Uncovering the Facts Behind Unretirement
Melissa Harris-Perry: I'm Melissa Harris-Perry. Thanks for joining us here on The Takeaway after the Memorial Day Weekend. It was a day off for many American workers, especially those who work for the federal government or those with higher income, salaried professional positions, where employers offer a little paid respite on these national holidays, but many other American workers put in a full day yesterday. They were ringing up the purchases on those Memorial Day Weekend sales. They were taking orders at restaurants.
Speaker 1: One cheeseburger and fries please.
Melissa: They were checking luggage at the airport.
Speaker 2: Surely you can't be serious.
Speaker 3: I am serious and don't call me Shirley.
Melissa: You may even have noticed many more older Americans among those working. Amid the early days of the pandemic, many older Americans who are particularly vulnerable to illness and death from COVID-19 left the workforce, but according to The Indeed Hiring Lab, 1.7 million retirees have come out of retirement and gone back to work. The Bureau of Labor Statistics shows that workforce participation among those aged 55 to 64, has returned to pre-pandemic levels. Now, undoubtedly, some continue to work because they love what they do.
Mary Jane Sheldon: Hi, my name's Mary Jane Sheldon I'm in Reston, Virginia. I've been in retirement for the last nine years, but I'm thinking about coming out of it now for multiple reasons. Partly slight boredom, partly needing or would like to have some additional income.
Melissa: Others are working because they must continue earning an income to make ends meet.
Speaker 4: I wouldn't say it was a choice, it was a forced issue because I needed money to live.
Speaker 5: Yes, I've come out of retirement. It's just very difficult to make ends meet without extra money coming in.
Melissa: This is a trend that affects far more than individual households. Retirement is not all about golf and gardening. Grandparents are a critical thread in the childcare safety net for younger American workers. Older people are foundational to the functioning of our democracy. Listen, older Americans make up the majority of US poll workers. And all of the many ways that older Americans contribute to our greater social good become a lot harder for them when they're still putting in long hours for a paycheck.
Here to help us understand unretirement is Dr. Beth Truesdale, from the Upjohn Institute for Employment Research. She's the editor of a forthcoming book Overtime: America's Aging Workforce and the Future of "Working Longer". Welcome to The Takeaway Dr. Truesdale.
Dr. Truesdale: Thank you. It's great to be here.
Melissa: All right. Let's start by talking about some of these numbers. We've heard a lot about the great resignation. In fact, as a matter of statistics or accounting, is there a great unretirement happening?
Dr. Truesdale: I think it's easy to overstate how big the trend is. We've seen recently in the media, quite a lot of attention to some numbers about how many people are coming back to the labor force having said that they were retired a year ago. Essentially what we're seeing is that those numbers are about back where they were before the pandemic. Roughly in a year 3% of people who say that they were retired, a year later you look at where they're at, and they say that they're back in the labor force, they're working again. That's pretty normal.
Now during the pandemic that number dropped, which is totally unsurprising and awfully a lot of people were pushed out of the labor force of all ages and including older people who were obviously more at risk from the health risks of being at work during the pandemic so the numbers of people who were coming back to the labor force during that time dropped and now we're seeing a return to something that's about 3%, little under, of people who a year ago said that they were retired and now they're back working again.
Definitions of are we in great unretirement? It depends. Their numbers are going to depend a little bit on how you define the thing, but my take is that it's a real trend. People are coming back to the labor force in larger numbers than they were a year ago. That's not surprising. It's more return to normal rather than all the retirees are coming back to the labor force.
Melissa: Let's start in the most positive place. There are some folks who say they're working because they really like their work. Let's take a listen.
Julie Motz: This is Julie Motz and I'm from Fairfax, California. I don't think about coming out of retirement because although I'm 79, I've never had the luxury of retiring. I work as a healer and I've just never been specifically focused on making money in order to be able to comfortably retire but I don't mind because I enjoy my work.
Melissa: How much of this on retirement may in part just be about that, the joy of the work that people do?
Dr. Truesdale: I think that's a terrific question and I really appreciate when people are willing to reach out and share their stories. I'm a qualitative researcher and I spend a lot of time interviewing people. I think listening to people tell us what's happening in their lives is so important. I do hear in that story partly, carrying on, working longer for enjoyment. Now, many people do derive a sense of purpose and meaning from their work and if it works to be in a job like that and to carry on working longer, then terrific. People ought to be able to do that that's really great.
