December Unemployment Report for Workers Over 55 

The Bureau of Labor Statistics (BLS) today reported a 3.6% unemployment rate for workers age 55 and older in December, an increase of 0.1 percentage points from November.

Low headline unemployment rates imply a healthy labor market for older workers. However, the official rate hides an unequal distribution of healthy jobs for older workers. Older workers with lower earnings are twice as likely as high earners to be in physically demanding jobs.

For older workers in the bottom half of hourly earnings – wages below $22 per hour – 52% report their job requires either lots of physical effort, lifting heavy loads, or stooping, kneeling, or crouching all or most of the time. For older workers earning between $22 and $40 an hour, the number reporting physically demanding jobs drops to 36%. For those in the top 20%- who earn over $40 an hour- only 27% report having physically demanding jobs.

Physically demanding work debilitates and breaks down human bodies. For older, low-earning workers, cutting Social Security benefits by raising the retirement age would impede their ability to leave the labor market when no longer able to handle physically demanding work. To ensure all workers can retire when they are no longer able to work, policy makers should expand Social Security and provide a universal second income tier through Guaranteed Retirement Accounts (GRAs). GRAs are a retirement savings vehicle with low fees and guaranteed growth, allowing even low-wage workers a path to secure retirement.

November Unemployment Report for Workers Over 55 

The Bureau of Labor Statistics (BLS) today reported a 3.5% unemployment rate for workers age 55 and older in November, a decrease of 0.2 percentage points from October.

While “Older Workers at a Glance” shows steady growth in real earnings for older workers, national averages mask long-run stagnation and decline in the four rust-belt states - Michigan, Ohio, Pennsylvania, and Wisconsin - that unexpectedly voted for Donald Trump after voting for President Obama in 2012. 

Before Reagan, older workers in these four states received higher wages than older workers in the rest of the country. Now they are doing worse. In 1979, rust-belt older workers were making $3,600 more than their counterparts elsewhere. In 2015, they were earning $4,000 less. Between 1979 and 2015, the median real wage for older workers in the four rust-belt states that flipped to Trump increased only 1% compared to 17% in the rest of the U.S.

Stagnant and declining real wages erode workers’ ability to save for retirement and increase their reliance on Social Security. To address the economic insecurities of working families, the Trump administration needs to create a path to a secure retirement by expanding Social Security and providing universal access to secure retirement plans through Guaranteed Retirement Accounts.

Older Workers are Increasingly Concentrated in Low-Wage Jobs 

The Bureau of Labor Statistics today reported an unemployment rate of 3.7% for workers aged 55 and older in October. However, the unemployment rate fails to reflect the increasing concentration of older workers in low-wage service jobs.

First, older workers are more likely than younger workers to be in low-wage jobs. A low-wage job pays less than two-thirds the median wage, or $539 per week. In September, 27.1% of full-time workers aged 55 and older were in low-wage jobs compared to 19.0% of younger workers.

Second, the share of older workers in low-wage jobs has increased over time, while the share for younger workers has stayed the same. The September share of older workers in low-wage jobs, 27.1%, is 1.4 percentage points higher than the share ten years ago (25.7%).

Third, women are the majority of workers in seven of the top 10 low-wage jobs for older workers, primarily service occupations. They make up more than 75% of older workers in four of the top ten jobs, despite being a minority of older workers.

Older workers in low-paying service jobs face extra difficulty saving for retirement. This may be a particular problem for older women workers who are unlikely to have access to a retirement plan. Living paycheck to paycheck, even those with coverage have little room to cut consumption to increase retirement savings.

To enjoy a secure retirement, low-wage workers need a retirement plan, not a low wage job. The need is becoming ever more pressing as the Social Security Full Retirement Age is increased, equivalent to a cut in benefits for those who do not delay retirement. Guaranteed Retirement Accounts (GRAs) supplement Social Security in combating old-age poverty by providing all workers a retirement savings vehicle with low fees and guaranteed growth, allowing even low-wage workers a path to secure retirement.

I am honored to be named as one of Next Avenue’s 2016 Influencers in Aging for my work to reform our broken retirement savings system by giving every American a Guaranteed Retirement Account.  Each year, the Influencers in Aging list recognizes 50 thought-leaders at the forefront of changing how we age and how we think about aging. Influencers are leaders in improving the lives of older adults and their families and communities. 

I'm honored to join experts from business, labor, and academia on Philadelphia’s Task Force on Retirement Security for Private Sector Employees. Chaired by Councilwoman Cherelle Parker, the 16-person group is charged with issuing a report to the Council recommending policy solutions to address the city’s retirement crisis.

In 2016, SCEPA produced a report for the City Council at the request of Councilwoman Parker describing the retirement crisis in Philadelphia. It found that only 47% of Philadelphia’s workforce has access to a retirement plan at work, compared with 53% of workers nationally. Philadelphia’s seniors are more likely to be poor or near poor, with 50% having incomes below 200% of the poverty line, compared with 31% nationally.

Philadelphia is the latest in a series of cities and states to recognize and confront the retirement crisis. I sit on a similar commission for New York State and has been asked to advise on plans in some of the 29 states that have proposed or implemented retirement reform in the past five years.

Philadelphia is not waiting for the federal government to act on the upcoming retirement crises. At SCEPA, we have found the average 401(k) and IRA balance for older workers is $14,500 and half the workforce does not have access to a retirement plan at work. Middle class retirees risk working into their 70s or living an impoverished retirement. We hope to help all Philadelphia workers retire by contributing to a professionally managed, low fee retirement account that pays a pension for life.

In the absence of federal action, cities and states have taken the lead in proposing solutions to the retirement crisis. But to provide everyone a viable path out of the retirement crisis requires a national solution. I propose Guaranteed Retirement Accounts -- mandatory, universal savings accounts with a guaranteed rate of return -- as the best way to ensure that everyone can retire with dignity.

Edward Wolff, an economist at New York University (NYU) presented his latest paper, “U.S. Pensions in the 2000’s: The Lost Decade” on October 14, 2016 as part of the Economics of Aging speaker series. His work examines trends in pension, total wealth, and wealth inequality between 1986 and 2010, a period during which 401(k) plans largely displaced traditional defined benefit retirement plans in the private sector. 

Presentation: U.S. Pensions in the 2000's: The Lost Decade

The Political Economics of Aging speaker series is a forum for academics and practitioners to share and engage in cutting edge research in social policy and the political economy of aging. The series is designed to forge interdisciplinary connections and examine how to progressively manage an aging society. The series is sponsored by SCEPA's Retirement Equity Lab, led by myself and Tony Webb.

The event was free and open to the public.