The “Great Resignation” didn’t apply to many older workers, a new study shows. Despite the rise in retirement during the first year of the COVID-19 pandemic, research shows that many older Americans were forced out of the workforce rather than voluntarily leaving.
Research conducted by the Schwartz Center for Economic Policy Analysis found that the number of older workers (ages 55 to 74) who lost their jobs in the beginning of the pandemic and ultimately retired due to unemployment significantly increased.
In March 2020, 35 million older workers were employed. Within a month, at least 3.8 million of those workers lost their jobs. This represents 11 percent of all workers in this age group. However, the retirement rate at this time was only two percent, consistent with normal trends.
In the spring of 2021—about a year into the pandemic—the number of people who retired after being unemployed increased more than 10-fold compared to pre-pandemic times. Out of the 3.8 million older workers who lost their jobs in April 2020, 400,000 of them retired involuntarily a year later. To illustrate the significance of this mass retirement, under normal circumstances, 180,000 workers in this cohort would suffer job loss in a given month and 30,000 of them would retire one year later.
Ageism in the workplace
These results suggest that ageism may be playing a role in older workers’ layoffs and their lack of success in finding new jobs that fit their skills and experience. Although older workers tend to have higher salaries than their younger counterparts, making them more expensive for employers, they also bring many benefits to an organization, such as a wealth of experience and knowledge that younger employees can learn from. It is important for workplace leaders to recognize any issues of ageism, and include ageism in the organization’s diversity, equity, and inclusion (DEI) strategy.
The report from the Schwartz Center for Economic Policy Analysis outlines five policy recommendations that companies can implement to support older workers and prevent ageism. The recommendations are:
- Create a Federal Older Workers Bureau (OWB)
The report states, “An effective OWB fulfills three functions: identify and analyze issues of concern for older workers, devise innovative policies to address these issues, and engage in outreach and education.”
- Enforce Anti-Discrimination Laws
The report encourages Congress to strengthen the Age Discrimination in Employment Act (ADEA), which was weakened by a 2009 US Supreme Court decision. ADEA is meant to prevent age discrimination when evaluating candidates and in the workplace.
- Lower Medicare Eligibility age to 50 and make Medicare first payer
The report argues that lowering the Medicare age to 50 would ensure laid-off older workers still get the care they need. Additionally, by making Medicare first payer, Medicare would cover medical expenses before private insurance, lowering the employer’s costs of providing health insurance to older workers.
- Advance workers’ bargaining power
The report supports expanding unions to help older workers have better access to high-quality health care and ensure safe work environments.
- Make work more age-friendly
Lastly, the report states that improving health and safety standards and providing paid sick leave will improve workplaces for everyone, including older workers.