GENS_Fall2019

The Future of Work and Older Workers FALL 2019 volume 43 number 3

Journal of the American Society on

The Future of Work and Older Workers

Older worker exploitation: magnitude, causes, and solutions Socioeconomic barriers to working longer

Policy solutions for the retirement crisis

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

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GENERATIONS – Journal of the American Society on Aging

ASA Leadership Awards

2 | Fall 2019 Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join. Awards will be presented at the 2020 Aging in America Conference, March 24-27, 2020, in Atlanta. Visit www.asaging.org/awards for information and to submit a nomination. Awards Open to All Professionals in the Field of Aging • Hall of Fame Award (preference may be given to current ASA members) • Graduate Student Research Award • MindAlert Award Awards Open to ASA Members Only • ASA Award • Gloria Cavanaugh Award for Excellence in Training and Education • Mental Health and Aging Award (MHAN) • Award for Excellence in Multicultural Aging (NOMA) • Award for Religion, Spirituality and Aging (FoRSA) Nominations will be accepted until October 18, 2019. Recognizing Leaders in Aging ASA takes pride in recognizing leaders in the field who contribute to the success of ASA and the field at large. Nominate yourself or a colleague for one of the awards below!

is the quarterly journal of the American Society on Aging.

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GENERATIONS – Journal of the American Society on Aging

ASA Executive Committee Chair, Board of Directors Karyne Jones, Washington, DC Chair-Elect Michael Adams, New York, NY Immediate Past Chair Robert B. Blancato, Washington, DC Secretary Jean Accius, Washington, DC Treasurer Lisa Gables, Alexandria, VA ASA Board of Directors Ginna Baik, San Diego, CA Connie Benton Wolfe, Fort Wayne, IN Richard Browdie, Cleveland, OH Yanira Cruz, Washington, DC Robert Espinoza, New York, NY Paul Downey, San Diego, CA Brian M. Duke, Radnor, PA Maria Henke, Los Angeles, CA Brooke A. Hollister, San Francisco, CA Karen N. Kolb Flude, Chicago, IL Daniel Lai, Hong Kong Rebecca C. Morgan, Gulfport, FL Scott Peifer, San Francisco, CA Kevin Prindiville, Oakland, CA Deborah Royster, Washington, DC Phil Stafford, Bloomington, IN Joyce Walker, Richmond Heights, OH Interim CEO Cynthia D. Banks, San Francisco, CA

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2 | Fall 2019

The Future of Work and Older Workers

ins ide generat ions The Future of Work and Older Workers

the cos t s of working longer 63 Older Workers and the Declining Rate of Return to Worker Experience By Richard W. Johnson 71 Extended Work Lives and the Rediscovery of the ‘Disadvantaged’ Older Worker By David Lain and Chris Phillipson 78 Policy Levers May Improve Older Workers’ Perceptions of Their Psychosocial Work Environment By Lauren L. Schmitz, Courtney L. McCluney, Amanda Sonnega, and Margaret T. Hicken 86 Changing Our Frameworks Can Help

4 Our Guest Editors Teresa Ghilarducci and Siavash Radpour 6 Older Worker Exploitation: Magnitude, Causes, and Solutions By Teresa Ghilarducci and Siavash Radpour older workers and the l abor market 11 The Time Is Now to Focus on Older Workers: Trends in Employment and Wages By Michael Papadopoulos 14 Bargaining Power Is Falling for America’s Older Workers By Teresa Ghilarducci 21 Older Workers, Precarious Jobs, and Unemployment: Challenges and Policy Recommendations By Carl E. Van Horn and Maria Heidkamp 29 The Right to Work and the Right to Retire: A Political Economy Perspective on Precarity By Carroll L. Estes and Nicholas B. DiCarlo 35 Retirement Insecurity and the Rise of the Grey Labor Force By Katherine S. Newman cha l l enges to par t i c ipat ion in the l abor market 42 Socioeconomic Barriers to Working Longer By Alicia H. Munnell 51 Age Discrimination in the U.S. Labor Market By David Neumark 59 Age Discrimination Laws, Physical Challenges, and Work Accommodations for Older Adults By Joanne Song McLaughlin

Parse Racial Disparities in Stress-Related Morbidity By Kyle K. Moore 90 How Monopsony Impacts Older Women Workers By Kate Bahn

prepar ing for the future : new s t rateg i es and pol i c i es 93 When Millennials Become Older Workers By Helaine Olen 98 Policy Solutions for the Retirement Crisis By Monique Morrissey

