This report outlines the working conditions of K–12 school support staff across the country.

Typically, paraprofessionals, classroom assistants, administrative assistants, custodians, food service workers, bus drivers, and other nonlicensed staff in schools already receive low pay and inadequate hours during the school year. These jobs are disproportionately held by women, Black and brown workers, and older workers.

In addition to low wages, support staff often do not work for school districts over the summer months—which translates to a potential loss of 10 or 11 weeks of paid employment. The precarity of these workers is compounded by policies (in all but two states) which make school support staff ineligible to collect unemployment insurance (UI) during the summer.

This report discusses the historical reasons for this exclusion and emphasizes that state policies could and should change to help support school staff in the summer.

In 2023, Minnesota passed a law to make school support staff eligible for unemployment insurance during their summer breaks, becoming the first state in the nation to enact this as a permanent measure for all school support staff. EPI originally estimated that the law would provide $28 million in benefits to workers in 2021 (Wolfe and Kamper 2021), just over $32 million in 2023 dollars.1 The data collected by the state of Minnesota show that, during the summer of 2023, this law provided $38.6 million in much-needed wage replacement for school support staff (MDE 2024).

If the other 49 states and D.C. enacted such legislation with a benefit utilization similar to Minnesota’s, the total wages paid to school support staff nationwide would be roughly $1.2 billion—a meaningful supplement to these vital workers’ earnings, yet a relatively trivial cost to the public. Such a policy would help school districts recruit and retain these essential staff and provide critical support to these low-paid workers and their families.

The school support staff workforce

Support staff work across the school system and are vital to every aspect of its work. The first school employee many students see in the morning and last one they see at the end of the day is their school bus driver. Their classrooms, bathrooms, locker rooms, hallways, and gymnasiums are cleaned by custodians—who often also maintain boilers and HVAC systems. In the classroom, teachers are assisted by a panoply of support staff—some specialize in helping students with disabilities or English-language learners, though today’s teacher assistants perform myriad roles, including providing child care before and after school. At lunchtime, support staff are the food service workers who make sure students get a nutritious meal. And when students go to the office, the clerical and administrative personnel they see are most likely school support staff.

Figure A

Our analysis of this workforce includes five occupation groups that make up the K–12 education support workforce: food service workers; janitors and custodians; paraprofessionals (teacher assistants and child care workers); school bus drivers; and non-supervisory office and administration workers.2 It also includes both public and private school employees. Figure A shows that in 2022, there were more than 2.3 million K–12 education support workers in the United States. Roughly a quarter (24.8%) of all K–12 education workers are support staff, with the largest occupational group being paraprofessionals, which in turn is mostly composed of teacher assistants.

Figure B

As is common in education and the public sector, the school support workforce is dominated by women workers. Figure B shows that, while women constitute 47% of the overall workforce, they represent the largest share of all education support occupation groups if we exclude janitors and custodians. Women make up very large shares of education food service (92.8%), office and administration (96.4%), and paraprofessional (86.2%) workers.

Figure C

Figure C shows that school support staff are disproportionately Black and brown workers. While Black workers make up 11.3% of the nation’s workforce as a whole and represent 10.9% of the overall K–12 education workforce (including teachers and administrators), they constitute 15.1% of food service workers; 14.9% of custodial employees; and 17.9% of school bus drivers. Hispanic workers represent 18.6% of the U.S. workforce, but they make up 20.3% of paraprofessional and 26.1% of custodial employees. Like Black workers, Hispanic workers in K–12 education are more likely to be support staff than teachers or administrators.

One reason that Black and women workers are concentrated in these education support occupations can be traced to the public sector’s history of leading the private sector in the fight against sex- and race-based discrimination. Most K–12 education jobs are in public education, and although discrimination in the public sector still exists, equal opportunity and affirmative action programs in the public sector have historically created greater employment opportunities for Black workers and women (Cooper, Gable, and Austin 2012).

Support staff positions are not well paid

Despite being critical positions to the success of the country’s education system, K–12 support staff jobs tend to not be paid well. None of these jobs pays near the U.S. median wage of $23.93 per hour.3 Paraprofessionals—by far the largest group of school support staff—have a median wage of $17.73 per hour, and food service workers make just $15.36 per hour. The median hourly wage for the highest-paid school support staff workers—clerical and administrative staff—is just 84% of the national median wage (Figure D).

Low wages mean that many support staff workers do not have economic security. EPI’s Family Budget Calculator (FBC) describes the income needed, in any county in the country, for families of different sizes to cover basic living expenses and have a modest standard of living. Even in a scenario where a worker has no children or other dependents to provide for, there is no county in the U.S. where a person could reach the family budget calculator’s modest, but secure income threshold with the median wages of an education food service worker. While the median wages for clerical and administrative staff are higher, these workers still cannot access economic security in more than half (52%) of the 3,143 counties in the FBC database (Gould, Mokhiber, and deCourcy).

Figure D

These cost-of-living estimates assume that a worker is working full time and year-round, which is not the case for most education support workers. Many of these workers do not have employment from their school during the summer months and work fewer weeks than the typical worker. Figure E shows that janitors are the only support occupation to work more weeks than the U.S. average. Food service workers, paraprofessionals, and school bus drivers all typically work 44 weeks or less a year, around a month less than the average U.S. worker.

Figure E

Even during the school year many tend to work less than 40 hours per week. Bus drivers and food service workers, for example, average less than 33 hours per week. So it isn’t surprising that while just 4.5% of all U.S. workers have more than one job, 11.4% of public school bus drivers, 10.6% of teaching assistants, 7.1% of school custodians, and 6.1% of food service staff hold multiple jobs (Cooper and Martinez Hickey 2022).

Figure F

Since many education support workers work fewer than 40 hours per week at their primary job, their weekly earnings are lower than their hourly rates suggest. Figure F shows that the weekly wages of school clerical and administrative staff are just 76% the weekly wages of the median U.S. worker. School bus drivers and food service workers, meanwhile, earn less than 61% of the median U.S. worker’s weekly wages.

Figure G

Due to their low wages and limited annual work time, support staff workers earn much less in annual wages and salary income than the typical U.S. worker and other education workers.4 Figure G shows that the median annual earnings of food service workers ($21,337) and paraprofessionals ($24,496) are less than half of the earnings of the typical U.S. worker. School bus drivers earn just slightly more than half (55.1%) of what the median worker does. While janitors and office staff work more weeks per year and earn more annually, they still earn just 70% of the median worker’s earnings.

Low earnings for these professionals bars them from achieving economic security. Figure H shows that food service workers (5.9%), paraprofessionals (6.2%), and bus drivers (6.4%) are more likely to be poor than the typical U.S. worker (4.6%).

Figure H

Given these low wages, it is small wonder that since the pandemic, school districts have had a difficult time recruiting and retaining school support staff. Figure I shows that all categories of school support staff jobs have seen slower job growth than the country’s labor force as a whole. Some of the most poorly compensated positions—such as food service workers, janitors, and school bus drivers—have seen the largest percentage declines in employment since before the pandemic.5

Figure I

Recruiting more workers to these critical education roles will require increasing compensation. In addition to increasing pay for these workers, another policy that could help attract and retain school support staff is providing them a source of income in the summer, by making them eligible for unemployment benefits during their summer breaks. By extending unemployment benefits to these workers and treating them like seasonal employees in other industries, school districts can help retain existing workers and recruit new professionals to fill the employment gap (NELP 2015).

The exclusion of school support staff from unemployment insurance

How workers qualify for unemployment insurance

As its name implies, unemployment insurance is a form of social insurance, mandated by the federal government but administered by states. It is designed to replace a worker’s lost wages when that worker becomes unemployed for reasons other than a discharge for misconduct. In addition to supporting individual workers, UI is a macroeconomic stabilizer which protects the entire economy during economic downturns (Banerjee and Bivens 2021). To qualify for UI, a worker must have worked a sufficient number of hours and/or earned a sufficient amount in wages. The specific requirements vary greatly by state, but are low enough that most workers qualify (DOL 2023).6

To receive benefits, a worker must be able to work, available to work, and actively seeking work. There are considerable state variants, many with significantly more onerous requirements than others, but all states require workers to be seeking work to receive benefits. While opponents of such benefits frequently claim that UI allows workers to stay home and collect benefits instead of working, an individual will lose eligibility for benefits if they refuse a job offer of “suitable” work while unemployed or if they stop seeking a new job (Fields-White et al. 2020).

The value of UI benefits is decided by states, and the differences among states are quite significant. For example, the maximum weekly benefit in Mississippi is just $235, but it can be as high as $1,522 in Massachusetts. In general, benefits replace about 40% of a worker’s pre-separation wages (Sawo and Sherer 2022). In most cases, workers cannot receive benefits for more than 26 weeks a year, but in some states it can be as little as 12 weeks (CBPP 2024). Workers are responsible for initiating the process of obtaining UI funds, and the process can be difficult for many. The share of unemployed workers who actually receive UI benefits is known as the recipiency rate; nationally, this rate is 29% (DOL-ETA 2024). Historically, younger people, workers with lower educational attainment, and racial and ethnic minorities have tended to have lower recipiency rates than other workers (Forsythe and Yang 2022).

Workers excluded from UI benefits

When the United States’ modern unemployment system was enacted as part of the Social Security Act of 1935, it was consciously “built to serve white, male, full-time workers” (Traub and Diehl 2022). Key groups of workers were excluded from unemployment insurance, including domestic and agricultural laborers. This was largely because of the political maneuvers required for President Roosevelt to win the votes of racist Southern lawmakers in Congress, as domestic and agricultural workers in the South were disproportionately likely to be Black. Most public employees were also excluded until the 1970s.

Because the unemployment insurance system is managed at the state level, eligibility rules vary for seasonal and temporary workers in industries like construction and commercial fishing. Many seasonal workers are eligible for unemployment insurance during their off-seasons in some states, even if they expect to be hired back on in the next year.

For public educational institutions, there is an added burden that must be met to be eligible for benefits, known as “lacking reasonable assurance.” Most school districts do not have regular classes in the summer, or for one to two weeks at the end of the calendar year. As such, many school employees are not working—and not earning wages—during those times. However, if the employee has a “reasonable assurance” that they will be returning to work when those breaks are over, they are likely ineligible for UI benefits. Only if they do not have that reasonable assurance (if they were permanently laid off, for example) can they claim UI.

Instructional and administrative staff (teachers, principals, etc.) are barred by federal law from receiving unemployment insurance during those break times. This law is absolute and cannot be changed by states. Two separate federal commissions examining unemployment laws, one in 1980 and one in 1996, recommended repealing this prohibition on school employees being eligible for unemployment insurance (NCUC 1980, ADUC 1996). The 1980 report described the exclusion of school employees as “discriminatory,” and urged repeal in the belief that the additional cost to schools would be minimal. Despite these recommendations, the prohibition on instructional staff receiving unemployment between school years remains.

However, federal unemployment law does not prohibit, and has never prohibited, states from extending unemployment insurance to noninstructional school support staff in the summer, even if those staff have a reasonable assurance they will be still working for the school district in the fall. However, it is not the default; states need to make a positive choice to extend UI benefits to these workers. To date, states have not enacted these policies except in a few instances:

• Illinois allowed school support staff to claim unemployment during the summer of 2020 as part of the state’s response to the pandemic (Wolfe and Kamper 2021).
• Oregon allowed janitorial, custodial, and facilities staff to receive summer unemployment starting in 2019, and has gradually expanded this benefit so that, in the summer of 2024, all school support staff will be eligible to receive UI (OSEA 2024).
• While California does not make school support staff eligible for unemployment insurance in the summer, it does allow school districts to participate in a deferred compensation plan whereby staff can have deductions from their paychecks matched by state funding and then paid out to them over the summer (State of California n.d.).

Minnesota expands eligibility to K–12 support staff

In 2023, Minnesota enacted House File 2497, which changed the law for school support staff.7 It removed the “reasonable assurance” requirement for “the period between two successive academic years,” that is to say, the summer. It applied to all school employees employed in “other than instructional, research, or principal” work.8

Under the law, all nonlicensed school support staff working in any public or charter school district would be eligible to receive unemployment if they did not work over the summer or if their hours were reduced over the summer. They would still, like all other applicants for UI, be required to look for work and to accept suitable offers of employment. It put school support staff on the same footing as seasonal workers who already collect UI.

Utilization of Minnesota’s new policy

Part of the new law required the Minnesota Department of Education to produce a report, showing how much school districts actually paid out in UI benefits to school support staff during the summer of 2023.

Paraprofessional employees were by far the most numerous of the UI recipients. While they represent just 57.6% of the school support staff Minnesota, they accounted for 68.3% of all UI expenditures by school districts (Table 1). On the opposite end, janitors and custodians make up 12.3% of MN school support staff, but less than 1% of the $38.6 million was paid out to them. While school bus drivers constitute a much smaller share of the recipients overall, they were the most likely of all the job categories to receive benefits.

Table 1

Program costs

Most private-sector employers pay for their employees’ potential UI benefits via payroll taxes. An employer’s UI taxes vary based on how often their workers end up utilizing the UI system; the more frequently an employer lays off workers, the higher the UI tax amount they will be required to pay. Those taxes go into the state’s unemployment insurance trust fund, which pays out benefits.

Public employers—including school districts—are generally “reimbursable employers,” meaning they do not pay UI taxes. Instead, they must reimburse the state’s unemployment insurance trust fund for the total costs of any benefits that employer pays out. Because public employers pay the full cost of any benefits paid out to public sector workers, they do not pay UI taxes, and the UI taxes of private sector employers are not used to pay for benefits to public employees. As such, the extension of UI benefits to school support staff does not endanger the solvency of a state’s UI trust fund and will not result in increased taxes on businesses.

A key question that arose during discussions about the Minnesota bill was how much in benefits would flow to workers, and therefore how much it would cost school districts. Because this benefit had never been enacted before in Minnesota, there was great uncertainty over three interrelated questions:

1. How many school support staff do not work for their school district for some period of time over the summer?
2. How many of those workers already have other summer employment (and would thus be ineligible for UI benefits)?
3. What is known as the recipiency rate—what share of workers who are laid off apply for and receive UI benefits?

A fiscal analysis conducted by state legislative staff was based on the presumption that all school support staff workers in the state would be eligible for, and would receive, UI benefits for the entire summer. This analysis was not a prediction for how it would be used; rather, it was an attempt to quantify the maximum feasible liability school districts could face. This analysis suggested that school districts would pay out $137 million in benefits the first summer it was in operation (Steel 2023). A sum of $135 million was appropriated to school districts to cover their costs for the first year of operation, in order to ensure that school districts would be held harmless even if 100% of their support staff collected UI benefits for the whole summer.

In a 2021 analysis (Wolfe and Kamper) and subsequent testimony to the Minnesota legislature (Kamper 2023), EPI drew on data from Illinois, which in the summer of 2020 extended UI benefits to school support staff and made the utilization data available to EPI. Based on the Illinois evidence, EPI estimated that the true net outlay would be closer to $30 million.

