Tuesday, March 2, 2010

Should we do more to encourage those older works who can afford to retire to make room for young workers?

I’m a retiree with no plans of ever again entering the paid work force, but I’m nonetheless really worried about the grim unemployment statistics. I worry about the young people in my life who might be facing long-term joblessness and I worry about the consequences for our society.

Should we do more to encourage those older works who can afford to retire to make room for young workers? My decision to retire was based primarily on my own exhaustion and longing to do something different with my life, not on an altruistic desire to make room for younger workers. But although altruism did not drive my decision, I was happy to make room for a younger teacher who would bring fresh ideas and energy to the classroom. There are too many young teachers out there who can't find jobs.

Don Peck’s article in the March 2010 Atlantic points out that the problem of long-term joblessness is the not just a consequence of the current recession but rather of fundamental changes in the structure of the economy. Peck describes the consequences of our jobless recovery--if it is indeed a recovery:

The effects of pervasive joblessness—on family, politics, society—take time to incubate, and they show themselves only slowly. But ultimately, they leave deep marks that endure long after boom times have returned. Some of these marks are just now becoming visible, and even if the economy magically and fully recovers tomorrow, new ones will continue to appear. The longer our economic slump lasts, the deeper they’ll be.
If it persists much longer, this era of high joblessness will likely change the life course and character of a generation of young adults—and quite possibly those of the children behind them as well.

The grim picture includes research based in my home town of Philadelphia. Peck cites the work of sociologist Kathryn Edin:

Communities with large numbers of unmarried, jobless men take on an unsavory character over time. Edin’s research team spent part of last summer in Northeast and South Philadelphia, conducting in-depth interviews with residents. She says she was struck by what she saw: “These white working-class communities—once strong, vibrant, proud communities, often organized around big industries—they’re just in terrible straits. The social fabric of these places is just shredding. There’s little engagement in religious life, and the old civic organizations that people used to belong to are fading. Drugs have ravaged these communities, along with divorce, alcoholism, violence. I hang around these neighborhoods in South Philadelphia, and I think, ‘This is beginning to look like the black inner-city neighborhoods we’ve been studying for the past 20 years.’ When young men can’t transition into formal-sector jobs, they sell drugs and drink and do drugs. And it wreaks havoc on family life.

Peck’s article is a powerful warning but short on solutions. The Obama administration is doing the right thing with investment in green technology and pressuring banks to start lending to small businesses, but it clearly isn’t going to be enough.

In addition to job creation we need to think more creatively about job sharing, such as the ideas about work sharing reported by Robert Pollen in his recent Nation article:

In the same vein are work-sharing programs that extend unemployment compensation to workers who accept reduced hours that then enable their companies to avoid outright layoffs. Indeed, work-sharing can be even more effective and fairer than traditional unemployment insurance, since it spreads the reductions in work hours across a wide group of workers rather than concentrating the effects of the recession on the minority of workers who become completely jobless. Work-sharing programs have long been a major part of the social safety net in Western Europe. Over this recession, Germany has been especially aggressive in extending these benefits to prevent rising unemployment.(my emphasis)

We need to spread the jobs around. Lowering the age at which one is eligible for Medicare might make some older workers decide to retire. Our society has been pushing workers to stay in the paid work force by gradually raising the age at which they are eligible for full retirement benefits. But either we pay more in social security and Medicare by encouraging older workers to leave the workforce or we’ll be paying more in unemployment compensation--not to mention the range of social ills resulting from a generation of young people who can’t find steady employment.

European societies have historically encouraged early retirement to make room for young workers. With plunging birth rates, some European societies are rethinking generous early retirement policies. But the United States with its relatively youthful population is in a position to move in this direction.

I hope some of my seventy something friends who are still teaching aren’t reading this, but I think reinstituting the mandatory retirement age for college professors might be a good idea. In the past, the law allowed institutions of higher education to set a mandatory retirement age and most did so. Now there is no mandatory retirement age and professors can work as long as they choose.

Also, there used to be a limit to what seniors eligible for a full retirement check could earn without their earnings counting against their social security check. Now there is no limit and a 66 year old worker can pull in a high six figure salary and still collect a full social security check. Social security was never intended to be the icing on the cake and this policy needs to be rethought. Possibly, savings here could be applied to lowering the age for eligibility for Medicare.

There’s no one solution and we need to think about both job creation and job sharing. And job sharing should involve sharing across the generations. To return to Peck’s cautionary tale:

We are living through a slow-motion social catastrophe, one that could stain our culture and weaken our nation for many, many years to come. We have a civic—and indeed a moral—responsibility to do everything in our power to stop it now, before it gets even worse.


  1. Excellent post! I like your ideas for lowering the age eligibility for Medicare, reinstating mandatory retirement ages, and job-sharing. I retired about nine months before the Great Recession revealed itself...not too late to return to the workforce...but I chose to stay retired, despite my altered financial situation, because I did not HAVE to have a job and so many young people did. I hope I don't wind up regretting that decision when the Deficit Commission makes their recommendations.

  2. My guess is that the deficit commission will make recommendations for changes in social security for future retirees—not for us.

    I would have to be in really dire financial straits before I would go back to work. I love the freedom to set my own agenda!

  3. I agree wholeheartedly about lowering the age eligibility for Medicare I know of several teachers who are not able to retire until they can receive medicare. As I have two daughters in teaching field, I know of the great difficulty of obtaining employment especially in this geographic area. Obtaining a position is gueling and seems similar to accessing a high paying financial position. Public school teachers are overloaded with class size, students who have serious learning and emotional difficulties and the ever ending testing cycle.
    It is incredibly disillusioning for young men who have trained as union carpenters, electricians, plumbers, etc. They have put in years knowing their skill and hopes are dim for them right now.

  4. Age alone does not signify readiness to retire. I was fortunate to be a stay-at-home mother for 15 years and I wouldn't trade those years for anything. But after a divorce and 15 years of zeros on social security earnings statements, I'm in a different place than I expected to be.

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