The Bureau of Labor Statistics (BLS) today reported an unemployment rate of 2.9% for November, an increase of 0.1 percentage points from October.
Older workers are benefiting from a historically low unemployment rate. Now is the time to prepare for older workers’ higher risks in recessions.
Older workers least prepared for retirement are most likely to end up jobless in a recession. During the Great Recession, 16.1% of older workers without retirement plan coverage lost their jobs and either remained unemployed or retired involuntarily. Those with coverage fared better – 10.7% of those with a 401(k)-type defined contribution (DC) plan and 8.5% of those with a defined benefit (DB) plan were unable to find a new job.
Even workers on track for a secure retirement aren’t out of the woods. If they lose their job, they are likely to stop saving for retirement and may have to draw down assets prematurely, putting them at risk of outliving their wealth.
To protect older workers from the effects of unemployment or involuntary retirement, including downward mobility and poverty, we need to ensure workers have bargaining power. Bargaining power allows older workers time to seek a good job, negotiate better pay and working conditions, or choose to take a dignified retirement.
To ensure a dignified retirement for all, we need to expand unemployment insurance, Medicare, Medicaid, and Social Security, and create Guaranteed Retirement Accounts (GRAs). GRAs ensure all workers a secure path to retirement by providing universal, secure retirement accounts. GRAs are professionally managed, funded by employer and employee contributions – paired with a refundable tax credit – and provide monthly benefits for life.
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.