EPI’s analysis ended up being very close to the actual total of $38.6 million. Now that further empirical data is available, states considering extending UI benefit to school support staff in the summer should not make Minnesota’s assumption of 100% utilization, but should instead use Minnesota’s actual experience as a guide to estimating the impact in their own state.

Projecting costs for similar programs in other states

Data reported by the Minnesota Department of Education (MDE) provide real-world insight into the utilization of unemployment insurance benefits during summer months and serve as the foundation of our 50-state cost projection. We combine UI expenditures reported by the MDE with state-level data on employment and wages across the five occupational groups that make up the K–12 education support workforce.9 Additionally, we incorporate unemployment insurance replacement ratios provided by state workforce agencies and the U.S. Department of Labor. Our analysis assumes that workers in other states will have similar UI benefit take-up rates as workers in Minnesota. See Methodology for more detail.

If programs were designed similarly and take-up by other states’ nonlicensed school staff were the same as in Minnesota, we would expect to see what is represented in Figure J.

Figure J

In total, if all 50 states and the District of Columbia enacted legislation giving school support staff access to unemployment benefits during the summer, these workers would receive more than $1.2 billion each year, a substantial amount that could provide these workers with greater economic security. That amounts to just 0.15% of the total amount the U.S. as a whole spends on public K–12 education each year (NCES 2023). As shown in Figure J, the program cost as a share of public education spending across states ranges from 0.06% (D.C.) to 0.46% (North Dakota).

Conclusion

Staff in K–12 education provide a vital public service, helping to educate, support, and care for the country’s children. They often work in public education out of a desire to serve and though they may not be money-driven, they should not be asked to live in precarity and economic hardship because of their desire to serve the public good. Forgoing income for three months in the summer or being forced to find a second job can put considerable strain on a workforce that is already very low-income.

Moreover, some K–12 support staff may end up finding that their second jobs—originally intended as a bridge until school resumes—are more financially secure options for their year-round employment, exacerbating turnover and staffing shortages already acute in many school districts. In current labor market conditions of low unemployment, workers— especially in low-wage jobs—are finding it easier and easier to move to better jobs with higher pay and better working conditions (Gould 2024). Recent data suggest that only a handful of states have seen student achievement return to or exceed pre-pandemic levels (Fahle et al. 2024). Schools need a full complement of teachers and support staff to meet the needs of students.

Expanding UI access to school support staff in the summer will increase compensation for workers who already receive low pay and would relieve the hardships they face in the summer when they may not have any income. This will positively impact both recruitment and retention for these jobs, as well as raising pay for a workforce that is disproportionately composed of Black, brown, and women workers. States should enact this policy for their own good, as well as the good of their workers and students.

Methodology

EPI uses data from the Occupational Employment and Wage Statistics survey, the Department of Labor Employment and Training Administration, and reported program expenditures from the Minnesota Department of Education to estimate the cost of expanding unemployment insurance to school support staff during the summer months for all 50 states. 

Data sources 

Our estimates of unemployment insurance expenditures by occupation and state draw upon three primary data sources: 

1. Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) survey: The OEWS survey, jointly conducted by BLS and state workforce agencies, provides data on employment levels and wage rates for 830 occupational categories. This survey covers around 1.1 million establishments, representing about 80 million individuals. 
2. U.S. Department of Labor, Employment and Training Administration (DOL-ETA) unemployment insurance data: The 2023 unemployment insurance replacement ratios reported by state agencies to DOL-ETA. 
3. Minnesota Department of Education unemployment insurance costs report: Unemployment insurance expenditures reported by school districts and other local educational agencies to the MDE broken down by major occupational group. 

Definitions 

Average weekly benefit amount (AWBA): The average weekly unemployment insurance benefits paid to workers under a state program. Calculated by dividing the total benefits paid to individuals under a state program (benefits paid) by the total weeks claimed for which UI benefits are paid (weeks compensated). 

Full-time equivalent worker (FTE): Conversion of a worker’s usual job hours, based on their hourly wage, to the equivalent of a standard 40-hour work week. 

Replacement rate/ratio: The ratio of a UI claimants’ weekly benefit amount (WBA) to the claimants’ average weekly wage. 

Assessing the cost of Minnesota’s summer UI program 

Data reported by the Minnesota Department of Education serve as the foundation of our 50-state cost projections. These expenditures give us real-world insight into the utilization of unemployment insurance benefits by school support staff. In the MDE’s report on the summer unemployment insurance program, expenses are broken down by the following occupational categories:

• Paraprofessionals; 

• Food services; 

• Transportation; 

• Clerical; 

• Operations and maintenance; and

• All other expenditures.10 

Wage data and occupation counts for our UI expenditure analysis come from the May 2023 OEWS estimates for North American Industry Classification System (NAICS) Sector 611000 – Elementary and Secondary schools (including private, state, and local government schools). These data provide estimates of employment counts, mean hourly wages, and mean annual wages by state and Standard Occupational Classification (SOC) code. The MDE report only includes expense totals for the occupation groups listed previously, so we use the OEWS to estimate the employment counts of workers in each category. To match the OEWS data with the expenditure categories reported by the MDE, we create the SOC groups shown in Table 2. We chose to change the names of some of the categories in the MDE report to clearly indicate the workers in those categories. Therefore, “Transportation” becomes “Bus drivers,” “Clerical” becomes “Office and administration,” and “Operations and maintenance” becomes “Janitors and custodians.” 

Table 2

State workforce agencies report replacement ratios for workers who collect UI benefits. This measure is the ratio of a worker’s weekly benefit amount compared with their average weekly wage. Our analysis uses the 2023 replacement ratios by state collected by DOL-ETA as an input to estimate the amount of UI benefits a worker might be paid. 

Since the replacement ratios are based on weekly wages, we use the OEWS to estimate weekly wages for education support workers. The OEWS does not report weekly wages, so we use the estimates of hourly and annual wages. If hourly wage data are available for an individual occupation-state, we multiply the average hourly wage by the national average weekly hours worked for that occupation group. Weekly hours worked data come from analysis of 2021–2023 pooled Current Population Survey (CPS) microdata. For some occupations in the OEWS data, only annual wage data are reported. For these occupations, we divide the mean annual wage by a national estimate of the yearly weeks worked for that occupation group. Annual weeks worked data come from analysis of 2019, 2021, and 2022 American Community Survey (ACS) microdata.

After estimating the weekly wages for the individual occupations in each state, we calculate the weekly wage for each occupation group by averaging the wage data of all individual occupations within a group. This average is weighted by the employment count for each SOC occupation. 

We return to the expenditure data from Minnesota’s report with more detail about the number of support staff, their wages, and the state’s unemployment insurance replacement ratio. Multiplying the weekly wage rates for each occupation group in Minnesota by the state UI replacement rate estimates the average UI benefit a nonlicensed education worker might collect. We then divide the reported expenditure for each occupational category by the estimated weekly benefit for each occupational category. This results in the total weeks of UI claimed by each occupational category in Minnesota. We assume that each worker claiming UI does so for 11 weeks during the summer break. Dividing the total weeks of UI claimed by each occupational category by 11 produces the FTE number of employees in each occupational category who received UI. The FTE number of employees is then divided by the OEWS number of total workers in each occupational category, estimating the share of workers in each occupational category who received UI benefits in Minnesota (Table 1).

Projecting costs for similar programs in other states 

Next, we estimate summer UI benefits for education workers for all states and D.C., using Minnesota as a model. We assume that the share of workers in each state receiving summer UI across occupational categories will reflect what was observed in Minnesota. For each state, the share of each occupational category who will receive UI is multiplied by the OEWS occupational category employment total to produce the FTE number of workers receiving UI. We use the OEWS weekly wage data and DOL UI replacement rates for each state to estimate the weekly UI benefit for an employee in each occupational category in each state. We multiply the number of FTE workers by the weekly UI benefit by 11 to calculate the total UI expenditure for each occupational category. Summing up the total of each occupational category in each state results in the total UI expenditure for each state (Figure J). 

Notes

1. Authors’ calculation using the Consumer Price Index for All Urban Consumers (CPI-U).

2. A full list of the occupations included in each group can be found in Table 2.

3. Pooled 2022–2023 Current Population Survey Outgoing Rotation Group microdata from the Bureau of Labor Statistics, in 2023 dollars.

4. The public education workforce is largely composed of teachers, principals, and other administrators with higher credentialing than the overall workforce. Despite this high level of educational attainment, public school teachers experience a stark pay penalty compared with their similarly educated peers in other professions (Allegretto 2023).

5. Low wages are not the only issue burdening education support workers. The COVID-19 pandemic was particularly difficult for these workers, who are older than the overall U.S. workforce. While 31.6% of all U.S. workers are over the age of 50, the percentage is higher for teaching assistants (40.5%), custodians (55.4%), and school bus drivers (66.2%). Their older age means that these workers were more vulnerable to the effects of COVID-19, which contributed to significant numbers of education support staff workers leaving the industry and/or being reluctant to return. Since the return to in-person schooling, some support workers such as bus drivers have also reported increased confrontations with students and parents (Edmonds 2023).

6. Workers classified as independent contractors are also excluded from UI benefits. The abuse of the independent contractor classification is rampant and results in many workers—such as so-called “gig workers” and many platform-based workers—being denied benefits for which they would be eligible if they were correctly classified as regular employees. See Schmitt et al. (2023) for more detail.

7. The “reasonable assurance” standard also applies to staff in public higher education facilities. Illinois’ 2020 bill did include higher education, but neither Minnesota nor Oregon included higher education in their statutes.

8. House File 2497, Regular Session, Minnesota, 2023.

9. Employment and wage data come from the Occupational Employment and Wage Statistics survey from the U.S. Bureau of Labor Statistics. A full list of the occupations in each occupation group can be found in Appendix Table 1.

10. In the Minnesota report, “All other expenditures” accounts for 5.5% of total expenses. We do not include this category in our estimate of UI costs.

References

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Allegretto, Sylvia A. 2023. Teacher Pay Penalty Still Looms Large. Economic Policy Institute, September 2023.

Bureau of Labor Statistics (BLS). 2024. “Occupational Employment and Wages—May 2023” (news release). April 3, 2024.

Center on Budget and Policy Priorities (CBPP). 2024. “How Many Weeks of Unemployment Compensation Are Available?“ Policy Basics, April 29, 2024.

Cooper, David, Mary Gable, and Algernon Austin. 2012. The Public-Sector Jobs Crisis. Economic Policy Institute, May 2012.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools is Critical to Solving Staffing Shortages. Economic Policy Institute, February 2022.

Department of Labor (DOL). 2023. Comparison of State Unemployment Insurance Laws. 2023.

Department of Labor, Employment and Training Administration (DOL-ETA). 2024. “Recipiency Rates, By State, 2023,” Unemployment Insurance Chartbook. Accessed April 24, 2024.

Economic Policy Institute (EPI). 2024. Current Population Survey Extracts, Version 1.0.54, https://microdata.epi.org.

Edmonds, Colbi. 2023. “The Shortage in School Bus Drivers Is Getting Worse.” New York Times, August 17, 2023.

Fahle, Erin, Thomas J. Kane, Sean F. Reardon, and Douglas O. Staiger. 2024. The First Year of Pandemic Recovery: A District-Level Analysis. Harvard Center for Education Policy Research, January 2024.

Fields-White, Monée, Vivian Graubard, Alberto Rodriguez, Nikki Zeichner, and Cassandra Robertson. 2020. Unpacking Inequities in Unemployment Insurance. New America, September 2020.

Forsythe, Eliza, and Hesong Yang. 2022. Understanding Disparities in Unemployment Insurance Recipiency. Washington Center for Equitable Growth, July 2022.

Gould, Elise. 2024. “‘Unchanged’, ‘changed little’, and ‘little changed’ appears at total of 13 times in this morning’s #JOLTS release out of @BLS_gov for December.” Twitter, @eliselgould, January 30, 2024, 9:18 a.m.

Gould, Elise, Zane Mokhiber, and Katherine deCourcy. 2024. “What Constitutes a Living Wage: A Guide to Using EPI’s Family Budget Calculator.” Economic Policy Institute, January 31, 2024

Kamper, Dave. 2023. Testimony before the Minnesota House Education Finance Committee, St. Paul, MN, February 7, 2023.

Minnesota Department of Education (MDE). 2024. Unemployment Insurance Reimbursement Aid. January 2024.

National Center for Education Statistics (NCES). 2023. “Current Expenditures for Public Elementary and Secondary Education, by State or Jurisdiction: Selected School Years, 1969-70 Through 2020-21” [Table 236.25], Digest of Education Statistics. Published April 2023.

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National Employment Law Project (NELP). 2015. Seasonal Work and Occupational Exclusions Overview. October 2015.

Oregon School Employees Association (OSEA). 2023. “Legislative Victory! Unemployment Access for All Begins January 2024” (news release). Accessed January 24, 2024.

Sawo, Marokey, and Jennifer Sherer. 2022. “Strong and Equitable Unemployment Insurance Systems Require Broadening the UI Tax Base.” Working Economics Blog (Economic Policy Institute), May 2, 2022.

Schmitt, John, Heidi Shierholz, Margaret Poydock, and Samantha Sanders. 2023. The Economic Costs of Worker Misclassification. Economic Policy Institute, January 2023

State of California. n.d. “Classified School Employees Summer Assistance” (web page). Accessed January 10, 2024.

Steel, Keya. 2023. Consolidated Fiscal Note. Saint Paul, MN, Minnesota Legislature, 2023.

Traub, Amy, and Kim Diehl. 2022. “Reforming Unemployment Insurance Is a Racial Justice Imperative.” National Employment Law Project, February 2022.

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Wolfe, Julia, and Dave Kamper. 2021. “Illinois Extended Unemployment Benefits to School Workers in the Summer, and Minnesota Should Follow Suit.” Working Economics Blog (Economic Policy Institute), May 12, 2021.

Appendix

Appendix Table 1

This is the first of two reports on older workers’ responses to the American Working Conditions Survey (RAND Corporation 2015, 2018). This report focuses on six categories of working conditions that are considered onerous or dangerous for workers, and that may be even more so for older workers:

• Physical demands, such as moving heavy loads or people (Figure A)
• Environmental hazards or burdens, such as exposure to chemicals or infectious materials (Figure B)
• Difficult schedules, such as shift work or last-minute scheduling (Figure C)
• High pressure, such as working to tight deadlines or at very high speeds (Figure D)
• Low control over work decisions, such as the order of tasks or timing of breaks (Figure E)
• Adverse social interactions, such as threats or violence (Figure F)

The analysis in this report suggests that roughly half of older workers ages 50–70 experience each of these categories of difficult working conditions, with the exception of adverse social interactions (which affect less than 15% of older workers). The average older worker experiences 2.6 of these categories.

Quantifying the large share of older workers with difficult jobs serves as a reality check for policymakers and researchers who view later retirement as an easy way for workers to close retirement income gaps.