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

Volume 43 . Number 3 | 3

GENERATIONS – Journal of the American Society on Aging

Our Guest Editors America in (Retirement) Crisis: What Does the Future Hold for Our Nation’s Older Workers? F all 2019 Generations Guest Editors Teresa Ghilarducci and Siavash Radpour work together—Ghilarducci

Radpour rues the fact that his gen- eration is starting out on the wrong foot when it comes to saving: “Many of my friends, especially those who work in part-time, freelance, precarious jobs, have no retirement savings, or even the means to start saving now.” In addition to co-guest-editing this issue of Generations , with articles writ- ten by economists and employment experts voicing new strategies to miti- gate America’s work and retirement woes, Ghilarducci is writing her ninth book, Second Thoughts About Working . It is “a scholarly rendering of the costs and benefts of continuing American policies dedicated to the belief that older people working longer is a perfect ‘free lunch’ policy solution,” she says. But when others wonder what is wrong with pushing policies for older people to work longer, instead of rais- ing pensions, Ghilarducci has a ready answer: “Plenty. Most older people who are working are barely earning enough to supplement poor pensions and low Social Security benefts; and most peo- ple claim Social Security while they are working in order to supplement low pensions and never get the gold-plated delayed retirement credit.” This all proliferates in a climate where out of the 11.4 million jobs expected to be added to the U.S. econ- omy by 2026, 6.4 million will be flled by workers older than age 55. And the

directs the Retirement Equity Lab (ReLab) at The New School for Social Research’s Economics Department, and Radpour is a research associate at RELab, both in New York City. They share a passion for remodeling the U.S. retirement system and how people work. Inspired to help the millions of American adults who have no savings, these two economists are well-versed in our nation’s history of savings plans and structures, and are acutely aware of human behavior when it comes to sav- ing (or not). Ghilarducci and Radpour know there are better ways to work and to retire (for instance, in countries with regulated labor markets, stronger bene- ft protection from unions, pensions, and employer responsibility for retirement), and are persistent in their efforts to per- suade the government to pay attention to America’s “retirement crisis.” They also are personally motivated to fx the system. Ghilarducci wants to prevent older adults from experiencing what her family endured: “My mother was forced to work until age 70, selling classifed ads, plugged into a phone. I believe that after a lifetime of work, peo- ple deserve to have a decent pension.”

Adequate pensions can mitigate elderly poverty. TERESA GHILARDUCCI

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

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The Future of Work and Older Workers

annual number of 65-year-olds who are poor or near poor is set to increase 146 percent between 2013 and 2022. “Ade- quate pensions can mitigate elderly poverty,” says Ghilarducci. “But this current situation creates desperation.” The much-touted gig economy may be flexible and convenient for a certain percentage of workers, but it is not the panacea it was made out to be. “The gig economy is here to stay and will only expand,” says Radpour. But if workers cannot depend upon employers to pro- vide retirement plans, and workers do not—or cannot—save enough to prepare for retirement, then how to solve for longevity risks? “As the employer−employee relation- ship weakens—and eventually disap- pears—the government should be more involved in providing protection to all workers, especially older workers, who are more vulnerable,” Radpour says. “People can work longer only if they’re healthy enough to work, and if there are decent and well-paid jobs for them.” Radpour believes that if the gov- ernment would pool risks and costs, it could make the labor market more reli- able and create a retirement system that works for everyone: “We need an insti- tution—let’s call it the Bureau of Older Workers—at the U.S. Department of Labor—to research and rethink work at older ages and retirement, design poli- cies and regulations, and advocate for elders’ rights during their working years and into retirement.” Ghilarducci senses some positive movement: “The need to solve the retire-

ment crisis is defying today’s political divisiveness by giving us a rare exam- ple of bipartisanship. In early 2018, four experts of varying political stripes, including me, called for the creation of mandatory retirement savings accounts: I did so in Rescuing Retirement (New York: Columbia University Press, 2018), with co-authors Tony James and Timothy Geithner; Jason Fichtner, a former Bush

Administration econo- mist did so at the Aspen Institute (tinyurl.com/ y344x8x6); and Third Way (tinyurl.com/ y62t9omt), a centrist Democratic think tank, did so in one of their reports.”

