With the pandemic spreading across the country, it widespread effects can be seen in unemployment numbers—with 7.1 million Americans at the end of March.
According to a recent issue brief from NCOA, among all age groups, individuals who were retired are faring worse from the economic fallout.
Older adults with the least net wealth and who are still in the workforce will likely see some of the greatest negative impacts of COVID-19.
The COVID-19 pandemic has caused a staggering loss of jobs. At the end of March, the Bureau of Labor Statistics reported that 7.1 million Americans were unemployed, with numbers projected to rise further throughout April.
In 2019, roughly one in five older adults aged 65+ was still in the workforce. Nearly three-quarters were working at jobs where teleworking was not an option. The pandemic has put these seniors at a double risk: being furloughed/laid off or being forced to go into a workplace and put their health at risk.
For older adults, losing a job can be especially difficult. Older workers are more likely to remain out of work for lengthier periods of time compared to their younger counterparts; some may choose not to return to the workforce at all. An AARP survey of older workers found that following the Great Recession, the average duration of unemployment was close to a year for older adults. More recently, last month AARP reported that 19.9% of jobseekers aged 55+ were long-term unemployed, compared with 16.2% of those aged 16 to 54.
A Grim Projection
While it’s hard to know what the long-term economic fallout will be from the COVID-19 pandemic, there are clues from the last decade, following the 2008 market collapse. A recent issue brief from the National Council on Aging (NCOA) and LeadingAge LTSS Center @UMass Boston examined the financial impact of the Great Recession of 2008-09 on adults aged 60+ and found:
- Among all age groups, individuals who were retired fared worse than those who were still in the workforce. (Though those who were aged 75+ fared better than those aged 60-74.)
- However, although being over age 75 in the workforce meant better income than those retired, it appears that many of these older adults remained in the workforce out of necessity precisely because their overall financial resources and net wealth were worse than those retired.
- Unsurprisingly, those with the lowest net worth and financial assets fared worse following the market collapse. A common trend seen across those 60+, regardless of age group or retirement status, was a decrease in total net wealth and taking on greater debts, particularly property related debt, during times of recession.
Overall, the researchers’ findings suggest that older adults with the least net wealth and who are still in the workforce will likely see some of the greatest negative impacts of COVID-19.
SCSEP: A Lifeline for Vulnerable Older Workers
NCOA is one of several national sponsors of the Senior Community Service Employment Program (SCSEP). Funded by the U.S. Department of Labor (DOL), SCSEP is a training program that helps low-income, unemployed individuals aged 55+ find part-time work and get back on the path to financial stability.
As the nation began to shutter businesses and ask Americans to shelter in place during the onset of COVID-19, NCOA took an unprecedented step to request DOL to allow us to continue to pay SCSEP participants during the pandemic, even if their training sites were closed. For these vulnerable older adults, their SCSEP stipend offers a lifeline during difficult financial times.
Yet SCSEP remains under threat, with several proposals over the past few years seeking to drastically cut or eliminate funding for the program entirely.
NCOA, along with the Leadership Council on Aging Organizations, is urging Congress to provide an additional $500 million in funding for the SCSEP in the next COVID-19 stimulus and relief bill. Additional funding will more than double the program’s current capacity to serve between 56,000 to 128,000 additional eligible individuals that need SCSEP services.
History tells us that older adults are likely to face significant financial hurdles following the COVID-19 pandemic. Investing in programs like SCSEP can ensure that many will have an opportunity to return to the workforce and regain some of their financial footing.