A second EPI report will focus on how well, or how poorly, employers are meeting the needs of older workers in terms of job satisfaction, hours, pay and benefits, future job prospects, and preparing for retirement. The second report is intended to help inform discussions around older worker recruitment and retention at a time when workers age 50 and older make up a third of the workforce, the highest share on record, yet were disproportionately likely to exit during the pandemic.1

Both reports are companions to the Older Workers and Retirement Chartbook, a joint project of the Economic Policy Institute and the Schwartz Center for Economic Policy Analysis (Morrissey, Radpour, and Schuster 2022). Among other things, the chartbook documents that 31.6% of workers ages 55­–64 and 24.1% of workers age 65 and older have physically demanding jobs.2 The current report builds on these findings using a different survey (the American Working Conditions Survey) and a broader array of working conditions.

Background and related research

It has been extensively documented that the life expectancy of lower-paid, blue-collar, or non-college-educated workers is shorter than that of higher-paid, white-collar, or college-educated workers, and that these gaps have widened in recent decades.3 Some of these gaps reflect physical demands and workplace hazards that many lower-paid workers are exposed to. Workplace stressors such as poor work-life balance and a lack of autonomy are also more widespread among lower-paid workers and are linked to poor health, disability, and premature death. However, lack of access to medical care, behavioral risks such as smoking, and other factors correlated with low socioeconomic status also negatively affect health, making it challenging to isolate the effects of difficult working conditions.4

This report builds on earlier research documenting working conditions experienced by older workers, including reports from the Center for Economic and Policy Research (CEPR) that link older workers’ occupations with physically demanding and onerous working conditions documented in the Occupational Information Network (O*NET) (Rho 2010; Bucknor and Baker 2016). CEPR’s 2016 study, focusing on a somewhat older age group than this report, found that 34.5% of workers age 58 and older had physically demanding jobs; 22.1% of these older workers had jobs with difficult working conditions; and 43.8% had jobs that met one or both of these criteria in 2014. Though the metrics in the current report are not directly comparable with those in the CEPR reports, they corroborate the CEPR findings that many older workers have onerous or hazardous jobs.

Some workers do leave physically demanding jobs as they get older, either transitioning to less physical jobs or leaving the workforce entirely, often due to poor health. Thus, for example, between 2003 and 2018, there was a small decline in the number of construction laborers among the 1954–1968 birth cohort despite rapid growth in that occupation. As a result, workers ages 50–64 in 2018 made up 20.6% of that occupation, less than their 26.9% share of the workforce.5

This is not true of all physically demanding occupations, however. Between 2003 and 2018, the number of personal and home care aides more than doubled among the 1954–1968 birth cohort. While this also reflects a rapid growth in that occupation, prime-age workers ages 35–49 were slightly underrepresented in this occupation in 2003, while older workers ages 50–64 were slightly overrepresented in 2018, making up 30.8% of the occupation and 26.9% of the overall workforce.

A related occupation—nursing, psychiatric, and home health aides—was also slightly overrepresented among workers ages 50–64 in 2018 (28.2% vs. 26.9%).6 These aides—overwhelmingly women, workers of color, and immigrants—perform essential work for extremely low pay that does not compensate for the risks they face (Dorman and Boden 2021; Robertson, Sawo, and Cooper 2022). Home health aides, for example, are at high risk of overexertion and falling injuries because their job often involves moving patients without assistance or proper equipment (AIHA 2021).

How do older workers’ jobs compare with prime-age workers’ jobs?

With many more years of experience, we might expect older workers to have better jobs than prime-age workers—and they do, on average. However, the differences are smaller than might be expected, and many older workers remain in difficult jobs.

As is discussed in more detail later in this report, older workers ages 50–70 are less likely than prime-age workers ages 35–49 to have demanding schedules, work under high pressure, or experience adverse social interactions. Older workers are also less likely than prime-age workers to have physically demanding jobs or be exposed to uncomfortable or hazardous environments; however, these differences are often small and statistically insignificant. Older workers are about as likely as prime-age workers to have little control over work decisions, which can contribute to stress and poor health.

Of the six categories of difficult working conditions discussed in this report, older workers experience on average 2.6 of them, while prime-age workers experience 3.1.

Any advantages enjoyed by older workers stem from the fact that some workers move to better jobs as they gain skills and experience, while workers in poor health or with bad jobs are more likely to exit the workforce. In addition, some older workers consider themselves semi-retired but transition to easier, often part-time, “bridge” jobs. Though older workers may be less likely than prime-age workers to have physically taxing or hazardous jobs, difficult working conditions combined with declining health put older workers at greater risk for serious injuries.

How do older U.S. workers fare compared with older European workers?

Throughout this report, we share data on working conditions faced by older European workers as a point of comparison.

By some measures, older European workers appear to have less physically demanding jobs and less demanding schedules than their U.S. counterparts. They are about as likely as older U.S. workers to be exposed to potentially hazardous environmental conditions, have high-pressure jobs, or experience adverse social interactions. They appear more likely than older U.S. workers to say they have little control over their work.

These comparisons should be approached with caution, though, because the European survey was fielded three years before the U.S. survey, covers a somewhat wider age range, and does not include all the questions from the U.S. survey selected for this report. (See the technical note.)

Half of older workers have physically demanding jobs

As shown in Figure A, half (50.3%) of older workers engage in at least one physical activity that can lead to injury. These include carrying or moving heavy loads, lifting or moving people, or working in tiring or painful positions at least a quarter of the time. Prime-age workers are more likely to engage in these activities (55.5%), but the difference between the two age groups is fairly small.

Figure A

More older workers might be considered to have physically demanding jobs if we included those who stand all or almost all the time at work, but this question was not included in the 2018 American Working Conditions Survey. In 2015, 29.3% of older workers had jobs that entailed standing all or almost all the time. Including these workers, 56.2% of older workers had physically demanding jobs in 2015, whereas the share of older workers in physically demanding jobs was 50.3% in 2015 if standing is not included.7

Older European workers are less likely than older U.S. workers to have jobs that involve carrying heavy loads (29% vs. 36.1%) or lifting or moving people (9% vs. 15.6%). However, older European workers are more likely than older U.S. workers to say they work in tiring or painful positions (43% vs. 36.9%).8

Moving heavy loads or people and working in tiring or painful positions takes a toll on workers’ musculoskeletal systems over time, especially if actions are done repeatedly and in awkward positions. Musculoskeletal disorders are the largest category of Social Security Disability Insurance awards among adults (SSA 2022, Chart 6). Workers in physically demanding occupations also face greater accident risk (Abdalla et al. 2017).

More than half of older workers are exposed to negative environmental conditions

As shown in Figure B, over half of older workers (54.2%) are exposed to at least one unpleasant, unhealthy, or potentially hazardous condition in their physical work environment at least a quarter of the time, about the same share as prime-age workers (55.0%). Older workers are less likely than prime-age workers to breathe secondhand tobacco smoke, handle chemicals, breathe vapors, be exposed to loud noise, or be exposed to vibrations. They are more likely to be exposed to low temperatures. Differences in exposure to infectious materials, smoke and fumes, or high temperatures are not statistically significant.

Figure B

By most measures, older European and U.S. workers are about equally likely to be exposed to potentially harmful physical environments: 13% of older European workers handle infectious materials (compared with 15.6% of older U.S. workers); 7% breathe secondhand tobacco smoke (vs. 6.7%); 17% handle chemical products (vs. 16.9%); 10% breathe vapors (vs. 10.9%); 15% breathe fumes, powder, or dust (vs. 13.9%); 26% are exposed to loud noise (vs. 27.4%); and 19% handle vibrating tools or machinery (vs. 16.4%). None of these differences are statistically significant. Older European workers are, however, less likely to be exposed to low temperatures (22% compared with 32.3%) or high temperatures (23% vs. 35.8%).9

Unfortunately, the American Working Conditions Survey does not ask about working conditions that increase the risk of many types of accidents, such as falls. Workplace hazards interact with health factors such as worsening vision, hearing, reflexes, and balance to increase the risk of accidents that put many older workers in grave danger. Older workers also suffer more serious consequences than younger workers from incidents such as falls and are overrepresented in some dangerous occupations, such as farming (CPWR et al. 2009; National Research Council and Institute of Medicine 2004; Smith and Pegula 2020).

Even if older workers face less hazardous working conditions than other workers, these hazards can have more serious repercussions for older workers. For example, while older workers may be less likely than other workers to be killed falling from heights, presumably because they are less likely to work in construction trades and other occupations in which the risk of these injuries is elevated, they are more likely to be killed from falls on the same level (Rogers and Wiatrowski 2005).

Because older workers tend to suffer more serious injuries than younger workers from similar incidents, workers 65 and older are more than twice as likely as workers as a whole to suffer fatal workplace injuries: 8.4 deaths per 100,000 full-time-equivalent (FTE) workers versus an average of 3.6 deaths per 100,000 FTE workers overall in 2021 (BLS 2022). Workers ages 55–64 have the next-highest fatality rate (4.6 deaths per 100,000 FTE workers).

Based on a measure that tracks occupational injuries and illnesses resulting in days away from work, nonfatal occupational injury and illness rates declined across age groups between 2011 and 2019 before spiking in 2020 due to the pandemic. However, the decline was steeper for younger workers than for older workers, who in earlier years typically had fewer—albeit more serious—nonfatal injuries and illnesses (BLS 2023a; Rogers and Wiatrowski 2005; CDC 2011). In 2019, injury and illness rates for workers ages 45–54, 55–64, and 65 and older were 98.3, 109.1, and 98.3 injuries or illnesses per 10,000 full-time-equivalent workers, respectively, compared with an overall average rate of 94.8 (BLS 2023a). These injuries and illnesses also resulted in more time off work: The median number of days lost from a nonfatal work injury or illness was 12, 14, and 15 days for workers ages 45–54, 55–64, and 65 and older, respectively, compared with an overall median of 9 days (BLS 2023b).

The Bureau of Labor Statistics does not track fatal occupational illnesses. However, the available evidence suggests that health vulnerabilities and occupational exposure appear to have made the COVID-19 pandemic especially deadly for some older workers. While some occupations with high COVID-19 mortality rates—such as food preparation and serving occupations—employ relatively young workers, other occupations have high mortality rates due to a combination of age and exposure risk factors. These doubly dangerous occupations are: building and grounds cleaning and maintenance; community and social services; installation, maintenance, and repair; and production occupations (a broad category that includes most manufacturing and food processing occupations).10

Another indication that older workers have been especially vulnerable during the pandemic is that total nonfatal illness and injury rates increased nearly as fast between 2019 and 2020 for workers ages 45–54 (31.9%) and ages 55–64 (30.6%) as the overall average (34.2%) (BLS 2023a). Since much or all of the increased incidence was probably due to the pandemic, these estimates can serve as a rough indicator of the likelihood of COVID-19 exposure. Since overall COVID-19 mortality rates for older age groups are up to 25 times11 that of the 18–29 age group that serves as a reference, these older workers likely died at greater rates from COVID-19 exposure on the job (CDC 2023). Though nonfatal illness and injury rates increased more slowly between 2019 and 2020 for workers 65 and older (9.7%) than for other workers (BLS 2023a), likely due to a jump in retirements among older workers in occupations characterized by high physical proximity to others (Davis 2021), the COVID-19 mortality rate for people age 65 and older is at least 65 times that of people ages 18–29 (CDC 2023).

Half of older workers have difficult schedules

As shown in Figure C, half of older workers (53.7%) and two-thirds of prime-age workers (66.1%) report at least one indicator of a difficult or precarious work schedule. Fewer older workers than prime-age workers say that poor work-life balance causes their work to interfere with family or social commitments; that their employer engages in last-minute (day-before or same-day) scheduling; that they usually work 48 or more hours per week at their main job; that they worked at night at least once in the past month; or that they work shifts.12

Figure C

Older European workers appear to have less demanding schedules than their U.S. counterparts, with 16% reporting night work (compared with 24.5% of older U.S. workers) and 16% reporting shift work (vs. 26.5%).13 Older European workers are also less likely to have worked at least one 10+ hour day in the past month (31% vs. 52.5%) (indicator not shown in Figure C).

Studies have found links between long hours, shift work, poor work-life balance, and poor health (Goh, Pfeffer, and Zenios 2015). Irregular schedules common in the service sector are associated with psychological distress, poor sleep, work-family conflict, and economic insecurity among older workers (Abrams, Harknett, and Schneider 2022). For workers paid by the hour, irregular schedules not only affect work-life balance but also make incomes unpredictable and contribute to stress, poor sleep, and other negative health outcomes (Harknett and Schneider 2020). Last-minute scheduling exacerbates the uncertainty of irregular hours and makes it difficult for workers to take on other work.

Night shift work is also harmful to workers’ health. It is linked to risk factors for heart disease, diabetes, stroke, and other serious health problems (Cheng et al. 2021), compounding health risks that increase with age. Though the American Working Conditions Survey does not differentiate between overnight shifts and earlier shifts or evening work, 7.9% of older workers and 10.8% of prime-age workers report both working nights and working shifts (not shown in Figure C).

Nearly half of older workers have high-pressure jobs

As shown in Figure D, nearly half of older workers (46.1%) have at least one indicator of a high-pressure job, though this share is less than the share of prime-age workers who report the same (63.6%). Fewer older workers than prime-age workers say they deal with frequent negative disruptions, that they usually do not have enough time to finish their work, that they work to tight deadlines all or almost all the time, or that they work at very high speeds all or almost all the time.

Figure D

Older European workers are about as likely as older U.S. workers to report frequent negative disruptions (15% vs. 17.8%); to work to tight deadlines all or almost all the time (24% vs. 27.0%); or to work at very high speeds all or almost all the time (19% vs. 19.1%). None of these differences are statistically significant. Older European workers are more likely than older U.S. workers to say that they usually do not have enough time to finish their work (26% vs. 19.7%).

High-pressure jobs are “risk multipliers,” to quote a report on the high injury and illness rates experienced by Amazon warehouse workers (Berkowitz and Athena Coalition 2020; Greene and Alcantara 2021). Amazon warehouse workers trying to meet demanding quotas were among the older workers whose on-the-job injuries are vividly described in the book Nomadland (Bruder 2017). Amazon delivery drivers also suffer high injury rates linked to high-pressure delivery quotas (SOC 2022). Meat processing, which employs many older workers, is another industry in which speed has been linked to high injury rates (Gremillion and Berkowitz 2019; Human Rights Watch 2019; GAO 2016).

Nearly half of older workers have limited control over their work

As shown in Figure E, nearly half of older workers (45.9%) report at least one indicator of low job control, a share not significantly different from that of prime-age workers (47.9%). Older workers are somewhat less likely to say they lack control over break times or work speed and somewhat more likely to say they lack control over work methods. For other indicators, differences between the two age groups are not statistically significant.

Figure E

Older European workers appear to have less autonomy than older U.S. workers: 28% say they rarely or never choose break times, compared with 17.6% of older U.S. workers; 24% (vs. 18.0%) say they rarely or never influence decisions important to their work; 25% (vs. 19.0%) say they have no choice in work speed; 27% (vs. 25.2%) say they have no choice in work methods; and 29% (vs. 23.0%) say they have no choice in the order of tasks.

