren’t exactly chomping at the bit to hire older workers in any capacity.
He points to a Washington Independent piece by Annie Lowry that starts with something that will sound familiar to Main Street readers: “Too young not to work but too old to work?”
Last week, Ashley Keith told us about a Working America member who characterized herself as “too young to retire but too old to hire” and Susan Bruce pointed to rising suicide rates among baby boomers, while in the past Mitchell Hirsch looked closely at record levels of unemployment for older workers.
Lowry takes a look at the age discrimination component of older workers’ struggles.
McCann called age discrimination in hiring “the most under-reported form of discrimination” and “prevalent” throughout the recession, as an average of 5 workers compete for every job opening. In an interview, she explained why age discrimination is so hard to quantify: “[It is] the lack of proof. If you’re laid off, you might be in outplacement, and see that everyone who got laid off was older. Or, you might have friends in your office to tell you that a younger person took your job when your employer told you the position was being eliminated. But hiring discrimination is much harder to see, and can be impossible to prove. In most cases, you’re not going to know who was hired. You’re not going to know how they filled the position. There’s just a hunch, or a feeling, that you’re not getting through the door because of your age.”
Incidences of age discrimination in firing are much clearer to see, and have risen along with the recession. The Equal Employment Opportunity Commission says age discrimination cases have jumped 17 percent since the start of the recession, and climbed 30 percent between 2007 and 2008. But virtually all of those cases involve layoffs, rather than the lack of job offers.
Still, evidence of age bias in hiring is accumulating in academic research and anecdotal reports to the EEOC, Commission on Civil Rights and AARP. In one famed 2005 study, a Texas A&M economist sent out 4,000 job applications for entry-level positions. (The resumes were only women’s.) Older workers were 40 percent less likely to receive a response back. And of the letters sent to Congress last week, a vast majority mentioned age, many coming from older workers who had applied for hundreds of positions, to no avail.
What happens to all those people who’ve worked their whole lives if Congress doesn’t pass jobs legislation, keeps chipping away at the safety net for jobless workers, and then jacks up the retirement age?
One weird thing here—or a thing that shows how thoughtless and out of touch many politicians truly are, even with basic self interest—is that baby boomers vote at high rates. If Congress won’t take care of their interests, what hope do the rest of us have?
Our 401(k)’s are one of the economic risks the vast majority of us live with—but don’t hear much about. Robyn Blumner writes in the St. Petersburg Times that the modern retirement plan is to cross your fingers.
In the United States, Social Security provides the average worker with only 45 percent of their preretirement income, while in Denmark workers can retire with 91 percent of their prior salary.
Americans were supposed to make up the difference through employer-sponsored pension plans. That is, until employers shook off that obligation by exploiting a tax vehicle for retirement savings—the 401(k)—that was intended to encourage employees to put money aside for retirement, not upend employer pensions.
With only about 12 percent of workers between 30 and 39 now enrolled in a defined-benefit pension plan, according to the Center for Retirement Research at Boston College, employers are off the hook. They can unilaterally reduce or even eliminate 401(k) contributions.
You cross your fingers you earn enough to save some towards retirement. You cross your fingers your employer contributes even a little. You cross your fingers the market doesn’t crash.
In The Great Risk Shift, Jacob Hacker lays out the deterioration of retirement benefits:
Twenty-five years ago, 83 percent of medium and large firms offered traditional “defined-benefit” pensions that provided a predetermined monthly benefit for the remainder of a worker’s life. Today, the share is below a third….Between 1989 and 1998 - a decade in which 401(k) coverage exploded and the stock market boomed - the share of families whose pension savings allowed them to replace at least half of their prior income in retirement actually declined, as old-style guaranteed pensions rapidly became a thing of the past….
About a quarter of companies have either suspended their 401(k) plan match or are considering doing so because of the economic downturn, according to a recent survey by CFO Research Services and Charles Schwab. The list of companies that have suspended matches includes Hewlett-Packard, Sears Holdings, Starbucks and Eastman Kodak.
“Nearly half” of “large companies” that have diminished their workers’ retirement security by reducing or suspending 401(k) contributions say they’ll return them within a year. “Only” 5% say they won’t return 401(k) matching at all. And some companies that do reinstate matching contributions will change them.
So…large companies? Defined how, and accounting for what percentage of workers affected? Is it “only” 5% if you’re one of the workers to see your chance at a comfortable retirement diminished? And we can totally rely on the companies that change how they contribute to 401(k)’s to change it in ways that benefit their workers, right?
Oh, yeah. Another thing. What’s going to happen to the retirement funds of these companies’ CEOs?
Hacker’s “great risk shift” argument remains a crucial one for understanding what’s happening to workers in this country. Bit by bit, the building blocks of the middle class have been chipped away. In good times, workers are told they don’t need defined benefit pensions because their 401(k) will give them ownership in a stock market that will rise forever. In recessions, they’re told that they can’t have employer matching in their 401(k) because, well, they just can’t. And after the recession, eh, we’ll see what they get back.
And Hacker’s fundamental principle is a powerful moral argument:
If you work hard and do right by your families, you shouldn’t live in constant fear of economic loss.
While signing up members in South Whithall, PA, I came to the house of a lady who is retired and disabled. She needs a wheelchair and walker just to get around the house. She also has an autistic child she takes care of. She is struggling to pay her own health care bills, as well as struggling to do all she can for her autistic child.
A new member of Working America in Wescosville had the misfortune of having to come out of retirement in order to pay for her husband’s medical bills. She works at a minimum wage job just to pay the $300/month they need for blood thinners needed after her husband’s second stroke. She joined Working America hoping one day to see universal health care in America.
I spoke to a guy who worked for a local factory for 31 years and was forced into early retirement. Two months ago he went to the Social Security office twice to get his benefits started. He has to return two more times and each appointment requires a month and a half wait — so it will be at least five months before he sees any of his Social Security benefits. He has 13 and 15 year old daughters.
When he answered the door he seemed reluctant to speak to anyone, but his attitude changed when I told him who I was and what I was doing. “Oh, come on in!” he said, and told me his story. After listening to him I told him that retirement security is one of the very things we are fighting for, it was a great thing to see his face light up. He not only signed up, but thanked me for what we do.
I knocked on a retired woman’s door the other night, who told me that her dad is also retired and that they have to live together in order to survive. They cannot afford to live on their own with the money they have. Both of them worked their entire lives and are now struggling to maintain, now that they are retired. Their story touched me because these people don’t have the means to support themselves, after YEARS of working! Where are the retirement benefits? Why should we all have to work, shedding blood, sweat and tears, with nothing left to show for it, when we’re not able to work anymore? It just isn’t right.
A new member of Working America in Wescosville had the misfortune of having to come out of retirement in order to pay for her husband’s medical bills. She works at a minimum wage job just to pay the $300/month they need for blood thinners needed after her husband’s second stroke. She joined Working America hoping one day to see universal health care in America.
I knocked on a retired woman’s door the other night, who told me that her dad is also retired and that they have to live together in order to survive. They cannot afford to live on their own with the money they have. Both of them worked their entire lives and are now struggling to maintain, now that they are retired. Their story touched me because these people don’t have the means to support themselves, after YEARS of working! Where are the retirement benefits? Why should we all have to work, shedding blood, sweat and tears, with nothing left to show for it, when we’re not able to work anymore? It just isn’t right.