People can work longer only if they’re healthy enough to work, and if there are decent, well- paid jobs for them. SIAVASH RADPOUR

She thinks more pensions and a shored up Social Security system are the answer and she knows the public is on board—Social Security is highly popular (tinyurl.com/q5sehmp), and is considered efficient and effective, (especially in con- cert withMedicare andMedicaid). “And while there are signifcant dis- agreements on the details of how to res- cue retirement, [the bipartisan accord] is nothing less than a sign of the growing political will to take bold action to ensure workers can retire and our retirees can stay out of poverty,” says Ghilarducci. Radpour notes that though “the recent calls for expansion of Social Security are timely and helpful, the government is still missing a compre- hensive policy toward aging and main- taining living standards at older ages.” —Alison Biggar and Alison Hood

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

Volume 43 . Number 3 | 5

GENERATIONS – Journal of the American Society on Aging

Older Worker Exploitation: Magnitude, Causes, and Solutions By Teresa Ghilarducci and Siavash Radpour

A realistic look at the disempowered status of America’s older workers and their rocky path to a secure retirement.

P eople older than age 55 will fll 7 million of the 10 million new jobs created between 2016 and 2026. Working longer seems to be the solution to many, if not all problems related to retirement—it is supposed to be good for older adults’ physical and mental health and to pro- vide them with a community. It also could help compensate for inadequate retirement savings, and even fx future fnancial shortfalls in the Social Security system. But many of these so-called advantages to working longer have been proven to be incorrect, and others are infeasible or harmful to at least parts of the older adult population. And even if these benefts were real, working longer negates the idea of retiring at all, shrinking the years during which people could be in retirement. Eliminating retirement is not the same thing as solving retirement income security. In prac- tice, telling someone to work longer ignores the fact that working at older ages is mostly a deci- sion made by employers, not by workers. Most retirees say they left the labor force at a younger

age than they had originally hoped they would (Gosselin, 2018; and see Johnson’s article in this issue, page 63). Experts and policy makers must come up with a better solution than merely to advise people to work longer so as to improve their quality of life in older age. One oft-stated advantage to working longer is that people delay claiming Social Security and receive a guaranteed 6.75 percent to 8 percent increase in benefts for each year they hold off on claiming benefts. But this advantage is available only to those who can afford to wait—meaning those who are already fnancially well off. About 1 percent of Social Security claimants claim ben- efts at age 70, and 45 percent of older workers (authors’ calculation from the Health and Retire- ment Survey ) claim benefts while working—pos- sibly to give themselves a raise! If working longer was such an obvious solu- tion to retirement challenges, and yields substan- tial benefts for older adults, then why aren’t there more of themworking until age 70 and claiming benefts? The answer is that the workplace may

abstract Most workers filling new jobs in the next decade will be older than age 55. Improving their pay is the most effective way to encourage work and to not lower their income. Cutting social insurance benefits to incent elders to work longer can force many of them to job-search in a hostile market. Also, the collateral damages of disability and morbidity, which could be caused by older people working to age 70, must be acknowledged. Work is good, and many Americans like it, but working in a job with the benefit of a secure pension is obviously preferable to taking a job offering decreased benefits. | key words : retirement, pensions, older workers, bargaining power

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

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The Future of Work and Older Workers

not be as friendly to older workers as advocates for working longer might have hoped.

Also, in 2000, the earnings test past full retire- ment age was eliminated. Eliminating manda- tory retirement was also meant to keep older workers in the labor force for a longer duration. In practice, however, these policies do not work as intended. Sticks to work longer are effec- tive for some, but brutal to others. Employers have practically eliminated retiree health plans, which used to encourage work at older ages. Eroding pension security and increased housing and health expenditures encourage work at older ages for people who are too desperate to fully retire. And collecting Social Security at age 62, at a reduced beneft, could encourage some peo- ple to work longer. Unfortunately, age discrimi- nation in those growing sectors offering good ‘Eliminating retirement is not the same thing as solving retirement income security.’ jobs, especially in fnance and technology, has discouraged work and made working longer less rewarding than it would have been previously. The most signifcant force pushing older people out of the labor market is not workers’ unwillingness to work (or labor supply side), but the industrial restructuring and downsizing that puts older people at risk (labor demand side). Older workers face considerable obstacles to work in the form of ageism, age discrimination, lack of training, and flexible jobs. The United States does not have the activist, pro–older work- ers systems that some European countries pro- vide, such as incentives for phased retirement. Financial incentives and the current work envi- ronment in the United States would have to evolve to ensure older people would not be too expensive to hire. Older workers would need flex- ibility in work hours and continual training to keep skill sets current. Changes to social norms, Employer Policies that Can Keep Older Adults Working

