September 15, 2019

“Getting the Great Big Kick”

Retirement. Photo by Rik Jones at Flickr. Creative Commons License

“This isn’t how most people think they’re going to finish out their work lives,” said Richard Johnson, an Urban Institute economist and veteran scholar of the older labor force who worked on the analysis. “For the majority of older Americans, working after 50 is considerably riskier and more turbulent than we previously thought.”

• quoted by Peter Gosselin

• • •

One of the issues that arises out of our capitalist economy that has become of increasing interest to me in this season of my life is the fate of the aging worker. At ProPublica, an author I heard interviewed recently, Peter Gosselin, has a piece called, “If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours.”

Gosselin was interviewed in response to a case that is heading to court on Wednesday, accusing IBM of age discrimination. Last year, it was reported that the company fired more than 20,000 workers over the age of 40, which amounted to around 60% of the job losses at IBM. His article addresses a pattern that IBM exemplifies.

ProPublica and the Urban Institute, a Washington think tank, analyzed data from the Health and Retirement Study, or HRS, the premier source of quantitative information about aging in America. Since 1992, the study has followed a nationally representative sample of about 20,000 people from the time they turn 50 through the rest of their lives.

Through 2016, our analysis found that between the time older workers enter the study and when they leave paid employment, 56 percent are laid off at least once or leave jobs under such financially damaging circumstances that it’s likely they were pushed out rather than choosing to go voluntarily.

Only one in 10 of these workers ever again earns as much as they did before their employment setbacks, our analysis showed. Even years afterward, the household incomes of over half of those who experience such work disruptions remain substantially below those of workers who don’t.

In the article, Gosselin quotes Gary Burtless, a labor economist, who says, “We’ve known that some workers get a nudge from their employers to exit the work force and some get a great big kick. What these results suggest is that a whole lot more are getting the great big kick.”

A numerical analysis of the study suggests that, of the 40 million American workers over age 50, 22 million will suffer a layoff, forced retirement or other involuntary job separation, with only about 2 million recovering from the loss.

When you add in those forced to leave their jobs for personal reasons such as poor health or family trouble, the share of Americans pushed out of regular work late in their careers rises to almost two-thirds. That’s a far cry from the voluntary glide path to retirement that most economists assume, and many Americans expect.

There is such a thing as age discrimination, and it’s illegal. However, in recent years, enforcement of the Age Discrimination in Employment Act (ADEA) has been much more relaxed, leaving many without its protections. Furthermore, most companies are no longer offering pensions, which may have given older workers incentive to retire early without undue worry. Laid-off workers in their 50s and beyond are more apt than those in their 30s or 40s to be unemployed for long periods and land poorer subsequent jobs, which can dramatically impact their quality of life in its final seasons.

“The expectation that American workers decide when they want to retire is no longer realistic for a significant number of older workers who are pushed out before they are ready to retire,” said Rutgers’ [Carl] Van Horn. This, despite the fact that, since 1986, mandatory retirement at any age has been outlawed by Congress. They subsequently added a requirement that people’s retirement decisions must be “knowing and voluntary.”

It’s not happening for many, perhaps a majority, of older workers.

Yesterday, when we talked generally about capitalism and its relationship with the teachings of Christ and the eschatological faith of the church, most of the discussion focused on how this economic system emphasizes private wealth and acquisition that have often left the poor damaged and on the margins. Peter Gosselin puts his finger on another aspect in capitalism’s development that affects people at a variety of income levels and status.

But unjust treatment is unjust treatment, and Peter Gosselin’s analysis helps us understand that few are immune from the grinding wheels turned by the bottom line.

Comments

  1. senecagriggs says

    I have felt very fortunate: I’m actually still working – part-time – despite being at an age where most people are retired; way past 50. I’ve been self employed most of my adult life; it does allow one to continue on.

  2. Adam Tauno Williams says

    This. Every day.

    If you are a younger America: save, save, save; start now, or yesterday. Eat ramen, sleep on a cot, and save. Achieve some success? Skip the boat, the sports car, the cottage, the premium cable package – buy real-estate as near a cultural amenity as you can afford. It will end; and nobody has your back.

