The persistent myth of the wealthy retiree took a hit recently when the Schwartz Center for Economic Policy Analysis (SCEPA) published a report predicting that 40% of older workers and their spouses will experience downward mobility in retirement.
SCEPA estimates the average older worker has only $15,000 saved for retirement.
An estimated 2.6 million middle class workers who retire at age 62, which is the most common age for retirement, will actually fall below the poverty level – $11,670 for an individual and $15,730 for a two-person household.
About 5.9 million will teeter into near poverty, which is 200% percent of the federal poverty level. They will have an annual income of $23,340 for singles and $31,260 for couples.
So why don’t these folks just keep working? According to SCEPA, many older workers are unable to delay retirement due to poor health and the inability to withstand the physical demands of work. Others have difficulty finding jobs with decent pay. Some workers who must keep working into old age may die before they can retire.
The solution, SCEPA says, is to strengthen Social Security and create Guaranteed Retirement Accounts.
An ugly “class” issue lurks beneath the argument that older workers should be forced out of the workplace so that younger workers can have their jobs.
The argument is often made by people who enjoy professional status, earn big bucks and look forward to comfortable pensions. Not by ordinary working stiffs.
This is the case in a recent essay in the Wall Street Journal by two law school professors from the University of Chicago, Saul Levmore, who is around 63 years of age, and Martha Nussbaum, who is 70.
They claim, without citing any supporting data, that the productivity of workers declines after age 50. Performance may decline in some areas for some workers (i.e., quarterbacks and major league pitchers) but aging is individualistic and not uniform. Should we also assume that all women want to be mommies and all men can bench press 500 pounds?
They argue the law should allow employers and employees “to agree” on a retirement age at the start of a new job, so the workers can be terminated “after a certain age” without cause. Don’t they know that few, if any, workers would voluntarily agree to such an onerous contract term. That these contracts would be based on age discrimination and signed under duress.
Why would the Wall Street Journal shine its spotlight on an essay that fails to show any understanding for the plight of older workers or the reality of age discrimination in the workplace? Possibly because six corporations own 90 percent of the media today and these corporations engage in age discrimination.
Ironically, the Age Discrimination in Employment Act of 1967 initially permitted colleges and universities to involuntarily retire tenured professors at age 65. How would Levmore and Nussbaum feel about being forced to hand their posh jobs over to deserving young PhDs? Continue reading “Classism and Forced Retirement”
Not everyone may agree that this month – which is Older Americans Month – is “the perfect time to celebrate what getting older looks like today.”
The U.S. Department of Health and Human Services tells us the theme of 2017 Older American’s Month is “Age Out Loud” to “give aging a new voice—one that reflects what today’s older adults have to say.”
Here goes …
A lot of the older Americans I know are fraught with anxiety, most recently focused on President Donald Trump’s proposed revised healthcare plan. An estimated 25 million older Americans currently live on the edge. They fear our billionaire president and the Corporate lackeys in Congress will dump them into a penurious old age and premature death by limiting their access to quality health care.
Meanwhile, Congressional inaction continues to allow American employers to drive older Americans out of good jobs in their 40s and 50s through epidemic and unaddressed age discrimination in employment.
The Age Discrimination in Employment Act of 1967 (ADEA) was weak when it was adopted 50 years ago when compared to Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, sex, religion, gender and national origin. Since then it has been eviscerated by the U.S. Supreme Court, which has made it almost impossible to win a federal age discrimination lawsuit.
Unemployed older Americans are forced to spend down their savings and work in low-paid gigs or part-time jobs until they are 62 and qualify for Social Security, which will mean they receive significantly lower benefits for the rest of their lives compared to richer folk who can wait longer to retire.
Women fare the worst in our rigged system. The National Council on Aging says women make $4,500 less annually in Social Security than men due to lower lifetime earnings, time taken off for caregiving, occupational segregation into lower wage work, and other issues. Older women of color fare worst of all. (SSA, 2015).
The NCOA estimates that the more than 25 million Americans aged 60+ who are economically insecure struggle with rising housing and health care bills, inadequate nutrition, lack of access to transportation, diminished savings, and job loss. For older adults who are above the poverty level, the NCOA states, one major adverse life event can change today’s realities into tomorrow’s troubles.
2017 marks the 50th anniversary of Public Law 90-202, The Age Discrimination in Employment Act of 1967 (ADEA), enacted on December 15, 1967.
But there is little to celebrate.
For 50 years, America’s older workers have been denied equal protection from unfounded and harmful discrimination in employment.
Federal law today not only fails to protect older workers but effectively allows employers to drive older workers out of well-paying jobs in their 40s and 50s and then out of the workforce altogether in their 60s. This has led to unemployment, underemployment and poverty in old age for many older Americans, especially for women.
The ADEA is the frail stepsister of Title VII of the Civil Rights Act, which was passed three years earlier to protect job applicants, employees and union members from discrimination on the basis of race, sex, color, national origin and religion. Age was proposed for inclusion in Title VII but was omitted when Congress decided more study was needed about the nature of the problem.
