The Intersection of Age, Race, and Gender in the Labor Market Recovery
Despite the death, illness, disruption, and isolation of the coronavirus pandemic, many Americans seem to have emerged from the episode better off, at least in economic terms. 2.5 years after the start of the pandemic, the employment rate among prime working-age African American men, for example, has risen 2.0 percentage points above its pre-pandemic rate. The labor force participation rate for workers with disabilities is up 1.8 percentage points, and that for teens is up 1.1 percentage points. Although these groups typically face the steepest barriers in the labor market, they have made up ground since the pandemic and led the jobs recovery.
There is one clear exception, however: older workers—especially older women, and most especially older women of color. The pandemic recession reduced employment among older workers far more sharply than among younger cohorts, and far more sharply than in any prior recession. This report explores reasons for the persistent decline in labor market outcomes among older workers—particularly women of color—and provides recommendations for policymakers, businesses, and civil society.
Within 2.5 years of the Coronavirus pandemic being declared a national emergency in the United States—and the economy losing a staggering 22 million jobs in two months—the overall number of payroll jobs in the economy had fully recovered. Remarkably, despite job losses more than twice as deep as those during the earlier Great Recession of 2007–2009, the jobs recovery had taken less than half as long.
Amid the unusually tight labor market conditions that followed, employers expanded their recruiting efforts, relaxed job requirements, offered greater schedule flexibility, and converted a substantial share of in-person roles into remote roles. They discharged far fewer employees each month than in normal times, afraid of what it would cost to replace them. Those changes should have expanded access to employment opportunities across the board, and been particularly attractive to older workers, women, and people of color—the groups most enthusiastic in surveys about remote and flexible work. And yet, these opportunities largely seem to have passed older workers by.
Why older workers suffered the greatest employment loss during the pandemic
Contrary to popular belief, the primary cause of the decline in employment among older workers was not voluntary early retirement, but involuntary job loss coupled with steeper barriers to reemployment. Only about 93k more workers separated from their jobs due to retirement in 2020 than in 2019, according to the Job Openings and Labor Turnover Survey from the U.S. Bureau of Labor Statistics. By contrast, about 20 million more were laid off or discharged.
In other words, while many older workers may describe themselves as having retired, many were in fact pushed into an accelerated retirement when they were displaced from their jobs; that is, they lost or left jobs because their plant or company closed or moved, there was insufficient work for them to do, or their position or shift was abolished.
While most displaced workers find new jobs fairly quickly in ordinary times, the pandemic was different. The recent report on worker displacement from the U.S. Bureau of Labor Statistics contains a startling statistic. Among all workers over the age of 20 who were displaced from their jobs at some point between January 2019 and December 2021, and who had worked for their employer for 3 years or more at the time of displacement, 65.2% were reemployed as of January 2022. Among those aged 65 and older, however, only 27.8% were reemployed. That reemployment rate is 15 percentage points lower than the rate found for the same population group (long-tenured workers aged 65 and older) in the prior survey conducted before the pandemic.
Another study using data from the U.S. Census Bureau underscores that this time is different. Author Erika McEntarfer finds that the pandemic recession increased the retirement rate by 5 percentage points, and argues that most of these excess retirements will be permanent. That is because, while ‘unretirements’ do increase when macroeconomic conditions improve, the effect is very small. The majority of older workers who enter a retirement spell never work substantially again.
Why older women of color are least able to afford the pandemic-induced decline in employment
Why is this a concern? There is nothing inherently worrying about retirement. Most Americans want the opportunity to enjoy their twilight years, relaxing and enjoying the fruits of their labor. But premature retirement is a luxury many cannot afford.
According to U.S. Census Bureau data on poverty in the U.S., 10.7% of Americans aged 65 and up were living below the poverty line in 2021, after accounting for government transfers, up from 9.5% in 2020. The increase in the poverty rate among older workers is particularly notable given that the rates for all other age groups fell, with the rate for children falling nearly in half.
