Older workers have it rough, even in a job market with historically low unemployment.
“Older workers are more likely than younger workers to think they can’t find a job comparable to their current one, a well-founded fear that persists at every earnings level and reflects the reality of an unfriendly labor market,” according to The New School’s Retirement Equity Lab (ReLab).
Headed by high-profile policy wonk Teresa Ghilarducci, ReLab finds older workers are less likely to quit their jobs, even at a time of historically low unemployment, because of an inability to find one better.
“This further erodes older workers’ bargaining power, subjecting them to bad jobs and suppressed wages,” according to ReLab’s quarterly report on the status of older workers.
The report also finds:
- The wage premium for experienced workers is declining. Between 1992 and 2015, the effect of an additional year of experience on the hourly wages of older workers fell by 45%.
- When older workers get rehired, their hourly wages are lower than their previous job. Following a job loss, median hourly wages of older workers ages 50-61 are 20% lower on the new job than the old job and for workers 62 and older, wages are 27% lower on the new job.
- Even if they voluntarily quit their previous jobs, older workers’ (51 and older) wages decrease by 5%.
- Moreover, older workers who change jobs in their fifties experience longer spells of unemployment compared to older workers who do not.
Their fears are founded
“Older workers’ fears are founded in fact,” Ghilarducci said in a statement. “Leaving them on their own to face an unfriendly labor market and the resulting insecurity further exacerbates older workers’ declining bargaining power. The solution is to create policies that give older workers viable alternatives to bad jobs and suppressed wages.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