Congress gave mere lip service to prohibiting age discrimination. The substantive part of the ADEA was patterned after Title VII but the ADEA includes gaping loopholes, such as permitting “reasonable” discrimination against older workers and allowing mandatory retirement of public safety workers, state elected officials and high-placed business executives.
Unlike Title VII, the damages part of Title VII is patterned after the Fair Labor Standards Act of 1938, a federal law that regulates the payment of minimum wages and overtime. As a result, victims of age discrimination in employment are treated as if they were shorted on their paycheck and not as workers who suffered grievous and long-lasting injury. The ADEA does not permit a court to order an employer to pay punitive or compensatory damages to an age discrimination victim. The most a victim can recover is twice the amount of monetary loss suffered (if no monetary loss was suffered, the victim and his/her attorney get nothing).
If that wasn’t bad enough, the gap between the ADEA and Title VII has grown much wider over the years as a result of misguided decisions by pro-business federal courts. It is now much more difficult to prevail in an ADEA case than a Title VII case. One appeals court has even ruled that job applicants aged 40 and above are completely without protection from discrimination on the basis of age.
In addition, the Obama administration made the situation much worse when he signed an executive order that permits age discrimination by federal agencies.
A new year marks a new beginning.
One can hope the Trump administration will reverse President Obama’s discriminatory executive order permitting age discrimination by federal agencies.
One can hope the U.S. Congress and the federal courts will – at the very least – take steps to insure that older workers receive the same rights and protections as other discrimination victims. If repeal of the ADEA is not possible this year, Congress should at least pass the Protecting Older Workers Against Discrimination Act, first proposed more than a decade ago. The POWADA would reverse a particularly disastrous decision by the U.S. Supreme Court in 2006.
Hope, of course, is an unreliable vehicle for change. We must demand action. Action is long overdue.
The 2015 White House Conference on Aging released its final report Tuesday without mentioning rampant age discrimination in employment or the financial plight of older Americans caused by the collapse of Wall Street.
Celia Munoz, director of the Obama administration’s Domestic Policy Council, congratulated the Obama administration for accomplishing a “great deal” while recognizing there is still much more work to do. Munoz assures us that a “better informed vision for aging in America” emerged from the Conference.
To some, the conference was a disappointing public relations event. The Obama administration partnered with the AARP, which actually organized regional events. The AARP is the nation’s leading purveyor of Medi-gap health insurance to older adults. Not surprisingly, a major theme of the Conference was healthy aging.
Conference organizers completely ignored repeated pleas to examine the link between elder poverty, the on-going epidemic of age discrimination in hiring and the disappearance of defined benefit pensions.
Some of the Conference’s highly-touted initiatives come far too late to help older adults today. For example, Obama proposed a portable retirement account that workers can take from job to job and a law requiring financial advisers to act in their clients’ best interests.
An alarming percentage of America’s older adults today literally have no money, having lost jobs, homes and savings in the financial meltdown.
The Social Security Administration estimates the average Social Security benefit is $13,000 a year, from which Medicare payments are then deducted. For 36 percent of recipients, Social Security provides 90 percent or more of their income. For 24 percent of recipients, it is the sole source of retirement income.
The White House has held a Conference on Aging every decade since 1961. The 2015 Conference was a shell of its predecessors because, according to the administration, Congress failed to allocate sufficient funds for the event. In the past, delegates from around the country converged in Washington, D.C., to discuss ways to improve the quality of life of older Americans.
It seems more likely that the plight of older adults is simply not a priority for either Congress or the Obama administration.
There is little for older workers to celebrate this Labor Day 2015.
In recent months, the Obama administration has escalated its unprecedented assault on the nation’s leading law prohibiting age discrimination in employment, the Age Discrimination in Employment Act of 1967, blatantly favoring unemployed younger workers over unemployed older workers..
Here’s the status quo:
The U.S. government is actively engaged in age discrimination in the workplace. President Barack Obama in 2010 signed an executive order that permits federal agencies to discriminate against older workers. U.S. Labor Secretary Thomas E. Perez recently endorsed an effort by a coalition of America’s largest corporations to discriminate against older workers. No one seems to care.
Congress has failed for six years to pass the Protecting Older Workers Against Discrimination Act (POWADA). As a result, it is much more difficult for older workers to prevail in an age discrimination lawsuit than it is for workers who are victims of discrimination on the basis of race, sex (including sexual preference), religion and national origin.The POWADA would remove some of the ruinous damage that the U.S. Supreme Court inflicted on the Age Discrimination in Employment Act in 2009.
No group seems to be advocating for older workers in the halls of Congress. The AARP, which describes itself as the nation’s leading advocate for Americans aged 50 and above, has seen its profits skyrocket since Obamacare was passed. But older Americans have suffered from onerous co-pays and un-reimbursed medical expenses. At this point, almost half of Americans aged 65 and above are considered “economically vulnerable.” The AARP is the leading seller of medi-gap health insurance in the United States, and has increasingly expanded its offerings to include everything from new computers to telephones. But apparently the AARP is not making enough money to fight for the passage of POWADA (see above).