In a discussion about how long it is reasonable to expect workers to continue working at older ages, autonomy may seem less important than, say, risk of injury. However, a positive association between job control and health has been documented since the influential “Whitehall” studies of British civil servants in the 1970s.14 Though it is not surprising that higher-status workers (who tend to have more control over their work) are also healthier than lower-status workers (who tend to have less control), there is some evidence that the relationship between job control and health is causal and not simply a function of socioeconomic status. However, the relationship may vary by type of worker (blue-collar or white-collar) and other factors, such as whether a low-control job is also highly demanding.

Many older workers experience adverse social interactions at work

Older workers are less likely than prime-age workers to be on the receiving end of abusive and violent behavior (14.1% vs. 24.4%), though many still endure bullying, humiliation, threats, and verbal abuse on the job. As shown in Figure F, older workers are less likely than prime-age workers to say that they endured sexual harassment or bullying in the past 12 months or that they endured threats, unwanted sexual attention, or verbal abuse in the past month. Differences between the two age groups in exposure to physical violence in the past 12 months or humiliating behavior in the past month are not statistically significant.

Figure F

European workers age 50 and older and U.S. workers ages 50–70 are about equally likely to be subject to any of these adverse social interactions (13% vs. 14.1%).

When we look at data on injuries intentionally inflicted on workers that are serious enough to result in days away from work, we see that workplace violence has been a growing problem in recent years. These injuries increased from 2.8 per 10,000 full-time-equivalent workers in 2011 to 3.6 per 10,000 FTE workers in 2019. The rate of intentional injuries dipped to 3.3 per 10,000 FTE workers in 2020, likely due to increased remote work during the COVID-19 pandemic. Rates for older workers also trended up during the 2011–2019 period, though older workers are generally less likely to be the targets of violence. In the last pre-pandemic year (2019), intentional injury rates for workers ages 45–54, 55–64, and 65+ were 3.2, 3.1, and 2.0 per 10,000 FTE workers, respectively, as compared with an overall average of 3.6 per 10,000 FTE workers (BLS 2023c).

The Bureau of Labor Statistics has only been tracking intentional injuries since 2011. Another measure of nonfatal workplace violence, based on a survey of crime victims and not limited to incidents resulting in missed work, suggests that workplace violence was more prevalent in the mid-1990s than it is today but shows a recent increase (Harrell et al. 2022, Figure 4.1). Workplace homicides were also higher in the mid-1990s and, unlike nonfatal attacks, have been relatively flat in recent years. Homicides accounted for 8–10% of fatal occupational injuries in 2011–2019 (BLS 2023c; Harrell et al. 2022, Figure 1.2).

Among broad occupation groups, medical, mental health, law enforcement, and security occupations suffer the highest rates of violent injury (Harrell et al. 2022, Table 5.2). Specific occupations that are often targeted and employ an older workforce include doctors, nurses, mental health practitioners and social workers, special education teachers, bus drivers, and taxi drivers.15

News reports suggest that the pandemic and social divisions may have intensified abuse aimed at workers, especially in medical settings. However, there is limited survey data on abuses that stop short of physical violence, and data for the pandemic years is just now starting to become available.

Discussion

In comparing reporting of working conditions between prime-age and older workers, it can be useful to keep in mind that these reflect differences between generations as well as changes workers experience over the course of their working lives. Generational and age differences, as well as cultural and societal differences between workers in the United States and in Europe, may also influence how these different groups experience similar working conditions. In other words, what one worker might find burdensome another might see as normal.

For example, in Albania, few workers report being exposed to adverse social behaviors such as verbal abuse, bullying, threats, or sexual harassment, according to the European Working Conditions Survey. In contrast, such negative social interactions appear common in the Netherlands, a far wealthier country (Parent-Thirion et al. 2017, Figure 51). Other surveys corroborate the finding that workers in high-income countries are more likely to say that they experience violence or harassment (ILO 2022). It is possible that Dutch coworkers or clients are more abusive than their Albanian counterparts. It is also possible that Albanian workers have fewer social interactions at work, that Albanian workers experiencing abuse are more reluctant to answer honestly or to complete the survey, or that some behavior that Albanian workers consider simply annoying Dutch workers consider abusive. More than one explanation could be true.

Differences in reporting can also reflect individual tastes. For example, some workers may enjoy the physical or mental challenges of a particular occupation, while others may find such work onerous.

In addition, some measures used in this report may not always be reliable indicators of difficult jobs even without subjective responses. For example, a grocery store cashier may have regular union-negotiated breaks and friendly coworkers who can cover in case of emergency. A delivery driver, on the other hand, may have difficulty taking rest breaks because of intense time pressure, but can decide for herself the timing of quick bathroom breaks based on access to facilities. In these scenarios, the grocery cashier has better working conditions when it comes to breaks and probably feels more in control at work than the harried delivery driver, but only the grocery cashier would be considered to have “low control” based on her inability to choose the timing of breaks. In other words, some measures of “low control” may reflect rules put in place to protect workers and ensure fairness, which might partly explain why older European workers, who are more likely to be represented by a union or similar body than older U.S. workers, are more likely to say they lack input on work-related decisions.16

Just as the timing of breaks may be an imperfect measure of job control, the connection between job control and well-being is also complicated. Nevertheless, low control and other aspects of work that can be gleaned from the American Working Conditions Survey can provide us with a more complete picture of the challenges facing older workers than focusing narrowly on physical demands and health-related work limitations. Some types of difficult working conditions may be imperfectly measured or poorly understood but are more harmful to workers than more easily quantifiable or better-known risks. It is likely, for example, that shift work and stress associated with police work have more of an impact on police officers’ life expectancy than the dangers normally associated with this occupation (Violanti et al. 2013; Ma et al. 2014).

Conclusion

By some measures, older workers are somewhat less exposed to physical risks and stressors than prime-age workers, consistent with the idea that some workers with difficult jobs, such as construction laborers, either transition to easier jobs or leave the workforce as they age. However, differences between prime-age and older workers are generally small, and roughly half of older workers endure physical demands, environmental hazards or burdens, difficult schedules, high pressure, or low control over their work. One in 7 older workers experience physical or verbal abuse on the job. The average older worker experiences 2.6 categories of difficult working conditions.

Workers who exit the workforce early often do so before they are ready to retire. The Older Workers and Retirement Chartbook documents that most workers who retire before age 65 do so involuntarily, with retirement preceded by poor health or disability; by a layoff, business closure, or ownership change; or by changes in working conditions or compensation.17

Though older workers’ exposure to risk might be slightly lower than that of prime-age workers, the repercussions are often much more serious. This is certainly true of accidental injuries and illnesses such as COVID-19, which are much more likely to be fatal for older workers. However, it is likely also true of many stressors that affect health, such as working nights.

While some occupations are clearly more dangerous than others as measured by injury rates, the wear and tear associated with physical labor, the cumulative impact of exposure to toxic substances, and the effects of other difficult working conditions are not always well documented but may contribute more to disability and premature death than accidents, though it can be challenging to differentiate between the effects of working conditions and socioeconomic status.18

The takeaway is that it is misguided and unrealistic to expect older workers with onerous or hazardous jobs to keep working into advanced old age. A better way to close the retirement income gap is to support workers’ ability to be fully employed during their prime working years and ensure that all jobs come with benefits that lead to a secure retirement. Ways to support workers include pursuing full-employment macroeconomic policies, providing more support for workers with caregiving responsibilities, and expanding Social Security. All workers would also be helped by stronger health and safety protections.

Acknowledgments

The author would like to thank RRF Foundation for Aging for its generous support of this project, Jori Kandra for timely and helpful research assistance, and Krista Faries for excellent editing.

Notes

1. EPI analysis of Current Population Survey microdata (Flood et al. 2022).

2. Based on data from the Health and Retirement Study, with non-college, Black, and Hispanic workers at even greater risk (Morrissey, Radpour, and Schuster 2022, Figures 1C and 1D).

3. See, for example, Waldron 2007; Rutledge 2018; Society of Actuaries 2019; Deeg, De Tavernier, and de Breij 2021.

4. For discussion of these factors, see Landsbergis, Grzywacz, and LaMontagne 2014; Clougherty, Souza, and Cullen 2010; Goh, Pfeffer, and Zenios 2015; Lovejoy et al. 2021; Pebley et al. 2021.

5. Author’s analysis of Current Population Survey microdata (Flood et al. 2022).

6. Author’s analysis of Current Population Survey microdata (Flood et al. 2022).

7. Author’s analysis of RAND Corporation 2015 microdata.

8. Author’s analysis of RAND Corporation 2018 and Eurofound n.d.; European statistics not shown in Figure A.

9. Author’s analysis of RAND Corporation 2018 and Eurofound n.d.; European statistics not shown in Figure B.

10. Author’s analysis of Billock, Steege, and Miñino 2022, Figure 1, and Current Population Survey data (Flood et al. 2022).

11. CDC data report that the COVID mortality rate for 50- to 64-year-olds is 25 times the mortality rate for 18- to 29-year-olds; for 40- to 49-year-olds, it is 10 times the rate.

12. Though the survey did not define shift work, it is usually understood to mean round-the-clock work divided into two or three shifts, such that some work is done outside of daytime hours.

13. Author’s analysis of RAND Corporation 2018 and Eurofound n.d.; European statistics not shown in Figure C.

14. Studies looking at the relationship between job control and health include Bosma et al. 1997; Clougherty, Souza, and Cullen 2010; Goh, Pfeffer, and Zenios 2015; Orton et al. 2019.

15. Author’s analysis of Current Population Survey microdata (Flood et al. 2022) and Harrell et al. 2022, Table 5.1.

16. Author’s analysis of RAND Corporation 2018 and Eurofound n.d.

17. See Morrissey, Radpour, and Schuster, Figures 1F, 1G, 1H, and 1I.

18. Studies analyzing causes of disability and premature mortality include Hummer and Hernandez 2013; Sabbath et al. 2013; Sewdas et al. 2019; de Wind et al. 2020; Roy et al. 2020; Schram et al. 2021; Boot et al. 2022.

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At Christmas time last year, an 82-year-old Walmart cashier was finally able to retire after a viral TikTok video and GoFundMe campaign netted him over $100,000. A kind customer posted the TikTok video, saying, “I was astounded seeing this little older man still grinding working 8- to 9-hour shifts.”

Do these stories illustrate America’s retirement divide or are they oddities?

The evidence compiled in our recently released Older Workers and Retirement Chartbook suggests the former, though the story is complex and multilayered.

Once workers reach older ages, especially Black and brown workers, those who are not financially able to retire must accept low wages and poor working conditions because they know they have little chance of finding a better job, or any job at all, if they lose employment.

Because of this, for most of these workers, working longer does not prevent poverty in retirement, though it may postpone it for some time. Many are left with no choice other than claiming Social Security benefits early, leading to reduced Social Security benefits and increasing downward mobility and poverty in retirement. They have no way out.

The chartbook—produced by The New School’s Schwartz Center for Economic Policy Analysis and the Economic Policy Institute which documents an array of disparities in more than 30 charts—shines many spotlights on this grim reality. It provides evidence that millions are unable to retire due to financial stress while others are pushed into involuntary premature “retirement” even if they don’t have enough money to make ends meet.

Nearly half of older Americans are financially unready for retirement—many on the precipice of poverty. Most workers have little, if anything, in their retirement accounts; the median retirement account balance for Americans approaching retirement age is only $10,000. If nothing changes, older Americans may increasingly need to hope for random acts of kindness and GoFundMe pensions.

The two-way connection between bad jobs and retirement financial precarity

Over the past two decades, older workers have become an increasingly significant share of the labor force. In the economic recovery after the Great Recession of 2008–2009, four in 10 Americans ages 55 or older were in the labor force—the highest participation rate in half a century. As of 2020, these older workers made up 23.6% of the total U.S. workforce, the highest portion on record.

Why are so many older Americans unable to retire and so many working into old age to survive? For many, the answer isn’t “because they want to.” Even before the COVID-19 pandemic, more than 50% of low-income older households ages 55–64 were financially fragile—up dramatically from the 35% at risk in 1992. This measure of precarity, the chartbook explains, is based on their debt burdens, housing costs, and the savings they had available to access in an emergency.

Financial fragility is not random. When broken down by race and ethnicity, we see significant differences in precarity: 57.0% of older Black households and 50.7% of older Hispanic households were financially fragile, compared with 33.4% of older white households. “The connection between work and retirement insecurity is a two-way street. Bad jobs lead to bad retirements, but retirement insecurity also forces older workers to accept bad jobs,” the chartbook explains.

Factors like race and ethnicity, gender, education, sexual identity, and disability affect Americans’ socioeconomic status throughout their working life and these disparities tend to be magnified along the life cycle.

And making matters worse, older workers perform more physically taxing work than might be expected, and older Black and Hispanic workers are much more likely than white workers to have physically demanding jobs. 

Figure 2D

How job and labor market disparities hinder retirement access

Lack of access to retirement plans is one of the major causes of insufficient retirement assets among older workers and retirees. How many older Americans approaching retirement have a decent retirement plan? Far fewer than you might think.

Only 57% of older workers (ages 55–64) and 53% of prime-age workers (ages 25–54) participate in an employer-based retirement plan, and this share plunges to 25% for workers ages 65 and older. Lack of access is the biggest factor depressing worker participation in retirement plans.

Societal inequities appear in who has access to plans and who doesn’t. For example, one chart below (2F) shows that high-earning older workers are three times as likely as low-earning older workers to have access to a retirement plan. Likewise, older workers without a bachelor’s degree or more education are “much less likely than their college-educated peers to have access to and participate in a retirement plan,” another chart below (2C) shows. While seven in 10 workers ages 55–64 with a bachelor’s degree have a retirement plan, less than half (48.6%) of their counterparts without a bachelor’s degree have this opportunity. In short, the very workers who need greater retirement security after a lifetime of lower earnings are the people left out in the cold in old age.

Figure 2F

Figure 2C

Compared with other wealthy countries, the United States relies more on employers to voluntarily provide benefits to supplement Social Security, a patchwork retirement system that became even more frayed when private-sector employers began switching from traditional pensions to 401(k) plans in the 1980s—thus shifting most of the cost and all of the risk of these benefits onto workers. This happened around the same time that gradual cuts to Social Security benefits were enacted, a process that is still underway. Despite these cuts, Social Security remains by far the most important source of income for people ages 65 and older, with four in 10 seniors—one-fourth of whom are still working—relying on Social Security payments for at least half their income.

Many workers were not just losing access to secure retirement benefits, they were also losing access to good jobs. The erosion of labor standards and policies that hindered workers’ ability to collectively bargain for better wages and working conditions have left many older workers stuck in bad jobs with no path to retirement.

