Who took one of every two new jobs created in the U.S. over the past 12 months? Give up?
“Over the last year, workers over age 55 accounted for 918,000 of the 1,810,000 rise in employment shown in the (Labor Department’s) household survey,” says economist Dean Baker. “This is a very striking and relatively new development.”
There are two factors driving the flood of older workers into the labor market, says Baker, who co-directs the Center for Economic and Policy Research in Washington, DC. One is the falling value of retirees’ 401(k)s invested in the stock market. Five years ago the stock market bubble burst, falling from its record heights that were supposed to bring prosperity to all forever. Since then, 401(k) retirement pensions have not bounced back to their pre-2000 stock market values. And they remain over-valued by historic averages. Thus retirees’ 401(k)s can fall much more, lousy news for them, indeed.
Increasingly, workers bear the risk for their retirements. These defined-contribution retirement plans, or 401(k)s, are invested in the stock market, the place where folks park their money to watch it grow. Employers that used to fund defined-benefit retirement pensions providing guaranteed monthly incomes to retirees are fleeing such agreements like rats leaving a sinking ship. Why? Market returns are becoming more risky. Two reasons are the falling value of the dollar falls and the rising U.S. dependence on foreign lending to fund private-sector borrowing. Thus U.S. employers are rushing to make employees bear the brunt of stock market investments for their retirements.
A second factor pushing older workers into the labor market is the trend of price hikes for health-care coverage, Baker says. Two examples are costlier co-payments and deductibles for physician visits and medicine. In this way, retirees with less income than they had as employed workers are bearing an increased financial risk for their health care.
Also, employers are increasingly choosing not to provide retirees with health insurance coverage, Baker adds. This move cuts costs for companies in fierce competition with other firms for profits and market share. Such a trend forces retirees to spend more income from pensions or savings on health care. For them, earnings from entering the labor market can help with rising health-care spending.
Frequently, President Bush speaks about an “ownership society.” In this society, taxpayers, braced by examples of personal responsibility from the Republican Party and some Democrats, can keep more of their money due to the three income-tax cuts that the president proposed and Congress passed. What could be better than that? This unity of fiscal policy and personal responsibility sounds wonderful.
The for-profit health care industry has a related notion of self-reliance. It is called “consumer self-help.” In this scenario, people exercise responsible use of the health-care system. When they act with too little responsibility, they are the problem. When health-care consumers turn that around, they become the solution. The less of the health-care system that consumers use, the more they can help to contain rising costs. Investor-owned hospitals back this private-public partnership with patients for the good of all. This is a win-win approach.
People work, from child-rearing to much else in U.S. society. Nothing could be more natural than for us to be in motion, producing for ourselves and others.
However, there is nothing natural about economic insecurity. It is not a force of nature like the temperature at which water boils and freezes.
Yet economic insecurity is driving older Americans back into the labor market. At the same time, employment opportunities for other workers are souring, the regular pattern of a market economy.
“In February 1999, there 16,953,000 people over age 55 who were working,” Baker says. “Last month there were 22,772,000, an increase of more than 35 percent. This is especially striking since job growth had collapsed for everyone else after March 2001.”
Where is the popular discussion about this new workplace trend being lived by older Americans? They are, after all, a force to be reckoned with. Their strong opposition to Bush’s Social Security privatization plan is proof of that, and provides a platform upon which to push the domestic policy debate in a progressive direction.
Seth Sandronsky is a member of Sacramento Area Peace Action and a co-editor with Because People Matter, Sacramento’s progressive paper. He can be reached at: [email protected]