In a presentation to the Pajara Valley Saves Lives Coalition, SCEPA Director Teresa Ghilarducci describes how Covid-19 is accelerating gaps in race, income and gender inequality and has created new ones in employment, education, and life expectancy. See the full presentation here



Economists describe inequality of job loss as a K-shaped recession. In a K-shaped recession, the top segment of society climbs back upward while another segment continues to suffer.  A graph of economic growth in this scenario would resemble two diverging diagonal lines of the letter "K." Peter Atwater at The College of William and Mary calls a K-shaped recovery, “Stacked inequity on one side and stacked privilege on the other.”

As a result of the pandemic recession, employment gains experienced by non-white workers from 2009- 2019 nearly disappeared. Recessions force out marginal workers first, often called “last in-first out,” or LIFO. The Federal Reserve’s study of previous recessions show non-white workers and women lose more jobs as a share of their employment than white men in recessions. 

The Covid recession was even harsher on women, as so many had to leave the labor market in order to perform care work for their parents, children, other family members or all of the above. Ghilarducci points out the sad label given to the Covid-19 recession, the “she-cession.”  Additionally, women lost more jobs than men in the Covid-19 recession. To bring women back to the labor market and recover their losses, she argues for expanding school days and a more equal division of care work between genders.


Covid-19 policies caused deep inequalities at school. The effects of school closures during the Covid-19 pandemic was studied by researchers from the University of Pennsylvania, Yale, and Northwestern. Students from poor neighborhoods suffer great losses, whereas children from rich neighborhoods remain unscathed. Differences in the quality of schools, the income levels of peers, and how equipped parents are to help all contribute to growing educational inequality during the pandemic. Ghilarducci says, if schools had to be closed, we could have considered supplying extra resources to the children of essential workers, as well as compensating schools more in lower income areas based on their needs. 

Life Expectancy 

Researchers found Covid-19 will reduce U.S. life expectancy in 2020 by 1.13 years, but Black and Latino populations are estimated to see life expectancy rates decrease by 3 to 4 times that of whites. Theresa Andrasfay and Noreen Goldman from the University of Southern California and Princeton University report that Covid-19 caused a disproportionate number of deaths among the Black and Latino populations. According to Rogelio Sáenz at the University of Texas at San Antonio and Marc A. Garcia at the University of Nebraska - Lincoln, “Covid-19 is expected to reverse over 10 years of progress made in closing the Black−White gap in life expectancy and reduce the previous Latino mortality advantage by over 70%.” 

Life expectancy is expected to continue dropping due to persisting Covid-19 mortality and the long-term health, political, social, and economic impacts of the pandemic. For example, survivors suffering lasting effects from the virus can face disabilities, including long-term neurological disability that requires expensive medical care.


Ghilarducci notes that some policies implemented in response to the pandemic were beneficial, such as moratoriums on evictions that saved lives and helped stem inequality. “Housing precarity policies that prevent eviction and utility disconnections have been effective mechanisms for decreasing both Covid-19 infections and deaths,” according to five Duke researchers. However, these could have been more effective if implemented nationwide. If a federal eviction moratorium had been in place from early March 2020 through the end of November 2020, Covid-19 infections would have decreased by 14.2% and deaths by 40.7%. Utility disconnection moratoriums would have reduced Covid-19 infections rates by 8.7% and deaths by 14.8%. 


Wealth inequality was reduced due to lower-income people using their stimulus checks to pay off debt. The New York Federal Reserve found that people who are non-white, without a college degree, in lower-income households, and in households experiencing negative employment shocks or income drops since the start of the pandemic are more likely to use substantially larger shares of their economic impact payments to pay down debt.

  2020 Q3 Status Of Older Workers Report

*The 1.4 million older workers still unemployed since April does not include workers who were unemployed in April and have since left the labor force. Arrows reflect the change from the previous period’s data. Bureau of Labor Statistics (BLS) and SCEPA calculations based on Current Population Survery (CPS) data.

  • Unemployment Gap Flips: Unemployment rates for workers 55 and older exceeded those of mid-career workers for the length of the pandemic — the first time since 1973 such an unemployment gap has persisted for six months or
  • Slower Recovery For Older Workers: Older workers lost jobs faster and returned to work slower than mid-career workers, creating an unemployment gap of 1.1 percentage points between older workers’ six-month average unemployment rate of 9.7% and mid-career workers’ rate of 8.6%.
  • Inequality in Recovery: Older workers who are Black, female, or lack a college degree experienced higher rates of job loss and are more exposed to retirement risks.
  • Policy Recommendations: High and persistent unemployment, compounded by the health risks of Covid-19, threatens the retirement security of older workers. Congress needs to increase and extend unemployment benefits for older workers, discourage withdrawals from 401(k)s and IRAs, lower Medicare eligibility to 50, and create a federal Older Workers Bureau.

Download the full report here.