Policymakers must address this broken system in which half of older Americans are financially precarious. Expanding Social Security and supplementing it with a universal retirement plan must become a top policy priority, as must improving labor standards and workers’ rights. The economic and human costs of not repairing this fracturing world of older workers and retirement are immense and unacceptable. The Older Workers and Retirement Chartbook documents these urgent disparities posing immense challenges that policymakers must confront now.

On May 17 at 2:00 p.m. Eastern, EPI will host a virtual event that will shine a light on this problem and outline policy recommendations to alleviate the plight of older workers. Register here. 

The Older Workers and Retirement Chartbook shows the risks to retirement security and disparities in retirement preparedness, and explores the links between labor market challenges facing older workers and retirement insecurity.

Updated February 9, 2023

The Older Workers and Retirement Chartbook

• Introduction
• Chapter 1. Older workers
• Chapter 2. Retirement
• Chapter 3. Risk
• References

A joint project of EPI and the Schwartz Center for Economic Policy Analysis

Several themes emerge from our research:

The U.S. population is aging; at the same time, the labor force participation rate is increasing among older Americans. As a result of well-documented flaws in the U.S. retirement system, many older workers hope to continue working as long as possible to make ends meet. However, many face barriers to working longer and lack access to decent jobs with decent pay. Older workers who cannot afford to retire often face diminishing job quality and earnings as a result of loss of bargaining power.

The connection between work and retirement insecurity is a two-way street. Bad jobs lead to bad retirements, but retirement insecurity also forces older workers to accept bad jobs. Workers with the freedom to walk away from a bad job can negotiate better pay and working conditions with their existing or new employers, individually or as part of a union. In this way, they can strengthen the bargaining power of other workers as well.

Some workers are able to work longer to close the retirement income gap, but expecting workers to work longer is neither a fair nor a realistic solution to a broken retirement system. Some workers may benefit from delaying retirement to increase their savings and accrued benefits while shortening their retirement. But expecting workers to work into old age is neither a feasible nor an equitable solution to the retirement crisis. For one thing, the increase in life expectancy has been concentrated among higher earners with jobs that are less physically demanding. For another, Americans already work more, and longer, than workers in most peer countries.

Chapter 1

Older workers

Older workers face challenges linked to age discrimination, poor health, and other barriers to employment. Retirement insecurity also forces workers to stay in bad jobs. Targeted policies can help, but so can policies that improve working conditions for all workers. Go to the charts 

Chapter 2

Retirement

Relying on employers to offer retirement benefits has never served U.S. workers well, leaving roughly half of private-sector workers without coverage. Expanding Social Security is the simplest and most effective solution to the retirement crisis. Go to the charts

Chapter 3

Risk

Americans face increasing economic risks as they age, including risks associated with poor health, job loss, and financial market downturns. Social insurance programs help shield older workers and retirees from these risks but need to be expanded. Go to the charts

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Acknowledgments

Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis (SCEPA), envisioned and oversaw the development of the Older Workers and Retirement Chartbook. We are grateful for her insight and guidance.

We are also grateful for support from SCEPA’s Eva Conway, whose thoughtful management kept the project on track across organizations, and EPI’s editorial and production team, Lora Engdahl, Krista Faries, John Carlo Mandapat, Daniel Perez, and Eric Shansby. Authors’ analyses in some of the charts have benefited from previous work by SCEPA research associates Owen Davis and Jessica Forden.

We would like to thank RRF Foundation for Aging for its generous support of this project. We especially thank Naomi Stanhaus and Anne Posner for their constructive feedback throughout this project.

Many of our colleagues across organizations provided letters of support for this project at the grant proposal stage. Many also responded to a questionnaire and participated in a roundtable discussion, sharing their thoughts about the landscape of working at older ages and retirement security. We are indebted to these colleagues: Nancy J. Altman, Ismael Cid-Martinez, Peter A. Creticos, Dan Doonan, Mindy Feldbaum, Karen Friedman, Lindsay Goldman, Tracey Gronniger, Jeffrey Hayes, Maria Heidkamp, David C. John, Peter Kaldes, Aaron Keating, Kathleen Kennedy Townsend, Kristen Kiefer, Andrea Kuwik, Lori Lucas, Mona Masri, Amy Matsui, Edward A. Miller, Earl Millett, David S. Mitchell, Alicia H. Munnell, Jan Mutchler, Shaun O’Brien, Jim Palmieri, Marci Phillips, Maura Porcelli, Kathleen Romig, Jennifer Schramm, Amy Shannon, Shengwei Sun, Alayne Unterberger, Michele Varnhagen, Elaine Weiss, and Christian E. Weller.

Last but not least, we are grateful for the early support of the late Karen Ferguson, founder of the Pension Rights Center, who devoted her career to ensuring workers received the pension benefits they were entitled to and expanding access to secure benefits for all workers.

This chartbook was revised on February 9, 2023, with the addition of a new Chart 2H, the renumbering of subsequent charts in Chapter 2, and other minor changes.

]]> https://www.epi.org/publication/morrisey-jec-testimony-on-older-workers-and-the-labor-market/ Wed, 09 Feb 2022 15:00:41 +0000 https://www.epi.org/?post_type=publication&p=245420 Thank you, Chairman Beyer, Ranking Member Lee, and the distinguished members of the committee for inviting me to participate in this hearing. My name is Monique Morrissey and I am an economist at the Economic Policy Institute (EPI) in Washington, D.C. EPI is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-wage workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-wage workers, and assesses policies with respect to how well they further those goals.

My testimony addresses the following questions:

• How has the pandemic impacted older workers? What are some of the labor market exit and re-entry trends for older workers that we have observed over the past two years? How have they differed from pre-pandemic trends?
• What has the pandemic revealed as key gaps in the protections that older worker have in the labor market? What policies would improve the labor market experience of older workers?
• How has the experience of the pandemic differed among older workers, if we were to group them by age, sex, race, occupation, or socioeconomic status?

An atypical recession and recovery

The pandemic recession was unusual. Unlike most, it was not triggered by a financial crisis causing a drop in aggregate demand. Homeowners and 401(k) participants benefited from rising asset values, notwithstanding the recent drop in stock prices. The recession officially lasted two months in early 2020 before the economy rebounded, though employment remains nearly 3 million below the pre-pandemic peak—or 4.5 million factoring in population growth (EPI 2022).

Labor supply and demand were both affected by social distancing in response to the pandemic. Layoffs were concentrated in services such as leisure and hospitality, while health and safety concerns and caregiving responsibilities loomed large in workers’ decisions to leave the workforce.

Fear of contracting COVID—and workers contracting COVID—remain the biggest impediments to a full recovery. The Omicron variant caused a record spike in the number of workers sidelined by illness in January—3.6 million in total (BLS-CPS)—a fact obscured by revisions to earlier employment estimates that resulted in strong reported employment growth for January. Though employment has undoubtedly grown rapidly over the past year, the timing of these gains was revised in the January jobs report.1 The Omicron variant also caused 6.0 million workers to be sidelined in January because their employer lost business or closed (BLS 2022). Though infection rates are declining from their January peak, protecting workers from COVID with strong occupational safety and health standards remains an urgent priority for workers, their families, and the broader economy.

Female-dominated service occupations, including care work, saw large initial job losses. This is in contrast to typical recessions, where male-dominated durable goods manufacturing and construction are among the hardest hit as consumers and investors lose confidence and delay major purchases and investments. (Unless otherwise noted, statistics are based on my analysis of U.S. Census Bureau Current Population Survey microdata (Flood et al. 2021).)

As demand for goods has remained high in the pandemic while demand for services has suffered, global supply chain bottlenecks have reduced the supply of certain goods, driving up prices in the U.S. and other countries. While some workers are seeing overdue wage gains, there is no evidence of a wage-price spiral, as wage gains are concentrated in certain service industries, such as hospitality, while price inflation is concentrated in certain goods-producing industries, such as automobiles (Bivens 2021; Politano 2021).

The “Great Resignation” has received much attention, but so far appears to have mostly benefited younger, more mobile, workers. The Federal Reserve Bank of Atlanta’s Wage Growth Tracker, which tracks individual workers’ annual wage growth to strip out the effect of changes in the composition of the workforce, shows that only workers ages 16-24 have seen accelerated wage gains in the pandemic, while wages for workers ages 55 and older decelerated during much of the pandemic and continue to grow much more slowly than wages of prime-age (25-54) or younger (16-24) workers (Federal Reserve Bank of Atlanta 2022).

In the recession, workers ages 55 and older saw employment declines similar to those for prime-age workers ages 25-64. In most recessions, including the Great Recession, older workers are less likely than younger and prime-age workers to lose their jobs due to seniority. The unusually high employment decline for older workers in the pandemic happened even though older workers were less likely to be in occupations and industries most affected by the pandemic, such as leisure and hospitality. However, older workers face much greater health risks from COVID, so declines in employment for older workers were steeper in occupations characterized by high physical proximity to others (Davis 2021).

The robust federal response to the recession was also atypical. Adequate fiscal support, including relief checks and expanded unemployment benefits, brought about a strong and rapid recovery despite the pandemic’s persistence and global supply chain issues. This stands in sharp contrast to the slow recovery after the Great Recession, which caused lasting damage to vulnerable workers and their families, including many older workers. As a result of actions taken to shore up household finances and expand unemployment eligibility and benefits, low-wage workers were less likely to experience large income losses during the pandemic recession than before the pandemic (Larrimore, Mortenson, and Splinter 2021). However, most relief measures have ended and vulnerable workers, including unemployed older workers, face greater challenges ahead.

Employment rates for some age groups, but not older workers, are now approaching pre-pandemic rates. Employment rebounded more quickly among younger (16-24) and prime age (25-54) workers than older workers (55+), so until recently older workers accounted for a disproportionate share of the jobs gap. Older workers (55+) were 24% of the workforce in November and December of 2019 but accounted for 41% of missing jobs in November 2021 and 35% in December 2021 based on age-adjusted employment projections.2 However, January data shows that the employment rate for older workers is now 1.4 percentage points below the pre-pandemic rate, roughly the same as for prime-age and younger workers (BLS-CPS).

Which older workers were most affected?

Among older workers, women, non-college workers, workers of color, and part-time workers were more likely to lose their jobs or quit during the pandemic recession. Among workers ages 55 and older, employment in the recession fell by -12% for men versus -16% for women; by -28% for part-time workers versus -9% for full-time workers; by -17% for workers without bachelor’s degrees versus -8% for those with bachelor’s degrees; and by -15% for non-Hispanic Black workers, -17% for Hispanic workers, and -21% for Asian/other workers versus -12% for non-Hispanic white workers.

With some exceptions, vulnerable groups are still lagging behind. Despite a strong rebound in employment after April 2020, employment in December 2021 was further behind pre-pandemic levels for older women (-3%) than for older men (-1%); and for older Black non-Hispanic workers (-6%) than for older white non-Hispanic workers (-3%). However, employment of older Hispanic workers was slightly above pre-pandemic levels (+2%), and employment of older Asian/other workers was unchanged (0%). Employment of older workers without bachelor’s degrees remained significantly below pre-pandemic levels (-5%), while that of older workers with bachelor’s degrees slightly increased (+2%). These estimates do not account for changes in population size that vary by group nor for seasonal variations, though patterns appeared broadly similar in November.3

Part-time work accounts for most of the employment loss among older workers. Among older workers, part-time employment remained significantly below pre-pandemic levels in December (-8%), while full-time employment appeared essentially unchanged (0%). Though these measures are sensitive to seasonal and demographic changes, especially as the large Baby Boomer cohort aged into older ages where part-time work is more common, there is little doubt that part-time work accounts for most of the employment loss among older workers, especially those age 65 and older. Davis (2021) for example, estimated that part-time workers accounted for 70% of the increase in retirements in the first year of the pandemic.

Middle-aged workers ages 55 to 64 and workers ages 65 and older experienced the pandemic differently. Estimates for smaller sub-groups can be noisy and hard to pin down. However, it is clear that declines among the oldest subgroup, workers 65 years and older, account for most of the persistent employment losses. The oldest workers who left were more likely to be highly educated than their middle-aged counterparts and better prepared for retirement. Among middle-aged workers ages 55 to 64 who left the workforce, the most concerning are declines among workers without bachelor’s degrees (-6%) and Black non-Hispanic workers (-8%), since these workers are less likely to be able to retire early without experiencing hardship. Research on older workers who left the workforce in the first year of the pandemic also found significant differences by age and income sub-groups, with retirements concentrated among workers ages 70 and older, especially higher-income workers, while employment losses among middle-aged workers skewed toward lower-income workers (Davis 2021; Quinby, Rutledge and Wettstein 2021).

Unemployed older workers

Despite important differences with previous recessions, one usual pattern has held true: older workers who lost their jobs in the pandemic were likely to stay unemployed longer than their younger counterparts. In December 2021, 43% of unemployed older workers (ages 55+) were unemployed for 6 months or more compared with 30% of their younger counterparts (ages 16-54) (Schramm 2021).

Older workers who lose their jobs face greater earnings losses than their younger counterparts. These earnings losses stem from longer unemployment duration and the fact that new jobs for unemployed older workers often pay significantly less than their old ones due to the loss of employer-specific skills and age discrimination (Johnson and Gosselin 2018; Johnson and Mommaerts 2011).

Age discrimination in hiring is rampant. A study published by the Federal Reserve Bank of San Francisco found that employers were less likely to contact older fictitious job applicants (ages 64-66) than their middle-aged (49-51) or young (29-31) counterparts. Age discrimination was worse for women and unrelated to the physical demands of the job, as older women received roughly half as many callbacks for administrative positions as young women (Neumark, Burn, and Button 2017). Earlier studies have also found evidence of age discrimination (see, for example, Lahey 2007).

A multi-faceted approach is needed to combat discrimination. Better enforcement of the Age Discrimination in Employment Act is necessary but not sufficient given the difficulty job applicants have in demonstrating that they were rejected for age-related reasons. An Older Workers Bureau at the Department of Labor could be particularly useful in combating age discrimination in hiring based on mistaken assumptions about older job applicants, such as assuming that they are likely to retire soon.

Older unemployed workers especially benefited from measures taken during the pandemic to extend the duration of unemployment benefits, increase benefit amounts, and expand eligibility to workers who normally fall through cracks in the system. These temporary measures not only assisted vulnerable jobless workers and their families, they also helped the economy recover quickly (Bivens and Banerjee 2021). Despite federal aid, however, some states ended extended unemployment insurance (UI) early in response to unfounded complaints that generous unemployment benefits impeded employment growth (Dube 2021; Martinez Hickey and Cooper 2021; CBPP 2022). Before enactment of these temporary measures, 3 in 10 jobless workers did not meet states’ strict and outdated eligibility requirements, including many part-time workers and workers misclassified as contractors. Income replacement rates in many states are also abysmally low, another reason we need comprehensive UI reform (Bivens et al. 2021).

Extended benefits also help workers and the economy by improving job matching. Exploring differences in UI eligibility by state during the Great Recession, Farooq, Kugler and Muratori (2020) found that extended UI benefits allowed jobless workers to find higher-paying jobs that better matched their skills and training. The economy benefits when workers are matched to jobs that employ their skills rather than being forced to take the first available job. Low-road employers who are competitive only because they pay low wages and provide few benefits are enabled by workers’ inertia and poor knowledge of better options (Jäger et al. 2021).