Among blacks and Hispanics over age 65, poverty rates were even higher at 16.7% and 18.8% respectively, with women registering significantly higher poverty rates than men. The elderly poor number about 6 million Americans, but a much larger group of 15 million is classified as economically insecure—that is, living at or below 200% of the federal poverty level (FPL).
About 50% of seniors rely on Social Security for the majority of their income, but women typically receive less than men do ($13,505 on average, in 2019, compared to $17,374 for men). The gender gap in Social Security benefits is driven by the fact that women earn less over the course of their careers and have a higher likelihood of having worked part-time at some point.
Yet women need to make less money stretch longer and farther. Women tend to live longer, and the longevity gap between men and women has been increasing in recent years. U.S. women can now expect to live 79.1 years, almost six years longer than men, whose average life expectancy was 73.2 in 2021. Married women also tend to be younger than their husbands, so they are at greater risk of outliving their spouses and their savings. Since women (including those over age 65) are the predominant providers of informal care for family members who are elderly or who have chronic medical conditions, disabilities, or dementia, many older women split their retirement benefits across multiple family members.
Put all this together, and women were 80% more likely than men to live in poverty after age 65 even before the pandemic. Over the past 12 months, however, the financial situation of many older Americans has become even more precarious as inflation has soared to a 40-year high. Data from the University of Massachusetts-Boston show that more than half of older women in the U.S. no longer have enough income to afford essential expenses.
The bottom line is that older workers, especially women of color, are suffering the most from pandemic-related employment loss, and they are the group least able to afford it. At the same time, employers say they are desperate for talent, with almost two job openings per unemployed person. Given that understaffed businesses are recruiting more widely, considering nontraditional candidates, relaxing job requirements, and offering greater flexibility around when and where work is performed, there should—theoretically, at least—be a multitude of attractive, accessible employment opportunities for displaced older workers.
Why older workers’ employment opportunities are not bouncing back
In spite of red-hot labor market conditions and improvements in job quality and flexibility, older workers’ labor force recovery has stalled. To some degree, it makes intuitive sense that many reluctant retirees would nevertheless shy away from starting a job search and wading back into the labor market. Covid continues to make most jobs riskier for older workers. Furthermore, with fewer working years left ahead of them, older workers have less to gain from starting a new career now than younger displaced workers do. Many older Americans also face non-labor market demands on their time. With access to schooling and daycare reduced since the pandemic, many older Americans are caring for grandchildren. Reduced access to nursing home care since the pandemic has also turned more older workers, especially women, into in-home caregivers for spouses, relatives, and friends.
There are three other key reasons older workers are not being connected with available job opportunities. The first is the industry mix of jobs in growing industries. To date, the jobs recovery has been led by the industries with the youngest employee populations. Older workers may, as a result, lack awareness of these opportunities which are largely going to people outside their social networks. Employers may also overlook older workers in industries with very young employee bases, believing that they would not be a good fit.
A second reason that older workers are lagging behind in the jobs recovery is that job search has largely moved online, but older workers largely have not. The last major study of online job seeking conducted by the Pew Research Center in 2015 found that only 10% of U.S. adults aged 65 or older had ever looked for job information online, and only 7% had applied for a job online. The comparable figures for Americans aged 18 to 29 were 83% and 79%, respectively.
Not only is job search increasingly intermediated online, but work itself is increasingly conducted online since the pandemic-induced increase in remote work, so poor digital literacy is a major barrier to job search and employment. Customer support and sales jobs, for example, have largely moved from call centers to workers’ homes, with laptops and smartphones replacing the office. But while 85% of Americans now own a smartphone, only 61% of Americans aged 65 or older do so.
A third reason is age discrimination. Employers report that they worry older workers could lack the necessary physical strength and tech savvy for their jobs. In a 2019 ZipRecruiter job seeker survey on the topic of ageism, 54% of older workers reported having been laid off or forced out of a job early due to their age, and 18% said they had been encouraged to retire before they were ready. 61% said they believed they had been denied a job due to their age.