Disincentives to Work Longer Are Plentiful Much of the economic literature on work later in life concentrates on disincentives for older peo- ple to keep working. Specifcally, this cohort will give up Medicare benefts and be exposed to an earnings test (below the age inaccurately called “full retirement age”—age 67 for those born after 1960), which places a high implicit cost on work- ing. The literature, though, overemphasizes the impact of these “sticks,” or the negative impact Social Security benefts have on discouraging work. For one, Social Security benefts keep accruing past age 62, and benefts are based on average monthly income, which is based on the highest earnings in thirty-fve years of work, no matter how long one has been employed. In the United States, age 70 is the full retire- ment age, the age at which benefciaries can col- lect their maximum benefts. Any claim before age 70 incurs a penalty. Collecting at age 62 reduces the beneft by 35 percent, and penalties decrease as claims ages grow. The idea behind this policy is that the penalties for retiring and claiming benefts prior to age 70 will encourage Americans to work longer. But half of Americans retire at age 65, and only 71 percent of Americans claim their Social Security benefts when they retire. About one- ffth of workers claim benefts at earlier ages while they are still working, in order to boost their incomes. These workers never receive any beneft from delaying their claims (authors’ cal- culations). The increase in benefts (or penalties, in the case of early retirement) should provide enough incentives for older workers to stay in their jobs. Changes in pension design also have encour- aged more work among older adults, but shift some risk to workers. Defned beneft plans on balance encourage retirement because the abil- ity to accrue benefts after, say, age 65, is limited. There are no limitations in 401(k)-type plans.

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

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GENERATIONS – Journal of the American Society on Aging

especially ageism, and a determination to end illegal age discrimination would have to occur for older people to successfully work longer. Some new policies—potential “carrots”—that could induce employers to hire older workers and induce older people to keep working include making it cheaper to hire older workers by re­ ducing the Medicare eligibility age to 62, and making Medicare the frst payer for employer health insurance. These strategies would allow employers to save thousands by including older workers in employee health plans. Other policy recommendations to increase older adult labor force participation would be to protect older workers against age discrimination in hiring, promotion, and training; but currently there is no bipartisan support for a comprehen- sive bill, and thus little chance for anything to pass. The most promising legislation is narrow in scope. The Protecting Older Workers Against Dis- crimination Act, which passed the House in June, would reverse a 2009 U.S. Supreme Court deci- sion and would make it easier for individuals to successfully challenge age discrimination in court. To fully engage older workers on an equal basis, what is needed are proactive and preventive poli- cies, not merely rules enabling defensive lawsuits. Improving pay for older workers also could help encourage them to work. Raising the mini- mum wage and lowering barriers to unionization would make work more attractive to older work- ers. Expanding the earned-income tax credit to people who have no children and raising the minimum wage may increase the household income of working older households. Last, collateral damage from increasing dis- ability and morbidity caused by older people working to age 70 must be acknowledged. Work is good, and many Americans like it. Anyone who loves to work should be able to do so. The bene- fts of secure and adequate retirement programs extend to groups not often thought of as beneft- ing from pensions: the young, employers, tax- payers, and the economy as a whole. However, penalizing retirement will hurt those who are

not accepted by the labor market, or those whose situations, health-related or otherwise, do not allow for working longer. In this Issue In this Fall 2019 issue of Generations , the ffteen articles that follow, in four sections, explore the implications of older people having to work lon- ger to overcome the steady erosion of retirement income security that has occurred across the past thirty years. Most authors represent the discipline of economics, with one journalist in the mix. The central question addressed in this issue is how can the vast majority of the 18 million peo- ple approaching retirement age between 2018 and 2028 expect to rely only upon Social Security benefts (the average beneft is $1,300) in old age? ‘The right to work should be expanded to include the right to retire after a lifetime of working.’ About half of workers reaching age 60 in 2018 have a 401(k)-type plan or IRA with an median balance of $92,000, and about half of these older workers have no retirement savings at all. Section one lays out the landscape of the older worker labor market: their pay and work- ing conditions, and how their bargaining power has changed. Though social policy presupposes the goal that every adult who wants to work will have a job, some social theorists defne work as a “right,” to be coupled with the aspiration to eliminate barriers faced by adults who want to work in old age. The right to work should be expanded to include the right to retire after a lifetime of working. In the frst article, Papadopoulos (page 11) describes the growing inequality in compensa- tion for older workers by gender, race, and edu- cation levels. Older workers are employed in growing and shrinking sectors, and are more likely to be in low-paying traditional jobs and jobs with contingent characteristics.