Work sharing holds promise as an alternative to traditional unemployment benefits. Work sharing, also known as short-term compensation, encourages employers to reduce hours rather than lay off workers during recessions by providing benefits to compensate workers for lost wages (Herzenberg 2020). Though some states already had work sharing programs in place before the pandemic and temporary funding for work sharing was included in the CARES Act, many employers were not aware of this option, which has been successful in reducing layoffs in countries like Belgium and Germany. Maintaining employment relationships is especially important for older workers who face daunting challenges in being rehired after layoffs.

How concerned should we be about pandemic retirements?

Some excess retirements are less concerning than others. The impact on workers and their families depends on whether they are being pulled into retirement by rising net worth or pushed out of the workforce by layoffs or due to health and safety concerns. Davis (2021) found that excess pandemic retirements among 65- to 74-year-olds were concentrated among college-educated white workers who are likely better prepared than average for retirement, especially given gains in stock and housing values. On the other hand, employment declines among middle-aged workers ages 55 to 64 with lower earnings and less formal education are more concerning because these workers are not likely to be ready for retirement and are not yet eligible for Medicare and other benefits.

Many seniors who left the workforce were already semi-retired. Their decision to exit could reflect rising net worth, health and safety concerns, pandemic disruptions, or all the above. A semi-retired 70-year-old accountant with a few small business clients, for example, may have seen his 401(k) grow, his client list shrink, and his job made riskier by the pandemic. Many new retirees in the oldest age groups were likely receiving retirement benefits when they were working, partly explaining why we have not seen a parallel rise in Social Security take-up.

Other factors that could explain a puzzling dip in Social Security applications may include relief payments and expanded unemployment benefits keeping unemployed older workers in the labor force, and the effect of Social Security office closings. While Social Security office closings during the pandemic have undoubtedly affected take-up of disability benefits (Stein and Weaver 2021), a lifeline for workers in poor health, the impact of office closings on applications for retirement benefits is less clear. Anecdotal evidence suggests that office staff often encourage people to apply for retirement benefits even when it could be in their interest to delay and receive higher monthly payments. Applying online may make it more likely that would-be applicants encounter advice from AARP, the National Academy of Social Insurance, and other organizations encouraging seniors to consider delaying (Orman 2018; Bethell 2012).

Even in the case of workers who exit the workforce for reasons unrelated to rising asset prices, it does not necessarily follow that we should try to lure them back—at least not until we solve the problems that caused them to leave in the first place. Many left the paid workforce due to health issues or caregiving responsibilities. A Brookings study estimated that 1.6 million full-time-equivalent workers might be missing from the workforce due to lingering COVID effects (Bach 2022), which could account for a third or more of missing jobs.

Many sidelined workers, especially women, are caring for family members suffering from pandemic-related health problems and making up for staffing shortages among paid caregivers. Pandemic-related problems include patients with health issues other than COVID who delayed care or went without treatment due to COVID fears or staffing shortages. Health care employment is down by 378,000 jobs (-2.3%) from its level in February 2020 (BLS 2022), with nursing homes accounting for a disproportionate share of losses (AHCA/NCAL 2021). Chronic shortages in direct care occupations predated the pandemic and have only gotten worse (Espinoza 2017). Problems in this sector affect older workers who provide care to parents, spouses, and other loved ones, as well as older workers employed in these low-paid and often dangerous occupations.

The Build Back Better Act would greatly improve the lives of older workers and enable some of them to return to the workforce. Build Back Better includes significant funding for home and community-based services (HCBS) under Medicaid, helping people in poor health who prefer to live at home rather than in long-term care facilities and allowing some family caregivers to return to work. Build Back Better also creates a paid family and medical leave program to help family caregivers take time off to care for loved ones, and improves the pay and working conditions of paid caregivers, including through collective bargaining.

The United States is one of the few countries that does not guarantee access to paid sick leave. This is bad enough under normal circumstances, but it is especially problematic to force individuals to bear the cost of staying home to protect coworkers and the public in a pandemic—or worse yet, give them a choice between working sick or losing their jobs. Two-thirds of low-wage workers lack access to paid sick leave (Gould 2021), including many home health aides and other frontline workers who have seen high rates of COVID infection.

Impact on the economy

Just as we need to differentiate between older workers who can retire comfortably from those for whom exiting the workforce creates hardship, employment losses can have a greater or lesser impact on the economy depending on the worker, the job, and the state of the economy. A full-time worker who exits the workforce years before he or she expected to retire has a greater impact on the economy than the loss of a semi-retired part-time worker who planned to retire soon regardless. Likewise, early retirements have less of an impact in an economy suffering from inadequate demand, when retirements can open up jobs for unemployed younger workers. However, this is not the situation we are in now.

Early retirements affect a country’s productive capacity not just by reducing employment and work hours, but also from the loss of human capital. This is especially problematic when the affected workers are directly involved in caring for, educating, and protecting the current and future workforce and providing other critical services. We should therefore be very concerned about a wave of early retirements among educators, nurses, postal workers, and other public-sector workers.

K–12 schools and other local government employers have shed an alarming number of jobs in the pandemic. Employment in this sector, which skews toward older workers, had never fully recovered from the Great Recession. The pandemic exacerbated preexisting problems, including a dwindling teacher pipeline. Though job losses in this sector include quits and retirements in addition to the impact of school closings and other pandemic disruptions, the education exodus reflects worsening conditions in jobs that already paid little or, in the case of highly-educated teachers, were grossly underpaid compared to similar workers in the private sector (Cooper and Martinez Hickey 2022). The job losses in this critical sector occurred despite federal aid to state and local governments, some of which has not been spent wisely or not spent at all.

Conclusion

My testimony has focused on pandemic-related effects and policies, but many challenges facing older workers predate the pandemic and require long-term solutions. Though some of these, such as an Older Workers Bureau, are targeted at older workers, most policies that would help older workers would also help other vulnerable workers, such as raising the minimum wage, strengthening collective bargaining rights, guaranteeing paid leave, addressing unpredictable and involuntary part-time schedules, combating employer misclassification of workers as independent contractors, and other policies that support good jobs with decent pay and benefits (EPI 2018).

Notes

1. Revisions to employment estimates were due in part to adjusting population controls to reflect 900,000 COVID deaths, of which the vast majority were ages 55 and older. The U.S. Census Bureau resets population controls in the Current Population Survey once a year in January, which affects employment estimates for different age groups. These adjustments are not applied retroactively. Other survey-related challenges, including ambiguity in how workers sidelined by COVID are coded and higher non-response rates, have added to the noisiness of employment estimates during the pandemic.

2. Age adjustment is based on five-year age groups except for the youngest (ages 16–24) and oldest (ages 75+) groups. An important caveat is that population estimates in 2021 CPS data were not adjusted for high COVID mortality among older age groups, as noted in footnote 1. Population control adjustments were made in January 2022, but January microdata is not yet publicly available.

3. These estimates also do not reflect adjustments to population controls as noted in previous footnotes.

References

American Health Care Association and ​National Center for Assisted Living (AHCA/NCAL). 2021. Nursing Homes Down 221,000 Jobs Since Start of Pandemic. November 10, 2021.

Bach, Katie. 2022. Is ‘Long Covid’ Worsening the Labor Shortage? The Brookings Institution, January 11, 2022.

Bethell, Thomas N. 2012. “World’s Best Investment? Delaying Social Security.” National Academy of Social Insurance, April 2012.

Bivens, Josh. 2022. “U.S. Workers Have Already Been Disempowered in the Name of Fighting Inflation; Policymakers Should Not Make It Even Worse by Raising Interest Rates Too Aggressively.” Working Economics Blog (Economic Policy Institute), January 21, 2022.

Bivens, Josh, and Asha Banerjee. 2021. How to Boost Unemployment Insurance as a Macroeconomic Stabilizer—Lessons from the 2020 Pandemic Programs. Economic Policy Institute, October 12, 2021.

Bivens, Josh, Melissa Boteach, Rachel Deutsch, Francisco Diez, Rebecca Dixon, Brian Galle, Alix Gould-Werth, Nicole Marquez, Lily Roberts, Heidi Shierholz, and William Spriggs. 2021. Reforming Unemployment Insurance: Stabilizing a System in Crisis and Laying the Foundation for Equity. A joint report of the Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth. June 2021.

Bureau of Labor Statistics, Current Population Survey (BLS-CPS). Various years. Public data series accessed through Labor Force Statistics from the Current Population Survey online database. Accessed February 2022.

Bureau of Labor Statistics (BLS). 2022. “Employment Situation Summary” (news release). February 4, 2022.

Center on Budget and Policy Priorities (CBPP). 2022. Policy Basics: How Many Weeks of Unemployment Compensation Are Available? February 14, 2022.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools Is Critical to Solving Staffing Shortages; Federal Relief Funds Can Provide a Down Payment on Long-Needed Investments in the Education Workforce. Economic Policy Institute, February 3, 2022.

Davis, Owen. 2021 “Employment and Retirement Among Older Workers During the COVID-19 Pandemic.” Schwartz Center for Economic Policy Analysis and Department of Economics, The New School for Social Research, Working Paper Series 2021-6, December 7, 2021.

Dube, Arindrajit. 2022. “Aggregate Employment Effects of Unemployment Benefits During Deep Downturns: Evidence from the Expiration of the Federal Pandemic Unemployment Compensation.” National Bureau of Economic Research Working Paper 28470, February 2021.

Economic Policy Institute (EPI). 2018. Policy Agenda. December 5, 2018.

Economic Policy Institute (EPI). 2022. Jobs Report: Strong Job Growth Despite Omicron Shows the Strength of this Recovery. February 4, 2022.

Espinoza, Robert. 2017. 8 Signs the Shortage in Paid Caregivers Is Getting Worse. Paraprofessional Healthcare Institute, Inc., February 2, 2017.

Farooq, Ammar, Adriana D. Kugler & Umberto Muratori. 2020. “Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions.” National Bureau of Economic Research Working Paper 27574, July 2020.

Federal Reserve Board of Atlanta. 2022. “Wage Growth Tracker” [Excel File], Center for Human Capital Studies Data Tools, various years. Accessed February 2022.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren and Michael Westberry. 2021. Integrated Public Use Microdata Series, Current Population Survey: Version 9.0 [data set]. Minneapolis, Minn.: IPUMS, 2021.

Gould, Elise. 2021. “Two-Thirds of Low-Wage Workers Still Lack Access to Paid Sick Days During an Ongoing Pandemic.” Working Economics Blog (Economic Policy Institute), September 24, 2021.

Herzenberg, Stephen. 2020. “COVID-19 Relief Should Extend CARES Act Work-Sharing Provisions.” Working Economics Blog (Economic Policy Institute), December 7, 2020.

Jäger, Simon, Christopher Roth, Nina Roussille, and Benjamin Schoefer. 2021. “Worker Beliefs About Outside Options.” National Bureau of Economic Research Working Paper 29623, December 2021.

Johnson, Richard W. and Peter Gosselin. 2018. How Secure Is Employment at Older Ages? Urban Institute, December 28, 2018

Johnson, Richard W., and Corina Mommaerts. 2011. “Age Differences in Job Loss, Job Search, and Reemployment.” Urban Institute Program on Retirement Policy Discussion Paper 11–01, January 12, 2011.

Lahey, Joanna N. 2008. “Age, Women, and Hiring; an Experimental Study.” Journal of Human Resources 43.1: 30-56.

Larrimore, Jeff, Jacob Mortenson, and David Splinter. 2021. “Earnings Shocks and Stabilization During COVID-19.” Board of Governors of the Federal Reserve System Finance and Economics Discussion Series 2021-052, June 29, 2021.

Martinez Hickey, Sebastian, and David Cooper. Cutting Unemployment Insurance Benefits Did Not Boost Job Growth; July State Jobs Data Show a Widespread Recovery. Economic Policy Institute, August 24, 2021.

Neumark, David, Ian Burn, and Patrick Button, “Age Discrimination and Hiring of Older Workers.” Federal Reserve Bank of San Francisco Economic Letter, February 27, 2017.

Orman, Suze. 2018. “When It Comes to Social Security, 70 is the New 65!” AARP The Magazine, September 2018.

Politano, Joseph. 2022. “The Inflation Outlook: Diving into December’s CPI Numbers and their Implications for the Future.” Apricitas—an Econ Blog (Substack), January 12, 2022.

Quinby, Laura D., Matthew S. Rutledge, and Gal Wettstein. 2021. “How Has Covid-19 Affected the Labor Force Participation of Older Workers?” Center for Retirement Research at Boston College Working Paper 2021-13, October 2021.

Schramm, Jennifer. 2021. AARP/PPI Employment Data Digest. AARP Public Policy Institute, December 2021.

Stein, Jonathan and David A. Weaver. 2021. “Half a Million Poor and Disabled Americans Left Behind by Social Security,” The Hill, November 11, 2021.

]]> https://www.epi.org/publication/older-workers-were-devastated-by-the-pandemic-downturn-and-continue-to-face-adverse-employment-outcomes-epi-testimony-for-the-senate-special-committee-on-aging/ Thu, 29 Apr 2021 13:30:19 +0000 https://www.epi.org/?post_type=publication&p=226787 Testimony prepared for the Senate Special Committee on Aging hearing on “A Changing Workforce: Supporting Older Workers Amid the COVID-19 Pandemic and Beyond”

Elise Gould
Senior Economist
Economic Policy Institute 

Thank you, Chairman Casey, Ranking Member Scott, and members of the committee, for the invitation to participate in today’s important hearing on supporting older workers amid the COVID-19 pandemic and beyond. My name is Elise Gould, I am a senior economist at the Economic Policy Institute, a leading non-profit non-partisan think tank that analyzes the effects of U.S. economic policy on working families. Today I would like to outline the economic impacts of the COVID-19 pandemic on older workers, how it compares to the Great Recession, and how we can build a stronger, more equitable economy going forward.

In 2020, the U.S. economy took a hit like none other in recent history. Because the 2020 recession was driven by a highly unusual cause—the need to control the pandemic and keep people safe—its first-round impacts were far different than most previous recessions in terms of which sectors and workers were hit hardest and most durably. Workers across the economy, including older workers, experienced devastating job losses. 5.7 million workers 55 years old and older lost their jobs last spring—15% of total employment for this group—and remain over 2 million jobs short of their employment levels before the pandemic hit.

Labor market outcomes were far worse for older workers in this recession as compared to their experience in the Great Recession. In particular, employment losses were greater for older workers 55 years and older in the pandemic recession compared to the Great Recession while the oldest of workers (65 years and older) experienced employment gains in the Great Recession and losses in the pandemic recession. In particular, women ages 55 and older were met with a harsher economic reality in this recession than the prior one. One of the reasons the economic reality was bleaker for older workers is that they were less likely to be able to telework coming into the pandemic. They were also significantly harder hit by the pandemic itself and therefore may have left employment in greater numbers because of concerns over their own health. The economy requires continued assistance from policymakers to ensure that the economy comes back strong, and the recovery provides greater economic security and opportunity for all workers, regardless of age, race/ethnicity, gender, and educational attainment.

