By Terri Eyden
According to a recent study done by the United States Government Accountability Office (GAO), the number of workers age fifty-five and over who are experiencing long-term unemployment has grown substantially since 2007, which raises concerns about how long-term unemployment will affect older workers' reemployment prospects and future retirement income.
In its study, the GAO examined:
- How older workers' employment status has changed since the recession,
- What risks unemployed older workers face and what challenges they experience in finding reemployment,
- How long-term unemployment could affect older workers' retirement income, and
- What policies might help older workers return to work and what steps the Department of Labor has taken to help unemployed older workers.
- In December 2011, the unemployment rate for older workers was 6.0 percent, up from 3.1 percent at the start of the recession, but down from its peak of 7.6 percent in February 2010.
- By 2011, 55 percent of unemployed older workers had been actively seeking a job for 27 weeks or more.
- While younger workers have had the highest unemployment since the start of the recession in 2007, older workers have seen the biggest increases in long-term unemployment.
- Only a third of older workers displaced from 2007 to 2009 found full-time work by 2010, and those who did had greater earnings losses than reemployed younger workers.
- Long-term unemployment can put older workers at risk of deferring needed medical care, losing their homes, and accumulating debt.
- Employer reluctance to hire older workers is a key challenge that older workers face in finding reemployment.
- Out-of-date skills, discouragement, depression, and inexperience with online applications are reemployment barriers for older workers. Providing the type of assistance some older workers need to address these unique challenges can be very time-consuming.
Long-term unemployment can substantially diminish an older worker's future retirement income in several ways:
- It can force a worker to stop working and stop saving for retirement earlier than the worker had planned.
- It can lead individuals to draw down their retirement savings to cover living expenses while they are unemployed
- It can motivate older workers to claim early Social Security retirement benefits, which will result in lower monthly benefits for workers and their survivors for the rest of their lives.
The GAO report â Unemployed Older Workers: Many Experience Challenges Regaining Employment and Face Reduced Retirement Security â is available for download.
While the Age Discrimination in Employment Act of 1967 protects individuals who are forty years of age or older from employment discrimination based on age, worker advocates say greater education and outreach is needed as employers continue to discriminate against the mature workforce.
Perhaps Singapore is on to something: Starting in 2012, Singapore employers will be required by law to offer reemployment to workers who have reached the current statutory retirement age of 62. Rather than raise the retirement age, the government has formulated the legislation as a more flexible way to extend employment to older workers, initially to age 65 and later to age 67.