Older workers are disproportionately represented in the ranks of the long-term unemployed (those workers who have been looking for work for 27 weeks or longer).Unemployed older workers are twice as likely to be chronically unemployed. Many are forced to spend down their savings, work in low-wage part-time jobs and, ultimately, retire as soon as possible to obtain Social Security benefits. According to the Bureau of Labor Statistics: 22.1 percent of the unemployed under age 25 had looked for work for 27 weeks or longer in 2014, compared with 44.6 percent of those 55 years and older. One reason for this sorry state is epidemic and unaddressed age discrimination in hiring.
The Social Security Administration’s formula for dispersing Social Security benefits favors the rich and penalizes the poor (i.e. long-term unemployed who are forced into a penurious retirement due to age discrimination). Of course, women and minorities who have experienced career-long discrimination in the workplace suffer the most under this ancient benefits formula.
I went to a restaurant recently where a server, a man who appeared to be in his late 60s, had obvious hearing problems despite wearing a hearing aid. We had to repeat our food order and he forgot my wine (or perhaps never heard me order it). It made me think about the pressure that older workers are under to remain in the workplace as a result of the Social Security Administration’s discriminatory benefits formula.
The formula is rigged to benefit those who stay in the workplace the longest. If workers retire at age 62 – the earliest possible age – they suffer a 33 percent loss in their monthly benefit for the rest of their lives compared to workers who wait until age 66. If workers can hold out and retire at age 70 – the oldest retirement age in the formula – they will receive a benefit that is 75 percent higher than if they had retired at age 62.
The problem is that many, if not most, older workers have little real choice about whether they will remain in the workforce.
Voya Financial, Inc. recently released findings from a poll of 1,002 recent retirees that found 60 percent had to stop working unexpectedly. Thirty-three percent said they left their jobs involuntarily. Of this group, 16 percent had to retire because of health challenges, 11 percent lost their jobs, three percent had to stop working because they had to care for a spouse or dependent, and an additional three percent retired involuntarily because of their age.
Once an older worker is jobless, the chance that he or she will find new employment is almost nil due to epidemic, blatant and unaddressed age discrimination in hiring. These jobless older workers are forced to spend down their savings and work in low-paid part-time and temp jobs until they age into a financially ill-advised early “retirement.” The AARP reported in February that older job seekers represented 24 percent of the unemployed in March 2013 but 31 percent of the long-term unemployed. The AARP cited one study showing that only about one in nine long-term unemployed workers had steady full-time jobs 12 months later. Older non-Hispanic blacks had the highest rate of long-term unemployment (57 percent), followed by Hispanics (53 percent) and whites (47 percent). How ironic that these Americans are subjected to discrimination a second time – by the Social Security Administration!
The Social Security benefits formula penalizes the poor.
According to the report, pre-seniors between the ages of 50 and 64, may be particularly vulnerable as they are not yet of retirement age and thus ineligible for safety net programs like Medicare and Social Security.
Data such as this puts the problem of age discrimination in employment in context, Older workers are forced out of the job market by legalized age discrimination, and then cannot find decent new employment because of epidemic, blatant and unaddressed age discrimination in hiring. The result is hunger, homelessness, ill health as a result of skipped medical visits and unfilled prescriptions … poverty.
Problem Made Worse by Obama Administration
In an understatement, Matt Knott, president of feeding America, a nationwide organization of 200 food banks, states: “Every day for the next 15 years, 10,000 people will turn 65. This is absolutely the right time to be taking a hard look at the data to determine the challenges our mature clients face.”
Today, the once-every-decade conference will hold its signature event after months of low-level activity sponsored mainly by the AARP, America’s leading purveyor of health insurance to older Americans (not to mention vacation travel, car repairs, telephone and internet service, etc. etc.).
The WHCOA sent out emails Saturday detailing the agenda for the big event.
Apparently there was no time in the jam-packed schedule to discuss the financial havoc wrought upon older Americans by the worst recession in America in 100 years. Similarly,it does not appear the conference will address the epidemic of age discrimination in hiring that relegates older workers to chronic unemployment, low-paid work and a financially improvident “early retirement.” It’s almost as if this unpleasant chapter of American history, attributable to Wall Street pirates who were never prosecuted, never happened.
The conference will focus on care-giving, “planning for financial security at every age,” nutrition, “the power of inter-generational connections and healthy aging,” universal design and technology and the future of aging.
To add insult to injury, the organizers of the WHCOA are asking Americans to complete this sentence: “Getting older is getting better because …”
I am pleased to note that my article, Age Discrimination and Elder Poverty, is featured on ChangingAging, a multi-blog network committed to challenging conventional views on aging and using social media to promote the equality, sustainability, health and well being of people of all ages. The blog was founded by Dr. Bill Thomas, a physician and playwright whom the Wall Street Journal called one of the nation’s “top 12 innovators” in changing the future of retirement in America. Dr. Thomas, who is a founding faculty member of UMBC’s Erickson School of Aging , is embarking on a national speaking tour called Age of Disruption.
* Originally published on April 30, 2015 at abusergoestowork.com.