The Consequences of Recent Job Growth on Older Low Income Workers
William M. Rodgers III, Rutgers University.
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Since the start of the recovery in November 2001, U.S. workers have experienced slow job growth. These conditions have adversely impacted the economic security of low-income and less-educated older workers (ages 50 to 64). During previous recoveries, strong job growth provided older workers with employment opportunities, which helped to moderate the secular increases in displacement that are well documented. This recovery has been different. Only 3.4 million new jobs have been created, less than half during the 1990s recovery and a quarter during the recovery that started March 1978.The absence of strong job growth has resulted in a drop in employment, health insurance and pension coverage for many older workers. Stronger job growth is only a first step to offsetting the secular increase in the displacement of older workers. Additional public policy answers are needed to ensure that older low-income Americans can achieve economic security in the future. The results show that Job growth continues to lag growth during previous business cycles. As of November 2005, 3.4 million new jobs have been created, compared to 8.0 million during the 1970s recovery and 12.0 million during the recovery that started March 1978. The slower pace of growth is potentially due to three new trends: shifts in investment, rising health care costs, and fiscal policy choices. The slower pace of employment growth has adversely affected older Americans. Full-year employment, private health insurance and pension coverage have trended downward, with the most consistent and strongest evidence of decline among low-income men aged 50 to 54. Older men’s losses are primarily due to their decline in manufacturing, transportation, and public utility employment, sectors of the economy that have lost jobs during the recovery. Older women’s losses were dampened due to their disproportionate presence in the education and health services sector, the recovery’s fastest growing sector. Rising economic insecurity for older low-income families goes well beyond declining labor force attachment. Private sector health insurance and pension coverage rates both fell. These erosions come on top of already significantly lower wages, health insurance and pension coverage than the general working age population.
Employment, Unemployment, and the Labor Market, Inter and Intragenerational Mobility