A Retiring Individual

Recently, I blogged Waitin’ fer da Boss to Die stressing that with so many older workers unable to retire because their private (and some company) pension plans having been decimated, the job opportunities for younger workers in the traditional workplace were going to be tougher, fewer and promotions through the system were likely to be slower. Clearly as new technology opens new doors, younger workers still have their shot at building the next generation of companies. But there is an ever uglier reality for newly unemployed older workers who have lost their most valuable asset – their job.

Age discrimination is illegal, but as a 30% increase in claims of age discrimination filed with the federal Economic Opportunity Commission or the AARP survey that 60% of older applicants have experienced personal instances of age discrimination reflect, unemployed, over skilled and over 45 (the older you are, the worse it gets) is a bad combination. This part of employment has always been part of life, but until now, there have been better systems in place to protect older workers.

Historically, in countries where there has been a transition from pure communism to some other economic playing field (Russia, China, parts of Eastern Europe), supporting older workers and retirees was the problem that didn’t get solved. Their government pensions (at least they had them) were designed to cover the cost of living in a world of government housing, medical care and severely controlled prices on most basic commodities; they were not created to support folks in an open and competitive society. These older, marginal workers are often left to fend for themselves in a new and unforgiving environment.

In some countries you can have the opposite effect, but the results for the country as a whole are equally devastating – Hungary, which has honored the paternalistic social contract where workers were guaranteed early retirement in exchange for working for low wages in a repressive regime, faces the sheer economic reality of that cost structure is pushing the entire nation off a cliff. The cost of these social programs is simply no longer affordable, threatening a total national economic collapse.

But in the U.S., the plight of the baby boom (and older) generation(s) is a terrifying reality to many workers who have lost their job in this meltdown. The April 13^th NY times: “Joanna N. Lahey, an economics professor at Texas A&M University, conducted a study published in 2005 in which she sent out 4,000 résumés on behalf of hypothetical job-seeking women ranging in age from 35 to 62 for entry-level jobs at companies in Boston and St. Petersburg, Fla. She changed only the applicant’s high school graduation year, an age indicator. Dr. Lahey found that workers under 50 were more than 40 percent more likely to be called for an interview [than those over 50].” And that report comes years before the current managed depression that has impacted older workers like a fatal slice of a deadly scythe.

While older workers are less likely to lose their jobs, of those that are laid off or “downsized,” the statistics, particularly among college-educated and highly trained personnel, clearly illustrate that older workers are faring much worse in this financial meltdown than their younger counter parts. They often face significantly lower payer and literally, a few years form when they would traditionally have retired, they are literally forced to start over at much lower pay levels. “Workers ages 45 and over form a disproportionate share of the hard-luck recession category, the long-term unemployed — those who have been out of work for six months or longer, according to the Bureau of Labor Statistics… On average, laid-off workers in this age group were out of work 22.2 weeks in 2008, compared with 16.2 weeks for younger workers. Even when they finally land jobs, they typically experience a much steeper drop in earnings than their younger counterparts.” NY Times

Modern job mobility has split generations into working vast physical distances apart. Extended family support is much more difficult to implement. The collapse of the housing market has taken down the value of family homes (often the de facto nest egg of older workers who view their homes as their savings), and while younger unemployed workers have found solace (and some humiliation) moving back with their parents, the future suggests that the massive burden of housing and caring for older people is going to fall increasingly on the younger members of those families.This is a plague for us all. For those who have reached these terrifying age demographics, where obsolescence and disabilities add additional stress to the above bleak picture, this is a jolting reality. Unless accident or disease ends a young life prematurely, sooner or later, each and every one of us will face the cruel reality of getting old in a society that will survive only with new industries in a dynamic reinvented economy.

But society has to wonder if spending vast sums to retrain workers with fewer working years left is justified when those training dollars are so important in creating a new, sustainable work force for a highly technical future. The same kinds of considerations go into how much money the government medical programs will provide to treat the elderly to cure expensive ailments for people with actuarially fewer years to live anyway. The ethical choices are mind-boggling in a world of limited resources. How do you allocate those scarce dollars?

There are no easy answers. These people are us now or us in the future. The future we create for older workers will be the same future we create for younger workers… sooner or later.

I’m Peter Dekom, and I approve this message.