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

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The Future of Work and Older Workers

Ghilarducci (page 14) addresses power in the labor market and why older workers have been losing bargaining power. Policies that strengthen older workers’ fallback positions—enhanced unemployment benefts for laid-off older work- ers or programs such as a universal pension plan like the Guaranteed Retirement Account, which helps workers to accumulate retirement savings— would improve older peoples’ jobs (Ghilarducci and James, 2018). A Department of Labor Older Workers Bureau, similar to the Women’s Bureau formed in the 1920s, should be established to investigate the conditions of older workers and to formulate standards and policies to promote the welfare of wage-earning older people, while advancing opportunities for fairly paid employ- ment at a living wage. Van Horn and Heidkamp (page 21) address the fact that millions of older Americans work in precarious or part-time jobs with low wages and no benefts. The article also discusses involun- tary part-time work, pay rates, share of income coming from part-time work, and the gender and race of older part-time workers. The authors rec- ommend lifelong learning, increased enforce- ment of anti-age discrimination laws, and stronger social insurance. Estes and DiCarlo (page 29) view older workers from what they call an “emancipatory gerontology” perspective, and within the politi- cal-economy-of-aging framework. In this frame- work, policy debates and policy outcomes may be understood as socially constructed narra- tives, which means that all labels and problems regarding older workers should be contested and understood from a more general social and political point of view. Sociologist and writer Katherine Newman (page 35) describes the research for her book on how workers’ losses of promised pensions and lack of retirement readiness degrade individuals, hurt families’ living standards, and harm com- munity health. Section two examines the barriers facing older workers who need to work longer. Barri-

Many older workers face long unemployment periods and have to retire with insufficient resources. Alicia Munnell (page 42) is a longtime (but reluctant) advocate of people working longer to make up for eroding pensions and declining Social Security benefts. Social Security benefts are declining for two reasons: because Medicare ers to training and promotion mean that older workers are more likely to be laid off or pushed out because of persistent ageism and age dis- crimination. As a result, many older workers face longer unemployment periods and are left with no options other than to retire with insufficient resources. Both Neumark and Song McLaughlin (pages 51 and 59, respectively), describe the insidious practice of age discrimination. America is unique in its long tradition of having statutory protec- tions against age and disability discrimination. But the physical and mental conditions fac- ing older workers are becoming more difficult— should age discrimination laws take on some characteristics of the ADA and require accom- modation? Song McLaughlin cautions those who advocate for working longer to be mindful of persistent age discrimination. Neumark explains the uses of audit studies as the gold-standard for discrimination research. premiums are increasing and Medicare premi- ums are deducted from Social Security beneft checks; and because the normal retirement age has been increased from age 65 to age 67, which means a beneft for a cut for people collecting benefts at all ages. But Munnell worries that lon- gevity and health gains have disproportionately gone to the top of the socioeconomic status (SES) distribution. People at lower SES have lost union and bargaining power. Can the bottom third really work in jobs that match their abilities? The third section features articles examining the working conditions of older workers. Older

