Over 55 in the U.S.? Get back to work!
By Seth Sandronsky
Journal Contributing Writer
Mar 15, 2005, 22:02
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,
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, George W. 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 seen as 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 were 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.
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: firstname.lastname@example.org.
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