Inflation, recession huge risks for older employees near retirement
forget the great resignation. The reorganization of Gen Z workers, who seek fulfillment and treat their jobs like a game of musical chairs, will be fixed in time. They have their whole lives ahead of them to find something that fits.
The biggest crisis is what to do with all the workers over 50 who are looking for paid employment. This is one of the worst times to be a worker in the twilight of a career. Only half of americans they are constantly employed throughout their 50s. Last year, more than a quarter of workers aged 55 to 59 they were out of the labor force, which meant they had no jobs to retire from.
COVID-19 exacerbated this trend, as millions of older American workers disproportionately lost their jobs.
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Around the world, stable full-time employment culminating in pensions has become a relic of the pre-pandemic past. In the United States, an increasing number of workers cannot afford to retire, not with inflation and uncertain retirement savings. Now, a worker must wait until age 70 to collect maximum Social Security benefits, and Congress is expected to discuss raising the age for Social Security eligibility next year.
It makes sense that people could work longer to increase their retirement accounts. But many of those who need to work longer cannot do so Because they lose their jobs long before they reach retirement age and cannot find another. So they actually retire.
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Multiple factors create challenges for older workers
The disappearance of stable employment with a living wage and benefits, once the engine of upward mobility, has added to growing inequality. Global crises like COVID-19, changing business models, and emerging technologies have led to an increase in low-quality temporary jobs.
If workers have physically demanding jobs, such as in retail or hospitality, poor health may force them to drop out of school. Many workers in their 50s also have caregiving responsibilities for older generations, which temporary jobs don’t suit. And of course there is age discrimination.
A Brookings Institution report found a strong relationship between having a steady job in your 50s and working in your 60s and beyond. Therefore, interventions to support older workers need to start earlier, even at age 40. This can be achieved by improving the quality of low-wage jobs, including through higher minimum wages, greater flexibility in work hours, and paid leave, to reduce turnover. That will help people work longer.
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Likewise, for companies, this is an opportunity to avoid long-term productivity losses by maintaining a stable workforce. Businesses that rely on a disproportionately large number of hourly workers tend to have higher turnover rates. they are too less likely to invest in employee training and technologies.
Helping older workers develop in-demand skills can help them get jobs again and meet the needs of businesses.
Such efforts are vital to maintaining Social Security benefits, expected to drop by more than 20% Come 2034 unless Congress and the President intervene. Without action, monthly benefits would be reduced by hundreds of dollars on average, and anyone 55 and under would never get a full benefit.
And yet, unemployment statistics tend to leave out 50-something workers who are forced into early retirement. That’s because they’re not in the working-age workforce and haven’t yet reached the benchmark ages associated with retirement, according to Beth Truesdale, a sociologist and author of the Brookings article. Workforce policy and retirement policy should be viewed as a single system, but they are not, and these workers fall into the gap.
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Demographic changes threaten the global economy
It’s a gap that will only get wider and harder to fill as time goes on.
Which is alarming, given that a population agingnot growing, it’s the time bomb.
The world population has just reached the 8 billion milestone, with rising life expectancy and declining fertility rates. Worldwide, people age 75 and older are the fastest growing group in the workforce. Today, 40 million Americans are 65 or older, a the number is expected to double in the next 40 years.
Failure to prepare for this inescapable demographic shift will result in a shrinking workforce struggling to support a growing number of “retirees.”
To be sure, improving the working conditions of low-wage jobs or training programs alone will not solve the myriad of challenges older workers face. Years discrimination persists.
IBM, for example, has forced the abandonment more than 20,000 workers over 40 years of age in the last five years, and it is facing legal action as a result.
Unfortunately, among the more than 40 million Americans age 50 and older in the workforce, according to a 2018 Analysis by ProPublica and the Urban Institutehalf of them are likely to be laid off or forced into retirement, regardless of income, education level, or geography.
Without stronger legal protections for older workers, and without changing business models to value work experience as a necessary competitive advantage for higher productivity, older workers will have fewer opportunities, resulting in higher rates of old-age poverty. .
The disappearance of 50-something workers should be a more prominent factor in debates about the future of work. Even if all the quirks of Gen Z work habits were ironed out tomorrow, a massive demographic jobs crisis is still looming.
katrin park is a freelance writer and former director of communications for the International Institute for Food Policy Research.