The U.S. economy faced devastating job losses in the pandemic recession and continues to face a significant employment shortfall

At the beginning of the coronavirus pandemic, the U.S. economy experienced losses in March and April of 1.7 million and 20.7 million jobs, respectively, losses the likes of which we hadn’t experienced in modern history. Figure A shows the monthly changes in payroll employment between January 2020 and March 2021. The labor market saw a significant bounce back in May and June with 2.8 million and 4.8 million jobs added, respectively. Unfortunately, over the remainder of 2020, job growth rapidly slowed as vital federal relief expired and the virus surged. Then, employment fell outright in December 2020, a loss of 306,000 jobs.

A solid 916,000 jobs were added in March, the strongest job growth we’ve seen since the initial bounce back faded last summer. Even with these gains, the labor market is still down 8.4 million jobs from its pre-pandemic level in February 2020. In addition, thousands of jobs would have been added each month over the last year without the pandemic recession. If we count how many jobs may have been created if the recession hadn’t hit—consider average job growth (202,000) over the 12 months before the recession—we are now short 11.0 million jobs since February. Even at this pace, it could take more than a year to dig out of the total jobs shortfall.

Figure A

The latest jobs number is certainly a promising sign for the recovery, especially as vaccinations increase and vital provisions in the American Rescue Plan (ARP) have continued to ramp up since the March reference period to today’s data. While the benefits of the ARP will continue to be captured in coming months, more can be done to continue to keep the economic recovery on track, invest in the economic infrastructure, and surpass pre-pandemic benchmarks.

Millions of older workers lost their jobs in the COVID recession

Older workers were far from spared in the COVID recession. Figure B charts the monthly employment level for workers 55 years and older between January 2020 and March 2021. Between March and April 2020, 5.7 million workers ages 55 and up lost their jobs. This represents a loss of 15% of employment among older workers. As with workers overall, older workers experienced a bit of a rebound last summer, but unlike most other workers, older workers lost ground through the fall. March 2021 was the first month since October 2020 that older workers saw positive gains in employment. Even with that more promising gain of 308,000 jobs in March 2021, older workers are still down 2.1 million jobs since February 2020.

This understates the shortfall in employment for older workers because it simply calculates what it would take to return to the February 2020 labor market. A better measure would take into account the fact that the older population has grown significantly since then. The 55+ population has increased by more than 1.5 million since February 2020. Considering what the employment level could be given the February 2020 employment rate and recent population growth, older workers are facing a job shortfall of over 2.7 million jobs.

Figure B

Older workers lost employment in greater numbers in the COVID downturn than in the Great Recession

In the pandemic recession, older workers have faced a more challenging labor market than they experienced in the last labor market downturn, also referred to as the Great Recession. The official Great Recession followed the business cycle peak in 2007 and ended in 2009, though job losses continued into 2011. Therefore, the depth of the Great Recession is best measured by comparing 2007 with 2011. Figure C reports full year data on the share of the population with a job, also known as the employment-to-population ratio (EPOP), by age group, comparing changes in EPOPs in the Great Recession (2007-2011) with changes in the pandemic recession (2019-2020). Comparing full year data for 2019 with 2020 does not capture the full extent of the worst of the pandemic recession, but it provides a sense for how the year as a whole impacts employment across age groups.

The depth and length of the recession on employment rates was worse for young workers (16-24 years old) and prime-working-age workers (25-54 years old) in the Great Recession than in the pandemic recession. EPOPs fell by 7.7 percentage points for young workers in the Great Recession and by 5.3 percentage points in the pandemic recession. Prime-working-age workers experienced less of a difference between the recessions, but they did see a slightly larger fall in EPOPs in the former recession than the latter (4.8 ppt decline versus 4.3 ppt decline).

Figure C

Older workers, on the other hand, experienced far worse labor market outcomes in the pandemic recession than the Great Recession. Workers 55-64 years old experienced more mild employment losses in the prior recession and workers ages 65 and older experienced outright gains in the prior recession.1 Job losses may have been lighter among older workers in the former recession because of where the job losses occurred as well as the fact that older workers’ retirement income may have been more compromised during the financial crisis than during the COVID recession and therefore they may have remained in the labor force longer than they otherwise would have. In addition, in the current recession, older workers may have left employment for fear of the pandemic itself.

Figure D compares the employment rates of men and women older workers, separately. Older men ages 55+ experienced greater employment losses than women in the COVID downturn, but older women experienced a bigger difference in employment between the Great Recession and the COVID recession. In particular, men ages 55-64 only saw a mild difference in their losses between the Great Recession and the COVID recession (3.0 percentage point changes versus 3.5 percentage point change in their EPOPs). Women ages 55-64 saw a much larger drop in employment in the most recent recession, 3.1 percentage points versus 0.7 percentage points. This could be due in part to additional caregiving responsibilities for this cohort of older women. They may have left the labor force to care for elderly parents who left their nursing home or assisted living facility, other ill family members, or even grandchildren when the schools shuttered.

Both men and women ages 65 and older experienced a significant swing in employment between the Great Recession and the COVID downturn. In the earlier period, both men and women saw increases in employment, while in the latter period, both experienced significant losses.

Figure D

Older workers were harder hit by the pandemic itself and therefore may have employment in greater numbers because of concerns over their own health

The data over the last year have been conclusive that older workers are at higher risk for severe illness from COVID-19. Figure E shows the disproportionate death toll borne by the population 55 years old and older. The vast majority—93%—of the deaths from COVID-19 were among those 55 years old and older. Over a half a million deaths were attributed to this older population. It would be no surprise then that many older workers may have not only lost their jobs but opted out of the work force for fears of their own health and safety. This may be particularly true for older workers of color who have been hit harder from both the health and economic aspects of the pandemic.

Figure E

Unfortunately, older workers were less likely than many other age groups to be able to telework before the pandemic hit. Figure F shows the share of workers who were able to telework before the pandemic hit, by age group. Nearly three-fourths of workers ages 65 and older—or over 5 million older workers—are unable to telecommute. And over two-thirds of 55- to 64-year-olds cannot telework either; this represents another 15 million workers. That means that these workers, who are at higher risk for severe illness from COVID-19 because of their age, could be putting themselves at risk to earn a paycheck.

The latest data from the Bureau of Labor Statistics shows that only about one-fifth of the current workforce is teleworking. That means that nearly 80% of workers are physically going to work. Not only does that include many older workers, but it’s likely that millions of younger workers who cannot telework may be putting older family members at risk by going to work themselves.

Figure F

Congress has taken important steps to protect the health and economic well-being of workers and their families during the pandemic. However, in order for the economy to grow back quickly and stronger than before, policymakers should make sure the recovery hits all corners of the labor market. This means putting significant investments in policies that meet the pressing social needs the COVID-19 pandemic made so visible and that lead to greater economic security and opportunity for workers, including but not limited to, physical infrastructure, caregiving needs for young and old, paid leave, and expanded unemployment insurance.

Thank you and I look forward to your questions.

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Note

1. While the aging population—namely baby boomers reaching age 65 during the Great Recession—may be a factor in the employment increases for workers age 65+ in the Great Recession, an examination of the same data using smaller age groupings confirms that the labor market led to fewer job losses among this group and the outright gains were experienced among those 65-69, 70-74, and 75 and older when measured separately.

]]> https://www.epi.org/blog/older-workers-are-voting-with-an-eye-on-the-economy/ Tue, 03 Nov 2020 18:00:17 +0000 https://www.epi.org/?post_type=blog&p=214042 Recent polls have shown that older Americans and women appear to have turned against President Trump, and the reasons aren’t hard to grasp. The administration’s mishandling of the COVID-19 pandemic has been especially deadly for older Americans, while women have borne the brunt of the economic downturn, with greater job losses and caregiving responsibilities.

One factor has received less attention: Older Americans, too, have been hard hit in the economic downturn. Senior women (women ages 65 and older) have seen a steep decline in employment—almost as steep as that of young women just entering the labor force (see Table 1). Senior men also saw a steep decline in employment early in the pandemic but rebounded faster than senior women.

Table 1

Older workers approaching retirement—those ages 55–64—have fared better than seniors, but worse than in previous recessions, when their job losses tended to be small compared with those of younger workers. During the Great Recession, employment in this age group actually trended upward, though not as a share of the population, based on U.S. Census Bureau Current Population Survey data. This group still supports the president, but by a smaller margin than in 2016. These workers’ economic anxieties partly explain why Trump has lost Republicans’ usual advantage with voters on the handling of the economy, despite his attempts to claim credit for a pre-pandemic recovery that took off under the Obama administration.

The president seems to have been counting on stereotypical responses from older voters, who are supposed to be narrowly concerned with Social Security, Medicare, and the value of their 401(k)s. He appears to have taken their support for granted, messing with Social Security’s financing and assuming older workers would conflate a resilient stock market with a strong economy. Except for a few wealthy households, however, older Americans rely on earned income and Social Security more than investment returns and have good reason to be concerned about where the economy is headed. Older workers, for example, are overrepresented among small business and government employees, sectors that will languish without another stimulus and relief package that Senate Republicans have been holding up.

]]> https://www.epi.org/event/197204/ Thu, 28 May 2020 18:00:40 +0000 https://www.epi.org/?post_type=event&p=197204

The current public health and economic crisis has affected older people—especially older people of color and the elderly who are poor—in a disproportionate and unprecedented way. Their health, work, and savings are all at a higher risk of decline than other groups in the labor market.

Join the nation’s top experts on older workers, racism, and retirement for a discussion on the current state and possible fate of this often-overlooked subset of the American workforce.

Who: Teresa Ghilarducci, Labor Economist, ReLab at The New School (Moderator)
Kilolo Kijakazi, Institute Fellow, Urban Institute
Monique Morrissey, Economist, Economic Policy Institute
Richard Johnson, Senior Fellow, Urban Institute

What: A live webinar on the harsh economic effects COVID-19 is having on older workers.

When: Thursday, May 28
2:00 p.m.—3:00 p.m. ET / 11:00 a.m.—12:00 p.m. PT

Where: Zoom webinar

RSVP for the event

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EPI will be live-streaming this event on YouTube on May 28 starting at 2:00 p.m. ET  / 11:00 a.m PT. Just click on the video below at that time.

]]> https://www.epi.org/blog/a-coronavirus-recovery-how-to-ensure-older-workers-fully-participate/ Thu, 16 Apr 2020 21:28:18 +0000 https://www.epi.org/?post_type=blog&p=192179

Key takeaways:

• Because older workers are more likely to be unemployed for long periods, have work-limiting disabilities, and live in areas of the country that were struggling even before the crisis, policies aimed at addressing these problems will especially benefit these workers.
• While infrastructure spending could help jump-start the post-pandemic recovery, policies must ensure that older workers participate in training and jobs programs related to these investments.
• Regulatory protections for front-line workers, especially older workers and others at heightened risk for contracting or suffering serious consequences from contagious diseases, need to be strengthened and updated using lessons learned from the pandemic.
• Employer-provided benefits result in spotty coverage and higher costs for older workers. The United States should catch up to other countries and provide sick leave, paid family leave, and health insurance through government programs rather than leaving these to the discretion of employers.

(See the companion blog post outlining steps needed to protect vulnerable older workers in the economic collapse caused by measures needed to combat the COVID-19 pandemic.)

Once the worst of the outbreak is over and social distancing measures are relaxed, policies to help older workers will be needed to ensure they share in the recovery.

Deficit-financed stimulus spending—needed to quickly bring the economy back to something approaching full employment—will help but not ensure broad-based prosperity. Policymakers also need to address power imbalances between employers and workers and target policies at disadvantaged workers, including unemployed older workers.

Older workers, as I discussed in my last blog post, may find it harder to get back in the job market after layoffs for a number of reasons. They may have health conditions that limit what they can do or they may feel forced to accept large pay cuts because some skills and knowledge they’ve built up aren’t transferable and may be undervalued by prospective employers. Absent policies to help these workers regain their footing, they may become “discouraged workers” who give up on the job search and retire before they’re ready to.

This post lays out a series of policies to address barriers to employment for unemployed older workers and to protect older workers from health and financial risks.

Consider policies to encourage employers to hire long-term unemployed workers

Older workers who lose their jobs in a recession are more likely to be unemployed for long periods. For example, a study of unemployed workers in the Great Recession found that only a third (34%) of adults ages 62 and older who lost jobs were reemployed within 12 months and only two-fifths (41%) were reemployed within 18 months. On average, an older worker’s chance of reemployment each month was about half that of the average worker age 25 to 34.

Policies to encourage employers to hire long-term-unemployed workers must be carefully assessed to gauge their effectiveness and minimize the negative impact on other workers. For example, enacting the Long-Term Unemployment Elimination Act would provide time-limited funding to local workforce development boards and community-based organizations to employ workers who have been unemployed for six months or more, along with providing other employment supports. Importantly, it includes provisions to discourage employers from displacing existing workers or rotating eligible workers through the program.

Currently, the Work Opportunity Tax Credit provides a targeted employment subsidy worth up to $6,000 for one year to employers who hire workers who receive government benefits, are disabled veterans, were previously incarcerated, participate in Vocational Rehabilitation programs, or are long-term unemployed.

Ensure older workers have a role in infrastructure projects

Low interest rates, unmet needs, and bipartisan support make it likely that infrastructure spending will play a role in stimulating the post-pandemic recovery. A Green New Deal and other infrastructure measures could help jump-start the economy and address the even bigger threat to human life and the global economy posed by global warming. However, we need to ensure that workers of all ages are trained and employed for this work. As a quick start, boosting transit funding, especially for buses and accessible transportation, could have multiple benefits for older workers, who are more likely than younger workers to be employed in the transportation sector. (Unless otherwise noted, all references to older workers’ employment shares are based on the author’s analysis of 2015–2017 American Community Survey microdata for workers ages 55–64.)

Another low-tech but effective way to reduce reliance on fossil fuels is rehabbing older housing to make it more energy efficient. Barriers to making these ultimately cost-saving investments, especially for low-income and elderly homeowners, include upfront costs, lack of information, and an understandable reluctance to have a work crew in one’s home. Though construction projects tend to favor younger workers, outreach efforts to overcome these barriers in communities where declining industries have left behind an aging workforce and a dilapidated housing stock could employ many lower-income older workers.

Other forms of job training and public investment, such as universal pre-K, should also take older workers into account. Many older workers currently work as teachers’ aides, and more could be trained to work in preschools.