Of course, there are so many other ways to derive purpose and meaning in life. We don't need to tell people in order to be engaged, you must carry on working, never retire. People can retire and be engaged in their communities and their families in many different ways. I wouldn't want to look to work as the only way that we can tell people to stay engaged. The other thing that I hear in that story is that she's working partly because she doesn't have the option to retire financially. It's great that it is, in fact, at 79 still working for her to retire, but that's not a reality for so many people who still nonetheless can't afford to retire, so part of the background here really is that working longer starts a lot younger than we think.
When we think about working longer, unretirement, a lot of times we're thinking about these people in their 60s, in their 70s, who are still in the labor force or have come back to the labor force, but in the US, among people in their late 50s, nearly a third of those people are out of paid work. They're only maybe 3% or 4% of them are unemployed, meaning that they're actively looking for work, but another 28% or so are out of the labor force, meaning that they're not working for pay and they're not looking for work. That's a number that we just don't talk about, we don't think about often enough. Nearly a third of Americans are not working for pay in their late 50s.
For most of those people, they're not going to be candidates for working longer into their 60s, into their 70s. A lot of things push people out of the labor force in their 50s, even if they would want to stay in longer. Poor health, caregiving responsibilities for the older generation, for the younger generation, jobs that are unstable, precarious, or hazardous, too physically demanding for people at that age. There are lots of reasons that people leave the labor force early.
Not to spend more quality time with their yachts by large. It's because it doesn't work for them to stay in work, even though they would like to, and even though leaving the labor force early, retiring early means that they're at much higher risk of financial insecurity in retirement. For a lot of folks, this is the paradox really. The people who most need to work longer for the money in order to have some financial security are often the people who are least able to continue to work longer.
Melissa: As you're making this point, let's take a listen to this call from Patty, from St. Louis, which I think definitely underscores exactly the point that you're making.
Patty: This is Patty from St. Louis, Missouri. I quit my job of 31 years because of new management, but because of my age. Everyone was thinking I retired. I was told I retired, which I didn't because I can't afford to and my husband can't afford to. Yes, I'm still working
Melissa: Let's listen to just one more here doctor because I think it does, again, underscore some of that distress that you were talking about here,
Michelle: I will never be able to retire and I was impacted negatively by the pandemic. I'm almost 59. I have to take money out of my retirement fund. I'll be working until I'm dead. This is Michelle and I'm in Roxboro.
Melissa: Dr. Truesdale, what are you hearing from those members of our community?
Dr. Truesdale: I'm hearing this idea that really working longer is the only option that they see that their actual strategies is to basically to try to die with their boots on. I think that's something that we hear a lot from people who -- out of the labor force, but don't want to be and from people who are working longer, but don't want to be. For whom it may be really not a great choice, but that's the choice that they face. About half of people who are retired in the US say that they were either forced or partly forced to retire. It's a number that really hasn't changed much over recent years that we've yet to see the numbers from the pandemic in that.
That's even before the pandemic, we're seeing that half of people who are retired say that they're forced to partly forced to retire. That means you have a lot of people who are having to leave the labor force earlier than they want to. For those people, the risk of financial insecurity and retirement is really high. Working longer is for some people really the only option that they've got if they're going to meet their basic needs. Now, social security is a hugely important program. It's received by about 9 out of 10 Americans over 65. For a lot of people, it may be their only source of retirement income or at least the large majority of their retirement income.
It's hugely, hugely important, but it was always designed to be something that you take alongside of an employer-based pension and so it's very modest. The average amount of social security benefits that people get in a year is about $18,000, $19,000 a year. For a lot of people, if they earned less than average during their career, they will have less than average social security benefits and that may not be enough to just meet their basic needs. Staying in work, staying in paid work may be the only option that they have to try to top that up.
In this country, we've made a policy decision to link retirement savings to employers, but only about half of Americans have employer-based pensions. Those are people who are disproportionately people in higher-income jobs, so that the people who can best afford to retire. Our retirement system works really, really well for some people and it works really, really badly for a lot of other people. I think that's something that from a policy perspective, we really need to be looking at how do we improve both?
How do we improve the quality of work, the availability of work that people have across the life course so that they can work longer if they choose to and they need to, but also how do we improve retirement security across the life course? This is not something that people can do by themselves. This is not something where you just do it by yourself. That's a system that doesn't work. That's going to leave an awful lot of people behind. We need a system that makes these choices at the level of policy, at the level of how we want to organize ourselves as a society.
Melissa: All right, let's take a quick timeout right here. We're going to be back in just a moment with more about retirement and unretirement on The Takeaway.
