The Bureau of Labor Statistics today reported a 3.0% unemployment rate for workers age 55 and older in April, a decrease of 0.2 percentage points since March.
While this number is low, we continue to hear stories of older workers struggling in the modern economy, such as Doug Schifter, a livery cab driver in his early 60’s who committed suicide after blaming politicians and Uber for turning his livelihood into economic slavery.
Unfortunately, recent data show that between 2005 and 2015, the growth in bad jobs held by older workers outpaced growth in jobs offering decent pay or stable employment. The growth of low-paying, unstable work contradicts claims of a strong labor market for older workers.
Over the decade, the number of jobs held by older workers increased by 6.6 million. Over half of this increase — 3.4 million or 52% – was in bad jobs, defined by low wages or precarious work arrangements. This breaks down to 28% in low-paying jobs (less than $15,000 a year, or two-thirds the median wage) with traditional work schedules; 10% in on-call jobs; 10% in temp or contract agency jobs; and 4% in gig jobs. 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.*
In theory, alternative work arrangements can provide older workers flexibility in work schedules, allowing them to transition into part-time work as they age. In practice, these jobs often offer little flexibility. Rather, workers in alternative jobs report they do not believe they would be able to find traditional jobs, indicating bad jobs are not choices but last resorts.
Working longer in a low-wage or precarious job is not a solution to the retirement savings crisis. Rarely do these jobs offer retirement coverage, nor do they offer wages to allow for savings. Rather, we need to create Guaranteed Retirement Accounts (GRAs), universal retirement accounts that provide employees with a safe, effective vehicle to save over their working lives. With a lifetime of mandatory savings matched by their employer and supported by a refundable tax credit, GRAs can provide workers with reliable retirement income as an alternative to working a bad job.
*SCEPA calculations using the Contingent Work Survey fielded by the Bureau of Labor Statistics in 2005 and American Life Panel in 2015. Analysis includes workers ages 55 to 64 working full-time, defined as over 30 hours a week for more than 45 weeks a year.
*Arrows next to “Older Workers at a Glance” statistics reflect the change from the previous month’s data for the U-3 and U-7 unemployment rates and the last quarter’s data for median real weekly earnings and low-paying jobs.
SCEPA’s Retirement Equity Lab (ReLab), led by economist and retirement expert Teresa Ghilarducci, researches the retirement crisis that exposes millions of American workers to downward mobility in retirement.