Better target aid to hard-hit regions

More effective and better-targeted regional economic policies would also benefit older workers, who are more likely to be employed in declining industries and live in economically depressed areas. Unemployed older workers are often less able to relocate to find work because of family commitments and community ties. Homeowners in depressed areas may also have difficulty relocating if the value of their home has declined relative to the outstanding balance on their mortgage. Eligibility for some benefits, such as extended Supplemental Nutrition Assistance Program (SNAP) and unemployment insurance benefits, is partly based on regional economic indicators. These benefits are well targeted and should be expanded. However, the Opportunity Zones tax break enacted in 2017 with the stated goal of encouraging investment in low-income areas mainly benefits wealthy investors and contributes to gentrification.

Expand EITC benefits for workers without dependent children

Another overdue policy reform that could help older workers in the recovery is expanding eligibility for the Earned Income Tax Credit. The EITC in its current form depresses the earnings of older workers competing for the same jobs as workers with dependent children who are the main beneficiaries of the program, because supplementing the incomes of some low-paid workers allows their employers to pay lower wages. We should expand EITC eligibility and benefits for workers without dependent children, while increasing the minimum wage to offset the implicit subsidy the EITC provides to low-wage employers.

We should also consider expanding and promoting the Senior Community Service Employment Program, which provides temporary subsidies for training and employing low-income older workers. This program appears to have at least modest success at promoting longer-term employment.

Institute fair-hiring policies for formerly incarcerated people reentering the labor market

Among those workers who will face the greatest hurdles to employment are formerly incarcerated older Americans. Some states and counties have suspended bail and released prisoners early in response to the pandemic, and U.S. Attorney General William Barr has announced that more federal prisoners will be eligible for home confinement. These initiatives urgently need to be replicated around the country, especially for older prisoners who pose no threat to society. However, formerly incarcerated people reentering the labor market, whether on schedule or early, are doing so at the worst possible time. In addition to ensuring that economic stimulus measures are timely and sufficient to restore a tight labor market, we should promote fair hiring for people with arrest or conviction records.

Enhance use and enforcement of federal worker safety protections

The pandemic has laid bare the weakness of worker health and safety protections in the United States. Under the Trump administration, the Occupational Safety and Health Administration (OSHA) has failed to use even the weak powers at its disposal, let alone instituted an Emergency Temporary Standard for Infectious Disease to protect front-line workers in the pandemic. Protections for older workers, whistleblowers, and others at heightened risk need to be strengthened and updated to take into account lessons learned from the pandemic.

Protect and expand disability insurance and other social insurance programs

The vulnerability of older workers with underlying conditions in the COVID-19 pandemic should also serve as a caution against reforms aimed at moving beneficiaries off disability rolls and into the workforce, as the Trump administration proposed in its 2021 budget (though how the administration intended to accomplish this was unclear). Reforms to move people off of disability rolls are especially ill-advised in a weak labor market. Instead, we should increase access to benefits while expanding supports for workers with disabilities who are able to remain in the workforce.

Strict eligibility standards and a lengthy and complicated application and appeals process make it difficult for workers to access Social Security Disability Insurance benefits. Though SSDI applications are likely to rise sharply as more workers with disabilities lose their jobs, acceptance rates typically drop in recessions due to an increase in marginal applicants. Applicants with less education, language barriers, and transportation challenges are especially disadvantaged by the complicated application and appeals process. These barriers to access have only increased in recent years, contributing to a sharp drop in take-up over the past decade.

Many older workers with disabilities don’t even bother trying to apply for SSDI and simply apply for reduced Social Security retirement benefits at the early eligibility age of 62. This is disadvantageous, since disability benefits at any age are based on retirement benefits at the normal retirement age (currently 66), not benefits reduced for early retirement. Importantly, disabled workers who may be eligible for either type of benefit and can’t afford to wait to see if their disability application is accepted should apply for both disability and retirement benefits simultaneously. Beneficiaries who weren’t aware of this option or who developed a disability after applying for retirement benefits can still apply for disability benefits after the fact. The permanent closing of some Social Security offices and temporary closing of all offices during the pandemic make it less likely that applicants will be made aware of this option or of the potential financial advantage of delaying take-up of retirement benefits.

Some economists and policymakers are concerned that disability benefits may reduce labor force participation. However, expanding government supports for workers who remain in the workforce and removing obstacles to accessing benefits can encourage employers to hire older workers by reducing employer costs associated with accommodating workers with disabilities and by helping workers who develop health conditions that interfere with work exit the workforce. Even if improving access to benefits has a net negative effect on labor force participation, disability insurance is generally welfare-improving because it helps relatively healthy people who want to work find jobs while forcing fewer people in poor health to try to keep working.

Generally speaking, expanding social insurance programs like SSDI will tend to promote the hiring of older workers. The United States is unusual among advanced economies in its reliance on employers to provide health benefits and paid leave. Older workers are more expensive to insure and more likely to take short-term disability leave due to cancer and other illnesses associated with age, though younger workers take more time off for injuries, mental illness, and family caregiving. Social insurance such as Medicare for All and paid family leave would remove the cost of health care and paid leave from employer hiring decisions as well as shield older workers from high out-of-pocket costs.

Social insurance has many potential advantages over employer-provided benefits, including spreading costs over lifetimes, pooling risk widely, reducing incentives to deny coverage or care, and taking advantage of economies of scale and government bargaining power to restrain costs. If there is not the political will for large-scale expansions of social insurance such as Medicare for All in the aftermath of the pandemic, policymakers could take more incremental approaches, such as creating a public option or Medicare buy-in, to leave less of workers’ coverage to the discretion of employers and to minimize potential disincentives to hiring older workers.

Expand Social Security to forestall a looming retirement crisis

Even in a best-case scenario, the recession will likely result in more workers retiring earlier than planned. We should expand Social Security benefits and revenue to forestall a looming retirement crisis caused by the decline of secure employer pensions in favor of do-it-yourself 401(k) plans, among other factors. It’s worth noting that Social Security and traditional pensions act as automatic stabilizers when the economy is operating below capacity due to a decline in overall spending. Social Security and traditional pensions allow workers to retire regardless of economic conditions and inject needed funds into the economy. In contrast, 401(k)-style plans tend to exacerbate business-cycle gyrations.

Key takeaways:

• The Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law last month, and earlier policy responses to the pandemic are steps in the right direction but don’t do enough to protect workers, including older workers, who are at much greater risk from COVID-19.
• Older workers who lose their jobs face harsh consequences. They have less time to make up for lost earnings and savings before retirement. Many have trouble being hired and retire before they’re ready. They’re often forced to accept large pay cuts because some skills and knowledge they’ve built up aren’t transferable and may be undervalued by prospective employers.
• While older workers are less likely to work in the hard-hit leisure and hospitality industries, many are employed in other sectors and occupations that could see large job losses, including public-sector occupations.
• Expanding access to paid sick and family leave is critical to the safety and well-being of older workers and their families, as are stronger health and safety protections for workers.
• The CARES Act makes some necessary changes to paid leave and unemployment insurance programs, but these reforms need to be made permanent or automatically extended as long as economic conditions warrant.
• Older workers with inadequate health and safety protections who stop working because they’re at higher risk of serious consequences from COVID-19 should be eligible for paid leave and unemployment benefits.
• Work-sharing programs that encourage employers to reduce hours rather than resort to layoffs would especially help older workers.

(This is part one of a two-part series of posts on the impact of the coronavirus on older workers and what needs to be done to mitigate the economic shock to this group.)

The Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law last month, and earlier policy responses to the pandemic are steps in the right direction but don’t do enough to protect workers, including older workers, who are at much greater risk from COVID-19.

Older workers ages 65 and older, though not those ages 55–64, are less likely to be able to work from home than most other workers; only workers ages 15–24 are less able to telecommute. These older workers—many of whom are on the front lines—are at much higher risk of dying or suffering serious consequences from COVID-19 than their younger counterparts.

Personal care aides are among the low-paid and high-risk occupations with a disproportionate share of older workers (personal care aides are also overwhelmingly women and disproportionately people of color and immigrants). Older workers are also somewhat more likely than their younger counterparts to be employed in hospitals and nursing homes. (Unless otherwise noted, all references to older workers’ employment shares are based on the author’s analysis of 2015–2017 American Community Survey microdata for workers ages 55–64.)

The federal response to the pandemic has so far done little to protect the health of older workers and others facing greater risk from exposure to the virus, who are faced with a daily choice between risking their lives and losing their livelihoods. Low-paid workers in particular are not only less able to work from home, they’re also more likely to rely on public transportation and share close living quarters, heightening the risk of contagion for themselves and their families.

Pandemic unemployment assistance and expanded paid leave provisions aren’t structured to allow older workers at high risk to stop working

The CARES Act extends Pandemic Unemployment Assistance (PUA) to many workers who lose their jobs for reasons related to COVID-19, including those with compromised immune systems who have been advised to self-quarantine by a doctor. However, it leaves much to the discretion of state administrators, who may not view age-related risk as a qualifying factor for unemployment assistance if a worker stops working voluntarily. In this unusual situation, protections afforded unionized workers in collective bargaining agreements (CBAs) don’t necessarily help, since many such CBA provisions require that layoffs happen in reverse order of seniority even if some older workers would prefer to be laid off rather than continue working.

The administration’s failure to establish and enforce workplace safety standards and ensure access to personal protective equipment is endangering millions of workers on the front lines of our emergency response, including older workers at much higher risk of serious complications from exposure to the virus. Workers who are being asked to put their lives at risk are engaging in work stoppages and other actions to protest the lack of attention to their predicament from employers and policymakers.

Expanding access to paid sick and family leave is critical to the safety and well-being of older workers and their families. As a recent analysis by EPI research associate Teresa Ghilarducci shows, 40% of older workers lack access to any paid leave, including many older workers in health care support occupations. Though the share of younger workers who lack paid leave is even higher than the share of older workers who lack it, older workers are more likely to be in poor health or to be taking care of elderly and at-risk family members than their younger counterparts.

The Families First Coronavirus Response Act requires certain employers to provide paid sick leave to workers who need it for reasons related to the pandemic, including workers who have been advised by a doctor to self-quarantine or are showing symptoms and seeking a diagnosis. However, the legislation only requires employers to pay two-thirds of workers’ pay up to a limit and exempts large employers altogether. There are no special provisions for workers at heightened risk due to age or underlying medical conditions.

Extending economic relief measures provided to households and small businesses and expanding aid to state and local governments would help older workers

Looking beyond health risks, many older workers are at risk of permanent job loss. Some sectors leveled in the initial shock waves—hospitality, fitness, and entertainment—typically have younger workforces. But airlines and airline manufacturing, public transit, and other industries affected as travel and commerce grind to a halt employ many older workers. Many more older workers are likely to lose jobs in real estate and related occupations, including many janitors.

The relief measures in the CARES Act are a lifeline to these workers and their families. These include expanded unemployment benefits and direct payments to households that aren’t tied to eligibility for unemployment insurance, which leaves out many older part-time and low-paid workers.

Mending our threadbare unemployment system is a high priority for young and old alike. The CARES Act makes some necessary changes via the PUA program—expanding eligibility, benefit amounts, and the duration of benefits—but these reforms need to be made a permanent part of our Unemployment Insurance (UI) program or automatically extended as long as economic conditions warrant. Likewise, other relief measures in the CARES Act should be extended as long as they’re needed.

More federal aid to state and local governments—so far limited to a bump in Medicaid funding and a meager and onerous-to-claim $150 billion in the CARES Act—would cushion the blow to public-sector workers, who tend to be older than their private-sector counterparts. Aid to state and local governments would also prevent a public-sector contraction from slowing the recovery as happened in the Great Recession.

On a brighter note, the $350 billion allotted to small businesses—if it reaches them—could help older workers, who are more likely than their younger counterparts to be employed by smaller firms. Small business loans and subsidies could also help many independent contractors, who are disproportionately older workers.

Older workers would be among those hardest hit by a prolonged recession

While few workers will be unscathed if the economy fails to rebound quickly, the youngest and oldest are likely to be hurt most by a prolonged recession.

Older workers tend to be slower to lose their jobs in recessions because they have more work experience, but face harsh consequences when they do. They have less time to make up for lost earnings and savings before retirement yet are likely to remain unemployed longer. Many become “discouraged workers” who have given up on the job search and end up retiring before they’re ready.

Unemployed older workers who manage to find jobs are often forced to accept large pay cuts because some skills and knowledge they’ve built up aren’t transferable and may be undervalued by prospective employers. Employers’ reluctance to hire unemployed older workers tends to increases with the length of unemployment even if the duration of unemployment is due to economic conditions.

Meanwhile, relatively well-off older workers with retirement account savings may put off planned retirements in response to a plummeting stock market, with repercussions for workers farther down the career ladder. While a stock market downturn can benefit younger workers who are starting to save and can now “buy low,” older workers’ new contributions are outweighed by declines in the value of their holdings—a situation often made worse by the impulse to stem losses and sell before the market has a chance to rebound. While better-off younger households recouped their losses from the 2008–2009 financial crisis by 2016, most households—including better-off older households—were still playing catch-up six years later.

The quickest way to prop up the economy and help people pay their bills is direct payments to households regardless of age and employment status, as in the CARES Act. Initially, accessing these benefits required people to file tax returns, which was burdensome on retirees, including workers who were forced to retire early after losing their jobs in the pandemic. Many retirees don’t normally file tax returns since Social Security benefits are exempt up to a cap. This has been corrected thanks to pressure from groups representing Social Security recipients, but the new policy doesn’t apply to older Americans receiving Supplemental Security Income or Veterans Administration benefits.

The CARES Act that was signed into law is an improvement over the original draft, which would have funneled much of the aid through a cut in payroll taxes that fund Social Security and help fund Medicare. Payroll tax cuts are poorly targeted because high earners benefit the most while unemployed workers and retirees—who tend to spend aid quickly—get nothing. A relic of this provision remains in the final bill, which allows employers to defer their portion of the payroll tax until 2021 and 2022. Republicans’ insistence on this relatively ineffective form of stimulus is an attempt to advance the idea that Social Security contributions hurt the economy, setting the program up for future cuts and stymieing expansion efforts. The Washington Post reports that the administration is still mulling the idea of including a payroll tax cut in future legislation.

Older workers and others would benefit from expanded work-sharing

Because unemployment is so damaging to older workers and firm-specific skills and knowledge are lost when experienced workers lose jobs in a recession, state and federal policymakers should consider enacting and promoting work-sharing policies modeled on one used successfully in Germany in the Great Recession. These programs (also known as short-time compensation programs) encourage employers to reduce hours rather than lay off workers. They compensate workers who have had their hours reduced as a result of economic conditions as an alternative to requiring that workers be laid off before accessing unemployment benefits. Such policies are already in place—though underutilized—in some states. The CARES Act includes funding to states that have existing work-sharing programs or want to establish new programs, but employers may be unaware of this option.

Older workers at risk of permanent job loss aren’t the only group that would benefit from promoting work-sharing. Immigrants, including naturalized citizens and noncitizens with work authorization, are at greater risk of losing jobs permanently when employment ties are severed since their documents are more likely to have administrative errors that can trip up verification of work authorization. Older immigrant workers in particular may have trouble tracking down or replacing official documents needed to rectify errors.