A final reason is a crisis of confidence among older workers. ZipRecruiter conducts a monthly Job Seeker Confidence survey, and the results related to older workers are concerning. Job seekers aged 65 or older have as little confidence as job seekers aged 18 to 24 in their job search skills. They have the lowest confidence of all groups that they will be able to find a job within a month, that they will find a job they like, and that they will be able to find a job that pays more than their most recent job. They do not believe it has become easier to find a job in recent months, despite tight labor market conditions.
This lack of confidence may be preventing older job seekers from applying for roles. Older workers are least likely to be actively searching for opportunities daily. They also report having sent out the smallest numbers of job applications, and received the fewest callbacks and job interviews. Their job searches tend to take longer than those of younger job seekers, even though they report the lowest pay expectations and the lowest propensity to negotiate their job offers. Older workers do, however, express willingness to pursue retraining and to make the investment of time needed to improve their job prospects.
What can be done to improve older workers’ employment outcomes
Now that the scale of older workers’ labor market problems has grown, key programs designed to assist older workers need to be reevaluated and improved or scaled up. Policymakers should review the needs and priorities of the Senior Community Service Employment Program (SCSEP) and One-Stop Career Centers—the key federally funded programs designed to help older Americans find work—to ensure that resourcing and staffing are commensurate with the unprecedented need.
Community organizations, such as religious organizations, should develop social services programs following the Job Club program model, in which members provide support to one another, share job leads, and teach and reinforce job search skills to one another. Job clubs can be powerful sources of confidence for older Americans because members experience vicarious reinforcement for their job search efforts as they observe peers in the club getting jobs.
Now is also the time to expand and replicate successful community college programs for older workers that include:
- outreach programs for older students
- programs that advise older workers on specific programs of study
- support to ensure completion
- job placement services
- continuing education for skill upgrading
- programs providing access to assistive technology
In the private sector, businesses should be encouraged to recruit across diverse age groups and consider all applicants equally, regardless of age. Those companies committed to leveling the playing field for older workers should publicly signal their openness to hiring older workers and make it easy for older job seekers to find them. One way to do so is by joining the more than 1,000 companies—including Microsoft, Marriott International, and McDonald’s—that have signed onto the AARP Employer Pledge program. Another is to apply for certification from the Age-Friendly Institute.
Businesses, especially large businesses, should be encouraged to have:
- Older worker recruitment programs
- Retraining programs to keep midlife and older workers current with new technologies and emerging business needs
- Job-sharing programs that allow two workers to split one full-time job and each work part-time rather than leaving the company for partial retirement
- Job redesign programs that adapt employee’s work duties to accommodate injured employees and those no longer able to perform certain tasks and provide assistive technology
- Job transfer programs that allow employees to move from more physically demanding to less physically demanding roles, with some retraining, and
- Phased retirement programs that allow employees to taper their hours gradually.
Government job boards that target older workers should ensure that they are using the latest and greatest technologies, such as:
- ATS integrations allowing job seekers to apply to jobs with 1 click after creating a job seeker profile
- Sophisticated matching algorithms
- Email alerts that notify job seekers as soon as roles that match their skills are posted
- Proactive sourcing tools that make it easy for employers to find them and proactively reach out to them to invite them to apply, and
- Safeguards against job search scams that particularly target older job seekers.
Crucially, successful public-private partnerships to train older workers on digital skills and expand access to broadband internet and smartphones should be expanded across the country. The digital divide is a major barrier to older workers’ labor market success.
Finally, concerned citizens should increase awareness of the post-pandemic labor market crisis affecting older workers by sharing information with their social and professional networks. Building awareness is the first step toward motivating private philanthropy, corporate giving, and a much needed corporate culture change towards greater inclusiveness of older workers and job candidates.