 2020 Q2 Status Of Older Workers Report

  • Millions Pushed Out of the Workforce: 2.9 million older workers left the labor force since March. These workers are at risk of having to retire involuntarily due to increased health risks coupled with decreased job
  • More Involuntary Retirements to Come: If the rate of labor force exits continues over the next three months, we expect an additional 1.1 million older workers to leave the labor force, adding to the 2.9 million who already left. A total of 4 million people potentially pushed into retirement before they are ready will increase old-age poverty and exacerbate the recession.
  • Policy Recommendations: Congress should increase and extend unemployment benefits for older workers, discourage withdrawals from 401(k)s and IRAs, lower Medicare eligibility to 50, and create a Federal Older Workers Bureau.

Download the full report here. 


2.9 Million Older Workers Left the Labor Force Since March

 2020 Q1 Status Of Older Workers Report

  • Increased Downward Mobility At All Earnings Levels: An additional 3.1 million older workers will fall into lifelong poverty in retirement. Overall, the 67 million older workers and their spouses in the U.S. will suffer a decrease of 7 percentage points in their retirement replacement
  • Middle Earners Hit Twice: Middle earners sustain both job loss and market loss, leading to an additional 1.1 million older workers falling from the middle class into poverty.
  • Policy Recommendations: Older workers were left out of the government response to the COVID-19 recession. In the short term, Congress should discourage early retirement withdrawals and increase and extend unemployment benefits for older workers. The recession exposes the need for comprehensive reform: expanding Social Security and creating a public option retirement plan in the form of Guaranteed Retirement Accounts.

Download the full report here. 


All Earnings Levels: Increased Poverty

This is a transcipt of a keynote orignally presented at the Association of Social Economic's 2020 ASSA Reception.


(Photo by: Martha Susana Jaimes)


The Gray New Deal: General Theory of Employment, Retirement, and Money

Teresa Ghilarducci

Keynote for the Association Social Economics’ ASSA Reception

January 2 6:30 pm

San Diego ASSA


Over the last thirty years, we have witnessed a doomsday for pensions. The vast majority of the ten thousand baby boomers turning 65 every day do not have enough income to maintain their standard of living. For the first time in modern history, the American elderly will be relatively worse off than their parents and grandparents. If nothing happens, almost half of middle-class workers over 50 will be poor or near-poor retirees by 2030. Many will turn to work—any kind of work. The failing do-it-yourself American pension system is causing the coming humanitarian and political crises and a deep disturbance in labor markets.  

There are two policy tracks addressing the coming old-age income crises. One track fights age discrimination, promotes job retraining, extolls the benefits of paid work and does not prioritize securing retirement income.

The other track is a Gray New Deal. A Gray New Deal recognizes that civilized democratic societies provide adequate pensions, allowing people to retire in dignity.

A Gray New Deal competes with what I call the “working longer consensus.” Doubtless members of the Association of Social Economics remember the 1980s global economic policy framework, the Washington Consensus, which promoted pro-market, pro-austerity policies. The Washington Consensus was so named because it came from Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank, and the U.S. Treasury and was supported by academics.

This is a repost from Forbes. 


There is no way to get to anything resembling a secure retirement system without expanding Social Security. We also need to fix the broken employer-based retirement system, but fixing pensions and expanding Social Security are not substitutes. A comprehensive retirement security bill needs both. Let’s start with Social Security. 

Social Security is a social insurance program. Workers and employers pay premiums to insure against disability and death. What's more, the system is progressive. Social Security recognizes that low-income workers need a higher replacement rate—that is, a higher share of retirement income relative to non-retirement income—than high-income people. This is because wealthier recipients use Social Security as a base for their retirement, which they supplement with assets and pensions. Social Security is not enough by itself to maintain living standards and stay above poverty

But even with their higher replacement rates, low-income retirees can hardly get by. Consider lifelong low earners, who made around $10 an hour or about $20,000 per year—say, the person who stocked shelves at the drugstore before they got a better job at Home Depot. An excellent paper from Boston College’s Center for Retirement Research shows that for these low earners, the actual Social Security replacement rate is currently about 69%. Low-income workers can barely live on their earnings while they are working. Having them live on 69% of their low incomes in retirement (about $14,000 a year) is not just difficult—it is poverty. 

Contrary to those who argue otherwise, the fact is that even low-income workers need a supplement to Social Security to stay out of de facto poverty. Yet the share of pre-retirement earnings replaced by Social Security has steadily fallen since the 1980s because of Medicare premiums increasing and benefit cuts stemming from the increasing in the full retirement age from 65 to 67. Higher income workers need about 70-80% replacement rates in retirement (they generally don’t need 100% because their tax rate and savings rates will decrease in retirement). But the average actual replacement rate for a middle-class worker is about 39%, and for the highest earners 31%.