    I don’t know what else to say.

    • I would tell younger America to get a university degree and certifications for a profession. Then, once hired, get a retirement account going with eventually as much as $ 6000 or more a year going directly into it from your paycheck.
      And LEAVE THIS ACCOUNT ALONE until you have to take money out when you are ‘of age’ 🙂

      So you retire with a professional retirement pension, with your giant nest-egg which gives you a chunk of money every year, and your social security . . . .

      and by the time you retire, have your home paid for and all your vehicles and any large debts paid for (yes, credit cards too) . . . . and for goodness sakes, if you own more than one home, dump one of them

      taxes too high ???? sell out and move to a state without high real estate tax for starters . . . . pay credit card (singular) off each month, and save up for expenses to travel or home maintenance or any large purchase.
      In short STAY OUT OF DEBT.

      get insurance to the max, nursing home insurance, medical insurances to supplement Medicare, all manner of insurances . . . . you don’t need surprise$ once you are retired, take advantage of Silver Sneakers discount . . .

      for goodness if you don’t NEED it, don’t buy it, unless it’s something like good shoes, or something incredibly joyful and utterly frivolous . . . anything else (stuff that’s useful), you can get from the Salvation Army or the Public Library . . . . .

      food? Aldi’s, the commissary, food stands, co-ops, Fresh Food markets . . . you’re old, you need a lot of fruit and a lot of salads (a box of dried prunes doesn’t cut it at your age anymore)

      $urvival when you are retired takes a bit of preparation, yes . . . . never too young to get on it

      • Adam Tauno Williams says

        > I would tell younger America to get a university degree and certifications for a profession.

        Interesting. I would say skip the degree – not worth it – it means dept. Yes to certifications. At this point college is a scam, unless you can pay cash; otherwise it is debt and 3-5 years of lost income (compound interest on 10-15% of that income, pretax, over 30 years…)

        > get a retirement account going

        Yep

        > LEAVE THIS ACCOUNT ALONE

        Mmmm, I don’t know. One thing this account is good for is as equity. You can leverage up to $50k of your 401k without penalty – that can be a good way to get your hands on other assets like property. Retire owning where you live. This is a too often overlooked trick (I built an apartment unit within sight of a university and a medical complex using this trick – which makes me feel much better about my rapidly approaching upcoming oldness).

        The summary of all this may be “GET A FINANCIAL PLANNER!” 🙂

  3. Add to the subject of this post that, even if older workers were not being kicked out of the work force, a significant percentage of them will not have enough saved to retire, and a very grim picture takes shape. I am one such. At 60 years of age now, I know I will never be able to afford to retire, but at some point, perhaps in the not too distant future if the way I’m feeling now is any indicator, I will not be able to work due to health and disability issues. Increasingly strained living conditions and poverty face me and my wife in the last years of our lives. As Adam advises in his above comment, “save, save, save…. nobody has your back.”

    • Saving would be a better option if interest rates weren’t hovering BELOW the rate of inflation… :-/

      • Adam Tauno Williams says

        There have been good years, there have been bad years, in terms of what happens to savings.
        It feels much better than it not being there; and the tax exempt status of a 401k really helps if you start early (start early! start early! start early! – i probably annoy my younger coworkers, etc… I’m like a broken record)

        I have friends who have not recovered from the previous recession, working multiple jobs to keep the debt flat, not making progress. I dread the consequences of the oncoming recession; this is going to be ugly.

        • –> “It feels much better than it not being there; and the tax exempt status of a 401k really helps if you start early (start early! start early! start early! – i probably annoy my younger coworkers, etc… I’m like a broken record)”

          Amen. I was fortunate to work for a company that matched half of what I put into a 401k, up to 4%. So if I put in 10%, they’d add 4%. I started that on day 1, just worked that into the budget, soon I was living off the 90% of my paycheck no problem.

          People need the discipline to do this, to put 10% every paycheck into a 401k. As you say, start early enough and it pays off hugely later. Keep the mantra going, ATW. We are SO trying to instill this mindset in our teen daughter. Hopefully she heeds the wisdom.