Back on The Takeaway, I'm Melissa Harris-Perry, and I've been speaking with Dr. Beth Truesdale of the Upjohn Institute for Employment Research, and we've been talking about unretirement and we've been hearing from you. Remember that you called us at 877-869-8253 and you can keep sending in those calls because we always appreciate it when you're part of our show. As we were going to break, Beth, you were talking about the ways that we've connected retirement savings to employment. Of course, the other piece has been healthcare that we have attached to employment, except presumably in the case of Medicare, but I want to take a listen here for a moment to Deb about this question of the capacity to afford healthcare.
Deb: I had to retire at the end of the year in 2020 because my back gave up on me, I had to have back surgery. I was only 62, I was not prepared for it. Financially, it's been a challenge. I have to pay for my own health insurance. It costs me $825 a month so it's very hard to pay for it. I'm thinking about going back part-time next year because I want to rebuild at least a little bit of my retirement funds.
Melissa: All right. What are you hearing there?
Dr. Truesdale: Gosh, that's such an important story. Isn't it? It's one that we just don't talk enough about, is if you lose your job in your 50s or early 60s and you're not eligible for Medicare until you hit 65 and your spouse doesn't have health insurance with their job or you don't have a spouse, what do you do to access good quality healthcare? Medicaid is an option for some, but it's a real problem and there just is not a good way out of that under our current system in terms of accessing health insurance in the run-up to retirement years, the run-up to 65. I think for a lot of people, that is really important. We talk too about connecting retirement savings to employers.
There's been a lot of conversation, I think, in the public conversations about how could we detach health insurance coverage from employment? How could we do that a bit better? I think we also need to have a conversation about how do we detach retirement savings from employers. There are some various sorts of state programs where you have universal automatic retirement savings that follow the person from job to job. They're not connected through the employer. I think that's the direction that we really need to go to get the generations that are coming up to retirement in a better situation financially when they get there.
Melissa: Let's talk a little bit about that because I think it can feel like, "Oh, retirement, that is-- or even unretirement, those are stories about some group of people that is not me. By the time I get there, all will be fine." If you are, for example, a worker in their late 40s here in the US, what should you be thinking about?
Dr. Truesdale: It's hugely important that the people who are in their 40s and 50s now, those are the people who are the retirees of the future. We, from a policy level, I think we really need to be looking at the needs of those people as well as the urgent needs of some of the people who are in their 60s and 70s and beyond now. Some of the things that we can do as a society, I think a big one that we don't talk enough about in terms of the retirement conversation is we need to talk about the quality of work that's available to people.
The kinds of changes that we could make to improve work quality for workers of all ages are the kinds of changes that would keep more people employed in their 40s and 50s, that would set them in a better position to have stable work history so that they could stay working longer as they get into their 60s. Trying to get more people to be able to work up to 65 and be able to claim their social security at that age. Here we're thinking about things like pay, working conditions, a rise in the minimum wage, the federal minimum wage is $7.25 an hour. It hasn't budged for years. It's the lowest in the developed world in terms of purchasing power.
We don't think of minimum wage necessarily as being something that affects older workers, but it really is. There's an awful lot of workers of all ages who are working in jobs that are bound by the state or federal minimum wage. Things like that. Things like being able to take some paid time off to take care of your own health, to take care of your family. That's something that's really important to workers of all ages, but would really particularly help older workers who may have additional health needs or who may be caring for their own parents and needing to take some time off to do that caregiving.
Talking about things like sensible scheduling, reasonable scheduling, a lot of people are in jobs, especially in the service sector, so restaurants, retail, where they're getting their schedules at the last minute, a day or two in advance, where they may be required to be on call, but they don't get paid unless they're actually called into work. These sorts of schedules make it really hard to just arrange your daily life and they make it harder to stay in the workforce at all ages and harder to stay in the workforce longer when you're older.
If we can address those sorts of job quality things at the policy level, then I think we set up the people who are in the younger generations.
We put them in a better position for retirement security and working longer when they're older. There are a lot of things too short of changing laws. Employers can do a lot to improve jobs. Now, I don't think we can necessarily rely on all employers to do this out of the goodness of their hearts, but there are employers who choose to take essentially the high road. That is they pay their workers a little bit better than the sector average, they give them more training, they give them more varied tasks. There are work redesign programs where employers can work on how the managers are interacting with employees, giving employees just a little bit more control over what they do when they do it how they do it.
Those are the sorts of things that really improve workers' well-being, can improve their health over the long term, and can help them stay employed longer. Those, I think, are the sorts of things that today's middle-aged people and even earlier, need to be thinking about how do we as a society make those changes to put them in a better position when they're 20 years down the road?
Melissa: Beth Truesdale of the Upjohn Institute for Employment Research, an editor of a forthcoming book Overtime: America's Aging Workforce and the Future of “Working Longer”. Thank you for joining us today.
Dr. Truesdale: Thank you, Melissa.
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