And these replacement rates are achieved only if we do something to boost Social Security revenues just to pay for these promised benefits to achieve these replacement rates. If we fully fund Social Security, but do nothing to help workers supplement Social Security, the number of poor or near-poor people over the age of 62 will increase by 25% between 2018 and 2045, from 17.5 million to 21.8 million. In the next 12 years, 40% of middle-class older workers will be poor and near-poor elders. Even workers who don’t fall into poverty will suffer downward mobility.

Of course, the picture is much darker if we fail to raise Social Security revenues and automatic benefit reductions occur. The hypothetical is sobering to consider: your benefits are cut 25%; you move in with your adult children; your 80-year-old neighbor skips dinner. Elderly poverty is already a pressing issue; it will grow even faster if we don’t raise revenues to pay promised Social Security benefits. 

This hypothetical can be avoided, however. Rep. John Larson (D-CT) and others are sponsoring the Social Security 2100 Act. The bill solves the math problem that without more revenue Social Security benefits for the median retired household will be cut by a quarter and replacement rates will fall by one-fifth in 2034.

The Urban Institute has an excellent paper on how to make Social Security solvent. The Larson bill uses a combination of these methods and follows the basic principle in Public Finance 101—keep taxes low and expand the base. 

This is a repost from Forbes. 



Every year policymakers present ideas to ensure the full funding of Social Security long into the future. One of the most commonly repeated of these proposals is to raise the age at which retirees receive their full benefits, which is currently slated to be 67 for those born after 1960. But raising the Social Security retirement age for “full” benefits leaves workers with two bad choices: working longer or living on reduced monthly benefits for the rest of their lives because raising the retirement age cuts benefits.

Advocates of the idea usually justify raising the retirement age by the fact that lifespans are rising and Social Security has to cover more years, so people should work longer. But raising the normal Social Security retirement age from 67 to, say, 68 (some even propose 76!) has little to do with working longer. The policy cuts Social Security benefits across the board.

Some of us are living longer, but not all

The under-examined and often breezy justification to raise the retirement age is that since we are living longer we should work longer. But that isn’t true for everyone. It is a well-established modern American trend that most of the longevity gains have gone to the top.

In a recent study published in the Journal of the American Medical Association, economist Raj Chetty and coauthors Michael Stepner and Sarah Abraham compiled 1.4 billion data points on individual lifespans and came to a sobering conclusion: “Between 2001 and 2014, life expectancy increased by 2.34 years for men and 2.91 years for women in the top 5% of the income distribution, but by only 0.32 years for men and 0.04 years for women in the bottom 5%.” Moreover, the authors found a nearly 15-year gap in life expectancy between the richest 1% and the poorest 1% of men (the gap was 10 years for women).

As Brookings economist Gary Burtless says regarding the “we-are-all-living-longer” justification: “This argument would be more convincing if increases in life expectancy were spread evenly across the workforce. They are not.”

Raising the Social Security retirement age targets black and low-income workers

Raising the Social Security retirement age is especially harmful to black and low-wage workers"); display: inline-block; position: relative; top: 2px; left: 2px; width: 18px; height: 15px; background-repeat: no-repeat no-repeat;">—as our new technical study finds. The reason why raising the full Social Security retirement age disproportionately impacts low-wage workers and black workers (regardless of income) is that they are unlikely to live long enough to make them whole, that is, to make up for the forgone benefits by living longer. Black and lower-middle class workers are also more likely to have physically demanding jobs, so the years they do live past claim age are likely to be spent with physical limitations.

espite small slight increases in longevity, black workers and women have not enjoyed boosts in “workability”—that is, the ability to work without causing significant deterioration of health. Between 1992 and 2014, our study found, older men and white workers enjoyed reductions (though slight) in physical job demands. This was not true for older black workers. Older women actually faced greater physical demands at work; in part, that's because old women are increasingly assisting even older women in personal and home health care.

Lifting the retirement age hurts everyone 

If you aren’t black or low-wage, don’t be lulled into thinking that increasing the Social Security full retirement age won’t adversely affect you. Increasing the official full-benefit claim age is equivalent to an across-the-board cut in Social Security benefits. Raising the FRA leaves workers with two bad choices: working longer or living on reduced monthly benefits for the rest of their lives.

The ongoing increase in the full retirement age from 65 to 67 years is equivalent to a 13% cut in benefits. Raising the full retirement age to 70 would cut another 20% of overall benefits.

Being laid off, pushed out, or deemed hard-to-hire also challenge older workers. Urban Institute economist Richard Johnson finds that more than half of older workers are involuntarily retired. As Johnson's colleagues have found, even if older workers with low incomes look for work, they may lack the skills to get the jobs. This makes hollow the advice to work longer to make up for lower Social Security benefits. The uncomfortable conclusion of labor economists is that raising the retirement age could hurt middle- and low-wage workers, as well as workers who have the bad luck to find their skills become outdated.

What to do? Instead of cutting Social Security benefits, retirement policy makers should consider raising more revenue for Social Security and modernizing the 401(k) and IRA systems to match the future of work.