Since the start of the economic debacle now being termed the “Great Recession,” many United States workers have found themselves unemployed for long periods. A new study shows that while layoffs were was more likely to affect younger workers, these employees were more likely to become reemployed. By 2011, more than a third of older unemployed workers had been jobless for more than a year. This disparity was worse for men, for less educated workers, and for minority workers. As reported here before, many older workers realistically face a future where they are too young to retire, but will never have a job again.
The study looks at possible reasons for the lingering unemployment, as well as the long-term effects on workers aging toward retirement age.
Age discrimination accounts for much of the reluctance to hire workers. Sometimes age discrimination is based on irrational fears that older workers will be less technologically proficient, expect higher wages, or will be unwilling to take direction from a younger manager. Sometimes, however, the refusal to hire people of a certain age relates to the increased health insurance premiums attributable to the addition of an older worker.
The persistently unemployed older age group will face lower social security benefits because social security is tied to the worker’s latest and lifetime earnings. Some people will retire early, and therefore commit to lower social security benefits for their lifetime. And by necessity, the workers may dip into savings earmarked for their retirement. Overall, this recession will continue to affect lives for some years. If the health care reform does not untie health benefits from employment, age discrimination is unlikely to fade away.