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
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
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@example.com.