This is a repost from Forbes.
The economy is hot. After 106 months, the U.S. is in the second-longest recovery ever. Jobless rates are at historic lows, especially for the fastest-growing segment of the workforce, those 55 plus.
With such tight labor markets, we expect red hot wages. But wages for workers over 55 are practically frozen. The average weekly wage for full-time older workers has slowed, declining from $936 in 2016 to $811 today. Between 2005 and 2015, the growth in bad jobs – low pay and unstable – held by older workers outpaced the growth in decent-paying, stable jobs.
Employers are not bidding up wages to attract workers or using higher wages to retain their employees. This is what we would see in a low-unemployment rate environment if workers had bargaining power. Older workers are working more, seeking more work, and handed lower wages.
Why? A new paper by Courtney Coile argues eroding retirement security leaves them with few choices. Many 55-plus workers are stuck in low paying and/or unstable jobs because they lost their career jobs and took pay cuts in new ones. They may be stuck in regional economies that are shrinking. Or, quite possibly, they are being targeted by low-wage employers seeking experienced workers for physical labor, such as older workers recruited to work in Amazon warehouses.
Unstable or low-wage jobs make up more than half of older workers' job growth. Between 2005 and 2015, the number of jobs held by older workers increased by 6.6 million. 3.4 million or 52% are bad jobs (paid full-time workers less than $15,000 a year, or two-thirds the median wage or are in temporary or on-call work). The growth in these bad jobs outpaced the remaining 48%, or 3.2 million traditional jobs paying more than $15,000 or independent contractor jobs.
Boomer men and women may be working more for love – work is more attractive if people are healthier and more educated. But many other older workers are working for money because retirement accounts, retiree health care plans, and Social Security benefits have eroded.
The swell of older workers without adequate retirement incomes are being told to get a job. But we are not sure that they can get jobs beyond low-paid “greeters” at WalMart, or, as the book Nomadland documents, they live in RVs, chasing down low-paid, seasonal work.
If “working longer” is the new norm, then job quality at older ages needs to keep up with the capacities and needs of older workers. Older workers face the risk of wage declines, layoffs, and of not being trained in dynamic markets. We are going through an era where employers are preferring to “buy” not “make.” They have backed away from training, shifting the expense to workers. And older workers are the last to get training or perceived to have the right skills; tech and finance are especially troublesome for older workers.
Given this environment of more supply and less high-quality demand, an older worker may find it tough to upgrade themself (I am using the grammatical convention of a gender-neutral pronoun). My advice to older workers seeking work has three beats:
1.) “Badge” yourself with skills in an affordable way. No master’s degrees at 55? Prove you are able and eager to acquire new skills. Finish a free online course. Get certified with a computer skill. Engage in community service.
2.) Navigate around or confront persistent age discrimination. The growing sectors of tech and finance seem to avoid older workers. Seek help, either political or professional, to enforce age discrimination laws in those industries.
3.) Move to a labor market that is friendlier to older workers.
Working longer in a low-wage or precarious job is not a humane or practical solution to the retirement income crisis. Tony James and I proposed Guaranteed Retirement Accounts, or GRAs, which are universal retirement accounts that provide employees with a safe, effective vehicle to save over their working lives and to expand Social Security. Decent pensions provide workers with reliable retirement income and an alternative to working a bad job.