Helping Older Workers Cope with Dislocation in an Era of Pandemic and Economic Uncertainty

This report describes the recent effects of the dislocation of older workers. Automation, globalization, trade, climate change, and the upheaval caused by the COVID-19 pandemic all caused job displacements. Whatever the cause, experience has shown that when older workers are displaced, they are likely to be out of work longer and, if they find a new job, replace less of their former wages than their younger counterparts. Low employer demand for older workers and age discrimination, which rise in recessions, appear to be factored into these outcomes. This leaves older workers at greater risk of long-term unemployment, becoming discouraged and dropping out of the labor force, or taking involuntary retirement.

In an economy where skill needs continue to evolve, older workers have less formal education on average. They have less access to publicly supported training programs and employer-funded training than younger adults. There is evidence that employers are reluctant to invest in training older workers, who they fear may retire before their investment is recouped. The rise in digital technology in the workplace has caused older, dislocated workers who lack digital skills to suffer. Today, few employers provide on-the-job training in basic information technology skills.

The outcomes for older dislocated workers should be a serious concern. Older workers constitute a significant portion of the U.S. labor force: in 2020, 23.6 percent of U.S. workers were age 55+, which the U.S. Bureau of Labor Statistics projects will rise to 25 percent by 2030, and in both cases, roughly another 20 percent are soon-to-be older workers between the ages of 45 and 54. Yet nearly half of households headed by an individual age 55+ have no retirement savings. In addition, an AARP analysis calculated that the employment impacts of age discrimination, such as involuntary retirement of older workers, cost the U.S. economy $850 billion in 2018. Further, losing a job is deeply traumatic for individuals, recognized as one of the ten most stressful life events. Long-term unemployment has been associated with a host of physical and mental health and economic impacts, including a higher incidence of suicide. The American public workforce system was never designed to help job seekers process the mental health impacts of job loss and disruptions like the coronavirus pandemic.

(This report is 10 pages long.)

The researchers proposed the following recommendations:

• Reform and Enforce Age Discrimination Laws - In a December 2020 AARP survey, more than three-quarters (78 percent) of older workers indicated they had experienced or seen age discrimination in the workplace. Stronger laws and enforcement are needed about older workers’ unlawful discharge, hiring, and access to training and promotion opportunities.
• Reform and Enforce Dislocated Worker Protection Laws and Practices: Just Cause, Advance Notice, Severance - To enhance further worker protections, which would go beyond protecting older workers alone, the United States could consider legislation requiring employers to show “just cause” — such as misconduct or failing to adequately perform their duties — to terminate or lay off an employee, with layoffs for economic reasons needing to be “well documented to prevent abuse.
• Establish a Stronger and More Targeted System of Supports Specifically Designed to Address the Needs, Challenges, and Unique Experiences of Older Workers in Such Areas as Job Search, Education, and Training, and Later-in-Life Career and Employment Transitions - To help older dislocated workers who need training, policymakers need to provide additional support to the under-resourced public workforce system for employment counseling, which research has found effective, modernizing services to incorporate better use of digital technologies and labor market information.
• Document and Elevate the Experiences of Older Unemployed and Underemployed Workers - Older dislocated workers can be easy to overlook, often based on the assumption that they will either have savings or be close enough to Social Security and Medicare to get by. Altering these perceptions requires research documenting the experiences of older unemployed workers, in their own voices, in ways that will help workforce development program operators, educators, employers, policymakers, and the public understand their challenges, needs, and wants.

• Last Updated:
• Created:
• Resource Publication Date: 2022
• Author(s): Heidkamp, M.; Krepcio, K.
• Funding Source: John J. Heldrich Center for Workforce Development at Rutgers University
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies