It’s not just “the Great Resignation.”
Yes, some people have quit their jobs in the wake of the pandemic from a position of strength, and are going off to do other, better things.
But many others are out of work for another, less happy reason. They got laid off to save their employers money. In many cases they’re poor, they’re older, and they’ve been effectively driven into early retirement—whether they want it or not.
The pandemic retirement surge has “increased retirement inequality,” according to findings from researchers Owen Davis, Bridget Fisher, Teresa Ghilarducci and Siavash Radpour at the Schwartz Center for Economic Policy Analysis at the New School for Social Research.
At least 1.7 million extra older workers have retired early as a result of the pandemic, they find. But the big jump in retirement over 55 isn’t among the rich and the educated. On the contrary, “vulnerable older workers retired sooner, while more privileged workers delayed retirement,” they write. “The share of retired workers among adults aged 55-64 rose 5% for those without a college education but fell 4% for those with a college degree.” The fastest jump was among Black workers over-55 without a college degree.
According to a survey by the New York Fed, the percentage of workers expecting to work beyond ages 62 and 67 are down to their lowest levels since they began tracking the numbers seven years ago. Just 50.1% of those still working now expect to be employed beyond age 62, and 32.4% beyond 67. But in both cases the biggest drops were among those without a college degree.
According to the New School, in 2019, older workers without a college degree had median household retirement savings of…$9,000.
For those with a college degree the figure was almost 19 times as much.
During the pandemic, “retirement rose at all ages for workers without a college degree, despite their lack of retirement savings, because workers in this group face worse employment prospects than their college-educated counterparts,” write the New School’s researchers. “At the height of unemployment in April 2020, workers 55 to 64 without a college degree were 67% more likely to experience unemployment than college-educated older workers,” they add. Such workers were laid off at higher rates than those with better-paid jobs, and are finding it harder to get new ones, they say.
And new research from the New School finds that from 2010 to 2018, 55% of workers age 55 and over in the bottom half of the income distribution were forced out of the workforce by layoffs, poor health, family concerns and age discrimination.
The question will be what happens once the unemployment checks run out and the massive evictions resume. Logic says we can expect many of these older workers to end up in the menial, entry-level and lower-paid jobs dropped by younger workers during the “Great Resignation.”
As ever, the costs have fallen on the most vulnerable.
Those with great jobs, expensive homes and lots of savings are going to be better off. Their jobs survived. They no longer have to commute. Their home equity has ballooned. Their mortgage costs have plunged. Their 401(k) plans are up, up, up.
For those at the opposite end of the scale—many of whom don’t even have a 401(k) — the opposites are true.
It ought to raise pressure on policy makers to fix the looming crisis in Social Security. Here’s hoping.