        • ADAM,

          I also know that bad times are coming and that it may be more across the board (especially if pensions dry up) than we want to consider.

          However, I have also pre-planned for this event with a number of dried bean, pea, and rice recipes with natural greens added for nutrition. I will share one of my best recipes for them what may end up as bums and this is a VERY nutritious meal, if prepared carefully according to direction:

          to all who are in present trouble or who realize bad times are likely coming to all of us someday soon, here is a nutritious ‘meal’ for those who will live ‘outside the gates’:
          Try this healthy recipe and be lovingly humbled at how much we have all taken for granted from the Hand of Our Lord:

          A.J. MUSTE MEMORIAL SUPPER:

          Here is the actual recipe as it was originally shared by those with few resources. Enjoy. :

          “To make this meal, you will need an iron pot to cook a broth (fish stock) made of fish-heads,
          so you must first go to the fishmonger and beg for fish-heads.
          He will feel compassion for you and will throw in a few pieces of fish with the heads.
          Place the fish heads in a netting to boil up a fish stock. If you have no netting, you can put them into a sock and tie it before boiling.
          ( This works well, but remember to wash the sock out thoroughly before wearing it again, or cats will follow you around. )

          After the stock is prepared, DISCARD THE FISH HEADS (this is important);
          and then add the following ingredients to the boiling stock:
          1. a handful of rice (costs very little)
          2. add fresh, hand-picked young dandelion greens (always available to those who must migrate to the warmer climates, even in winter)
          3. finally, add the pieces of fish that were given gratis by the compassionate fish-monger (pray for him as you do this)
          Boil this up patiently in the iron pot and do not set yourself on fire.

          When ready, give thanks to the Good Lord, and share your food with all around you who are hungry, including any animals.
          Clean up properly before departing.”

  4. Adam Tauno Williams says

    My favorite is converting salaried full-time workers, in basically the same jobs, to part-time hourly workers; because you know you’ve got them over the barrel. It is a pre-retirement, “second career”.

    The beauty of being a “right-to-work” state.

  5. I wrote yesterday defending capitalism, and I still prefer it to a system that has too much government control of our lives, but I also said it wasn’t perfect, and this post is an example. Whoever came up with the phrase “It’s not personal, its business” was speaking for the devil. If it concerns my ability to provide food, housing, clothing, and a halfway decent life for me and my family, then it is most certainly personal. Employers can’t totally ignore the bottom line, but they certainly need to consider the consequences their decisions have on the people they employ and understand that there are more important things than maximizing profit.

    • Adam Tauno Williams says

      >Employers…t they certainly need to consider the consequences their decisions

      That’s the thing. No, they don’t.

      • This was DBH’s point in his article. There is no necessary morality in the system. I work for an employer that generally treats their employees well, but that hasn’t stopped them from taking every step they could over the years to cut wage and benefit costs and to push for greater productivity. And this is in a non-profit hospice. I don’t personally fear for my future, but I’ll guarantee I’m keeping one eye open for indications that this could change.

  6. Iain Lovejoy says

    My father retired three times: once from an earlier career as a corporate accountant, once from working full time as a lecturer to go part time and once finally to actually stop working. He was lucky as his first employer had an already insanely generous pension scheme which they massively enhanced to persuade him to take voluntary redundancy.
    This is the UK, though, and we do things differently here. We have had age discrimination legislation I think less time than the US, but it is relatively straightforward for employees to enforce.
    I think the big difference is that (at least for workers with at least 2 years’ service, which older workers tend to have) there are strict rules about how redundancies and dismissals may be carried out, with mandatory consultation of the workforce, formal selection processes etc. A lot of companies attempt to short circuit the whole rigmarole by instead just persuading the older staff to take a termination package and go.
    I suspect as much as specific anti-discrimination laws, laws holding companies to account generally for how they treat employees, and requiring explanation and justification for it, protect vulnerable or discriminated-against groups.