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Volume 43 . Number 3 | 9

GENERATIONS – Journal of the American Society on Aging

workers with adequate pensions and retirement savings have more bargaining power—their choice to work is because the benefts of work far outweigh the costs. But for workers without those assets, their choice to work longer is con- strained; though the benefts of working could be minimal and the psychological and health costs high, they would continue to work. Schmitz, a health economist working on genomics, and her colleagues McCluney, Sonnega, and Hicken (page 78) note that older workers’ mental health is affected by various workplace factors and correlated with SES. Bad jobs can lead to deteriorating mental health and an early exit from the labor force. But the good news is that there are ways workplace environments can be adjusted to improve workers’ perceptions of their psychosocial environment and, consequently, their health and labor force attachment. Johnson (page 63) is perhaps the most well- known expert in this issue on the labor market for older workers. He updates his work (chill- ingly, frst presented immediately after the 2008 crisis), which shows that experience does not matter as it once did in the labor market. For this issue he updates that paper, concluding that the rates of return for seniority and experience con- tinue to fall, while older workers’ wages do not grow proportional to their experience. Phillipson and Lain (page 71) are two pro- lifc writers in the area of “emancipatory geron- tology” and have sharp insight into why older workers are increasingly likely to be in low-pay- ing, insecure jobs with little control over their jobs’ pace and content. They use data gleaned from hospitality workers in England to show the negative effects of expecting people to work beyond traditional retirement ages when they have low levels of health and education and struggle to continue working in physically demanding jobs. Kyle Moore (page 86) complements Mun- nell’s work and addresses the effects of work upon older people from a stratifcation econom- ics point of view, taking into account their socio-

economic status and race. Black older workers are more likely to face high levels of stress at work, with severe health consequences. Kate Bahn (page 90) reviews how older women are exposed to employers’ monopsony power, which exploits workers by keeping wages low. The gender wage gap and women’s choices to work in low-wage industries eventually lead to inadequate retirement savings, which further reduce women’s bargaining power at older ages. Older women’s wages would be higher if they had more bargaining power. Section four describes how to move forward. Journalist Helaine Olen (page 93) envisions what the future of work and retirement will look like for Millennials and calls for a common- sense retirement income security policy. Finally, Monique Morrissey (page 98) outlines one such policy, the Guaranteed Retirement Account, which aims to solve the problem of inadequate retirement income, and to increase older work- ers’ bargaining power by giving them a way out of low-quality, low-paying jobs. Teresa Ghilarducci, Ph.D., is a labor economist and expert in retirement security. She is the Bernard L. and Irene Schwartz professor of economics at The New School for Social Research and the director of the Schwartz Center for Economic Policy Analysis (SCEPA) and The New School’s Retirement Equity Lab (ReLab) in New York City. Siavash Radpour, Ph.D., is a research associate at SCEPA. References Ghilarducci, T., and James, H. 2018. Rescuing Retire- ment . New York: Columbia University Press. Gosselin, P. 2018. “If You’re Over 50, Chances Are the Decision to Leave a Job Won’t Be Yours.” ProPublica , December 28. tinyurl.com/y46y6mpp. Retrieved July 12, 2019.

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

10 | Fall 2019

The Future of Work and Older Workers

The Time Is Now to Focus on Older Workers: Trends in Employment and Wages By Michael Papadopoulos

A “retirement crisis” looms, as the U.S. labor market becomes less friendly to older workers at a time when they are most numerous and least able to retire.

T he Bureau of Labor Statistics predicts that one in four workers in 2026 will be ages 55 and older, up from one in eight in 1990. For those who think older workers are just another special segment of the workforce, think again. Older workers will fll 56 percent of the new jobs created by 2026—6.4 million out of 11.4 mil- lion (Dubina et al., 2017). With older workers becoming a more prominent part of the labor force than ever before, the future of the U.S. economy depends upon whether it provides enough decent-paying jobs to these workers. Real wages for older workers have declined, and many of these older workers’ jobs are becoming more difficult to perform.

But recent data show that the U.S. economy is not meeting that goal. The position of older workers within the labor market is declining over time and relative to that of younger workers.

Fading Experience Premium, Low-Quality Jobs

Historically, experience paid. Older workers’ accumulated work experience once provided an experience premium. They earned higher wages and enjoyed faster wage growth than did younger workers; however, the experience premium is fading. Real wages for older workers have declined, and many of the jobs older work- ers have are becoming more difficult to perform. Workers ages 55 and older who have a high school degree earned 12 percent less in 2017 than such workers had earned in 1990, and wages for workers with a college education fell 8 percent in that time. In contrast, wages for workers ages

abstract The share of workers ages 55 and older is growing rapidly at a time when older workers’ wages are declining. This article identifies sources of older workers’ declining bargaining power, includ- ing four trends lessening that power: alternative work arrangements, the baby boom, age discrimination, and a deficient retirement savings system. With the labor market becoming less friendly to older workers, policy ought to be directed toward increasing older Americans’ financial preparedness for retirement, rather than toward compelling them to work beyond typical retirement ages. | key words : labor market, older workers, retirement, gig economy

