Young graduates are in debt, out of
work and on their parents’ couches. People in their 30s and 40s can’t afford to
buy homes or have children. Retirees are earning near-zero interest on their
savings.
In the current listless economy,
every generation has a claim to having been most injured. But the Labor
Department’s latest jobs snapshot and other recent data reports present a
strong case for crowning baby boomers as the greatest victims of the recession
and its grim aftermath.
These Americans in their 50s and
early 60s - those near retirement age who do not yet have access to
Medicare and
Social Security - have lost
the most earnings power of any age group, with their household incomes 10
percent below what they made when the recovery began three years ago, according
to Sentier Research, a data analysis company.
Their retirement savings and home
values fell sharply at the worst possible time: just before they needed to cash
out. They are supporting both aged parents and unemployed young-adult children,
earning them the inauspicious nickname “Generation Squeeze.”
New research suggests that they may
die sooner, because their health, income security and mental well-being were
battered by recession at a crucial time in their lives.
A
recent study by economists at Wellesley College found that people who lost
their jobs in the few years before becoming eligible for Social Security lost
up to three years from their life expectancy, largely because they no longer
had access to affordable health care.
“If I break my wrist, I lose my
house,” said Susan Zimmerman, 62, a freelance writer in Cleveland, of the
distress that a medical emergency would wreak upon her finances and her quality
of life. None of the three part-time jobs she has cobbled together pay
benefits, and she says she is counting the days until she becomes eligible for
Medicare.
In the meantime, Ms. Zimmerman has
fashioned her own regimen of home remedies - including eating blue cheese
instead of taking penicillin and consuming plenty of orange juice, red wine,
coffee and whatever else the latest longevity studies recommend - to maintain
her health, which she must do if she wants to continue paying the bills.
“I will probably be working until
I’m 100,” she said.
As common as that sentiment is, the
job market has been especially unkind to older workers.
Unemployment rates for Americans
nearing retirement are far lower than those for young people, who are recently
out of school, with fewer skills and a shorter work history. But once out of a
job, older workers have a much harder time finding another one. Over the last
year, the average duration of unemployment for older people was 53 weeks,
compared with 19 weeks for teenagers, according to the Labor Department’s jobs
report released on Friday.
The lengthy process is partly
because older workers are more likely to have been laid off from industries
that are downsizing, like manufacturing. Compared with the rest of the
population, older people are also more likely to own their own homes and be
less mobile than renters, who can move to new job markets.
Older workers are more likely to
have a disability of some sort, perhaps limiting the range of jobs that offer
realistic choices. They may also be less inclined, at least initially, to take
jobs that pay far less than their old positions.
Displaced boomers also believe they
are victims of age discrimination, because employers can easily find a young,
energetic worker who will accept lower pay and who can potentially stick around
for decades rather than a few years.
“When you’re older, they just see
gray hair and they write you off,” said Arynita Armstrong, 60, of Willis, Tex.
She has been looking for work for five years since losing her job at a mortgage
company. “They’re afraid to hire you, because they think you’re a health risk.
You know, you might make their premiums go up. They think it’ll cost more money
to invest in training you than it’s worth it because you might retire in five
years.
“Not that they say any of this to
your face,” she added.
When older workers do find
re-employment, the compensation is usually not up to the level of their
previous jobs, according to data from the Heldrich Center for Workforce
Development at Rutgers University.
In a survey by the center of older
workers who were laid off during the recession, just one in six had found
another job, and half of that group had accepted pay cuts. Fourteen percent of
the re-employed said the pay in their new job was less than half what they
earned in their previous job.
“I just say to myself: ‘Why me?
What have I done to deserve this?’ ” said John Agati, 56, of Norwalk,
Conn., whose last full-time job, as a merchandise buyer and product developer,
ended four years ago when his employer went out of business.
That position paid $90,000, and his
résumé lists stints at companies like American Express, Disney and USA
Networks. Since being laid off, though, he has worked a series of part-time,
low-wage, temporary positions, including selling shoes at Lord & Taylor and
making sales calls for a limo company.
The last few years have taken a
toll not only on his family’s finances, but also on his feelings of self-worth.
“You just get sad,” Mr. Agati said.
“I see people getting up in the morning, going out to their careers and going
home. I just wish I was doing that. Some people don’t like their jobs, or they
have problems with their jobs, but at least they’re working. I just wish I was
in their shoes.”
He said he cannot afford to go back
to school, as many younger people without jobs have done. Even if he could
afford it, economists say it is unclear whether older workers like him benefit
much from more education.
“It just doesn’t make sense to
offer retraining for people 55 and older,” said Daniel Hamermesh, an economics
professor at the University of Texas in Austin. “Discrimination by age,
long-term unemployment, the fact that they’re now at the end of the hiring
queue, the lack of time horizon just does not make it sensible to invest in
them.”
Many displaced older workers are
taking this message to heart and leaving the labor force entirely.
The share of older people applying
for Social Security early spiked during the recession as people sought whatever
income they could find. The penalty they will pay is permanent, as retirees who
take benefits at age 62 — as Ms. Zimmerman did, to help make her mortgage
payments — will receive as much as
30
percent less in each month’s check for the rest of their lives than they
would if they had waited until full retirement age (66 for those born after
1942).
Those not yet eligible for Social
Security are increasingly applying for another, comparable kind of income
support that often goes to people who expect never to work again: disability
benefits. More than one in eight people in their late 50s is now on some form
of federal
disability insurance
program, according to Mark Duggan, chairman of the department of business
economics and public policy at the University of Pennsylvania’s Wharton School.
The very oldest Americans, of
course, were battered by some of the same ill winds that tormented those now
nearing retirement, but at least the most senior were cushioned by a more
readily available social safety net. More important, in a statistical twist,
they may have actually benefited from the financial crisis in the most
fundamental way: prolonged lives.
Death rates for people over 65 have
historically fallen during recessions, according to
a November 2011 study by economists at the
University of California, Davis. Why? The researchers argue that weak job
markets push more workers into accepting relatively undesirable work at nursing
homes, leading to better care for residents.
http://www.nytimes.com/2013/02/03/business/americans-closest-to-retirement-were-hardest-hit-by-recession.html?pagewanted=all&_r=0