  7. A complex issue with many factors affecting it. Lost of labor union power, unfair trade policies, abuse of work visa, illegal alien influx, legal immigration, demographics, effects of health care mandate on work hours and hiring decisions and a generous safety net that make work a poor choice for many.
    Mr. Gosselin , examples in his article showed his lack of connectivity to the average middle and lower level wage earner that this is really affecting. Mr. Steckel cited in the article in in great shape compared to the average blue collar worker being laid off in their fifty’s. The other examples also reflected the upper % of American workforce.
    One thing for sure, the teaching of Christ on this issue and many others are not going to be considered. They are not in any other context so why would economic fairness be any different.
    This is an issue that deserves a serious and honest discussion for the good of our nation and its future. We need to start by acknowledging this will cover a large territory, individual effort, government actions, corporate actions and what we believe is right for the well being of our country’s citizens and the future.

  8. Adam Tauno Williams says

    So, opinions, when faced with this – probably a lot, given demographics – what is a Pastors role? [*1]

    A local church is very unlikely to itself have the resources to directly aid in a long-term way.

    I have a friend, previously a pastor, now employed in the private sector. A large part of this was feeling constrained and impotent; unable to say anything about the real-world problems he saw every day.

    [*1] assuming Protestant-to-Evangelical. Other traditions seem to have much more latitude for the role of church leaders.

    • David Cornwell says

      A pastor needs to be aware of the resources that are available in a community and how to tap into them. Sometimes it is just a little thing that can bring hope. Help parishioners make connections. One of the reasons I favor a long pastorate is that this enables a pastor to network within his/her community and to link a person in need to the right individual or organization.

      • Adam Tauno Williams says

        > Help parishioners make connections.

        Good point. I hope that happens.

        So far what I’ve seen is that falls to Neighborhood Associations. There is a wide range of services and aids available – but knowing/finding them requires a lot of time; there is no clearing-house for such things.

  9. Adam Tauno Williams says

    “””…a further 15 percent of over-50 workers who begin with stable jobs quit or leave them after reporting that their pay, hours, work locations or treatment by supervisors have deteriorated”””

    Dark Thought: How much of this is them experiencing the overall deterioration of the American work environment, relative to having a memory of when it was better? vs. younger workers to whom it is normal. 🙁

  10. Adam Tauno Williams says

    I know some of the people offered “mandatory relocations” – to Eastern European countries. [*1]
    They don’t mean Oklahoma.

    [*1] although, at this point, maybe not looking to bad.

  11. Rampaging Chipmunk says

    Another vital thing to do is to do whatever you can to maximize your own health. Learn everything you can about nutrition (Actual information. Not bogus fad diets.) and fitness and prioritize living the healthiest life possible. It requires some time and effort, but very few things in life have greater potential positive outcomes. And no, you don’t need to spend a zillion dollars a month at Whole Foods to eat healthy. You can shop at Walmart and easily make it work and pretty cost effectively too. Around 70% of the American population is either overweight or obese. That is pretty staggering and I don’t think it can be understated how dire the negative consequences of this will be on both an individual level and on the society-wide macro scale. I know this seems off topic, but personal health is highly relevant to surviving whatever the modern American life throws at you.

  12. I am now 61. Several years ago, I went to a college reunion. I’d guess at least 25% of the people I talked to there had been laid off in the previous 5 years and none were able to find a job with comparable salary. I was laid off at 50 (business closed up) and have struggled to find a permanent job that paid well with decent benefits. I found one that involved working 60 hour work weeks frequently and was a 45 minute drive from my house. I decided it wasn’t for me when they demanded mandatory Sunday overtime and I found myself struggling to stay away on the drive home.
    I fear retirement. We have been very frugal but my husband and I both have had careers in social service type work that doesn’t pay well. You can be frugal but you can’t get blood from a turnip. The hardest part is knowing that nobody except my kids will care if I die in poverty. Even my siblings seem to think I should just have worked harder.

  13. I hate to say this, but all the advise given at the beginning of this thread is just the usual jibber jabber that assumes you – the individual – are in control. Wife lost her job at 50, she did all you say. We will never (I MEAN NEVER) recover financially and she will always bear emotional and social scars. Each step forward you take can be taken back at any time whether 50 or 60 or 30 or 20.
    A twist of fate or a twist of the knife, feels the same to those who get hit.