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

Volume 43 . Number 3 | 11

GENERATIONS – Journal of the American Society on Aging

35 to 54 grew by more than 10 percent (Farmand and Ghilarducci, 2019). Moreover, the two jobs the Bureau of Labor Statistics projects will grow the fastest by 2026—personal care aides and home health aides—are low-paying jobs (24 per- cent earn less than $15 per hour) that dispro- portionately hire older women (37 percent are women older than age 55) (Retirement Equity Lab, 2019). ‘Older workers are losing the ability to bargain over key aspects of their jobs.’ Working conditions have not improved for older workers in recent years, either. The physi- cal demands placed on older workers are the same today as they were in the 1990s. In 1992, 17 percent of older workers said their jobs re­ quired lifting heavy loads. That rate remained high in 2014, at 15 percent. The share of workers in 2014 who reported frequent stooping, kneel- ing, and crouching was equal to what it was in 1992, at 27 percent. One in three older workers said their job required “lots of physical effort” in 2014 (Ghilarducci et al., 2016). Furthermore, older workers are losing the ability to bargain over key aspects of their jobs. More older workers are employed in alterna- tive work arrangements (AWA) than ever before. AWAs often require that workers give up the ability to negotiate pay (e.g., as applies to gig workers, such as Uber drivers), forego stable work schedules (e.g., in on-call jobs, usually seen in retail), or relinquish the possibility of pro- motions (e.g., as applies to contract frm work, seen in ancillary services such as security guard and food service jobs at a mall) in exchange for employment. The share of workers ages 55 and older in AWAs increased from 15 percent in 2005 to 24 per­ cent in 2017, more than four times the share of younger workers in AWAs. In fact, “94 percent of the net employment growth in the U.S. economy

from2005 to 2015 appears to have occurred in alternative work arrangements,” with older work- ers constituting almost all of the growth (Katz and Kreuger, 2016). What Caused the Decline in Job Quality? Why have many older workers’ jobs not improved and why might they be getting worse? Trends such as globalization, growing inequality, the decline of unions, and the rise of automation can partially explain absolute trends in older work- ers’ wages and working conditions. But there are three more factors responsible for the worsening of older worker employment standards. One explanation lies in the baby boom. The Baby Boom Generation earned lower wages than they otherwise would have simply due to their outsized birth cohort creating increased com- petition, an effect that persists even as they con- tinue working into their 60s (Papadopoulos, Patria, and Triest, 2017). At the same time, employers are engaging in more age discrimination than before. Be­ tween 2000 and 2017, proven cases of ADEA violations increased 53 percent, outpacing the growth of the older labor force in that time period (U.S. Equal Employment Opportunity Commission, 2019). Chief among these explanations concerns older workers’ ability to retire. The replace- ment of traditional defned beneft pensions with the 401(k) system has contributed not only to a decline in retirement plan coverage—from 68 percent in 1992 to 63 percent in 2010 among households ages 51 to 56—but also in lower pro- spective retirement income for older workers who have a plan (Munnell et al., 2016). Older workers with inadequate sources of income to draw upon in retirement not only lose out on Employers are engaging in more age discrimination than they were previously.

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

12 | Fall 2019

The Future of Work and Older Workers

a large bargaining chip, but also often work to avoid poverty in retirement, and take whatever work they can fnd. A Looming “Retirement Crisis” The labor market is becoming less friendly to older workers at a time when they are most numerous and least able to retire. These con- verging trends are contributing to an impending “retirement crisis”—where a large number of older workers will be forced to choose between working past typical retirement ages or retiring at risk of poverty. Those who continue working will be less likely to fnd the better quality jobs

akin to those they held before, and many workers will not have this choice due to disability (Haaga and Johnson, 2019). The U.S. Department of Labor and pol- icy makers must pay greater attention to these trends—U.S. policy should concentrate not only on encouraging older workers to work longer, but also on ensuring these workers are able to save for retirement and fnd decent jobs in their older age. Michael Papadopoulos, M.A., is a doctoral candidate in the Economics Department of the New School for Social Research, in New York City.

