An SSAI-Sponsored Study of the Employment Experiences and Challenges Facing Older Workers

Summary

The Employment and Labor Market Problems of America’s Older Workers from 2000-2011:
The Growing Economic Plight of the Nation’s Low Income Workers

Center for Labor Market Studies – Northeastern University

Andrew Sum, Joseph McLaughlin, Ishwar Khatiwada, & Sheila Palma

This report documents and assesses the labor market problems faced by older workers, especially those with low incomes and less education. There were nearly 2 million unemployed low-income older workers in 2011 and the Senior Community Service Employment Program (SCSEP) is the only federal program that targets them for training and employment. This highly vulnerable population requires and deserves greater federal attention for many reasons, as follows.

Although the number of older workers age 55-74 increased by 60% in the last decade to 29.7 million, low-income older workers made no employment gains during that time, unlike their higher income age peers.

  • The 2011 employment-to-population ratio for low-income older workers was nearly 3.5 times lower than that for the highest income group (22% vs. 73%). These income-related differences in employment rates are compounded when educational attainment is also taken into account.

The overall unemployment rate for older workers of 7.1% in 2010 and 6.7% in 2011 were the highest since World War II. But it was much worse for those in households with income less than $20,000.

  • Their unemployment rate almost tripled in the last decade to 20.0% in 2011, more than eight times higher than the 2.4% unemployment rate for older workers with incomes of $100,000 or more.

The severity of unemployment for older workers in 2010-2011 was the worst since 1947 and their average duration of unemployment is persistently the longest of all age groups – and getting worse.

  • Two-thirds of unemployed older workers were permanently displaced from their jobs and they face severe difficulties finding work.
  • Since 2000 there has been a dramatic twelve-fold increase in the number of long-term unemployed older workers. By 2011 their average duration of unemployment surpassed 46 weeks, compared to 36 weeks for all unemployed workers. In 2012 the average duration continued to increase.
  • National survey data indicate that unemployed low-income older workers, especially the long-term unemployed, are significantly more likely to suffer from depression and dissatisfaction with life.
  • All of these disparities are notably worse for the lowest income and least educated older workers.

The ranks of “underutilized” older workers – the unemployed, hidden unemployed and underemployed – tripled to more than 4.5 million people between 2000 and 2011.

  • The underutilization rate of the lowest income older adults was 39 percent, 6.5 times higher than the six percent rate for the most affluent older workers.

Older workers’ earnings have decreased, especially those who are low income and underemployed.

  • The median weekly earnings of the 1.3 million underemployed older workers in 2010 were $300, compared with $750 for those not underemployed.
  • As a result, 67% are drawing down their savings, including tapping into retirement accounts. Many draw on unemployment, Social Security, Supplemental Security Income, food stamps, Medicaid and other transfer programs, thereby straining federal and state budgets.

Conclusion: The plight of America’s older workers, especially the low-income unemployed, is the worst it has been in more than 60 years. A 2011 Government Accountability Office report notes that SCSEP is the only federal program that targets unemployed low-income older workers and does not duplicate other workforce programs. It is unique in serving the training and employment needs of the most vulnerable elders.

For a PDF copy of the full report, please email your request to bharootyan@ssa-i.org.