References Dubina, K., et al. 2017. “Projec- tions Overview and Highlights, 2016–26.” Monthly Labor Review (October) . tinyurl.com/ydeohyeg. Retrieved May 24, 2018. Farmand, A., and Ghilarducci, T. 2019. “Why American Older Work- ers Have Lost Bargaining Power” (SCEPAWorking Paper Series 2019–2). New York: Schwartz Cen- ter for Economic Policy Analysis. Ghilarducci, T., et al. 2016. Gender and Racial Gaps in Older Workers’ Physical Job Demands . New York: Schwartz Center for Economic Policy Analysis .

Haaga, O., and Johnson, R. W. 2019. The Long-term Impact of Dis- ability, Employment, and Mari- tal Status Shocks: Evidence from Matched Administrative Data. tinyurl.com/y3xfzjzx. Retrieved May 24, 2018. Katz, L. F., and Krueger, A. B. 2016. “The Rise and Nature of Alterna- tive Work Arrangements in the United States, 1995–2015.” Bos- ton: National Bureau of Economic Research. Munnell, A. H., et al. 2016. “Pen- sion Participation, Wealth, and Income: 1992–2010” (CRR Work- ing Paper 2016-3). Boston: Center for Retirement Research at Boston College.

Papadopoulos, M., Patria, M., and Triest, R. K. 2017. “Population Aging, Labor Demand, and the Structure of Wages.” The Geneva Papers on Risk and Insurance— Issues and Practice 42(3): 453–74. Retirement Equity Lab. 2019. “10+ Years of No Wage Growth: The Role of Alternative Jobs and Gig Work.” New York: Schwartz Cen- ter for Economic Policy Analysis . U.S. Equal Employment Opportu- nity Commission. 2019. “Age Dis- crimination in Employment Act (Charges fled with EEOC), FY 1997–FY 2018.” tinyurl.com/y4ck wylf. Retrieved May 24, 2018.

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

Volume 43 . Number 3 | 13

GENERATIONS – Journal of the American Society on Aging

Bargaining Power Is Falling for America’s Older Workers By Teresa Ghilarducci

Policy makers need to strengthen older workers’ fallback positions.

T he news is flled with heroic stories of impres- sive older people working for pay. In a heart- tugger of a profle, “Alice Pirnie of Broken Bow, Nebraska, keeps herself pretty busy” (Feldman, 2018), we read about a 90-year-old woman who has worked as a greeter and cashier at McDon- ald’s for 26 years. And, perhaps, around a holiday dinner table, your grandmother’s brother—Dr. Derek, age 79—could credibly say he continues to see patients because he likes it: the money does not matter. These stories pop up not because the idea of older people working is novel—the share of older workers in the labor force has doubled from 10 percent in the early 1980s—but because these people really love their jobs. A journalist with an economics background would have asked Alice about her fallback posi- tion, her situation if she did not work. “If you didn’t work at McDonald’s, in what state would your fnances be?” If Alice answered, “Oh, I don’t need the money, I have a large pension and Social Security,” it would mean her fallback posi- tion wasn’t poverty or a meaningful decline in

her living standards. Her choice to work was probably a genuine move toward engagement and passion. But, if Alice answered, “Without my wages fromMcDonald’s, I would skip dinner most nights,” we would assume she works for money, not for love. Her fallback position would be grim, which results in low bargaining power. How many older people are—and will be— working for money rather than love because of eroding retirement income (Ghilarducci, Webb, and Papadopoulos, 2017)? Will older workers have bargaining power if more older people work (and at older ages) because without wages, they face dire economic need and food insecurity? America’s Older Workers: Working Longer, with Less Benefit Older Americans already work more, and longer, and have less “retirement time” (my terminology for the time between retirement and death) than in most other G7 countries (i.e., Canada, France, Germany, Italy, Japan, and the United Kingdom). And, despite the markedly distinct sacrifce of

abstract Older workers need a good fallback position as leverage for a better job offer. As retire- ment income erodes, older workers lose bargaining power. A universal pension plan, like proposed Guaranteed Retirement Accounts, is a policy that strengthens the fallback position of older workers and improves older adults’ jobs. An Older Workers Bureau at the U.S. Department of Labor should be established to investigate older workers’ working conditions, to formulate standards and policies to promote the welfare of wage-earning older people, and to advance their opportunities for profitable and decent employment. | key words : older workers, retirement income, bargaining power

Copyright © 2019 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any formwithout written permission from the publisher: American Society on Aging, 575Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: info@asaging.org . For information about ASA’s publications visit www.asaging.org/publications . For information about ASA membership visit www.asaging.org/join.

14 | Fall 2019

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