Study: Recession Hits Low-Income, Older, Ethnic Women Workers Hardest

Study: Recession Hits Low-Income, Older, Ethnic Women Workers Hardest

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Photo: Iola Lowe, featured on the Senior Service America website, is among the low-income seniors who have received on-the-job training and placement under a federal program that was slashed this year by 45 percent.

BOSTON--Low-income older workers are four times as likely to be unemployed as their higher-earning contemporaries, a labor economist told the Gerontological Society of America's [www.geron.org] (GSA) national conference in Boston. And the lost tax revenue is costing the government tens of billions of dollars a year.

The Great Recession has not hit everyone equally hard. Among workers 55-74, those with limited education and job skills are far more likely to lose a job and take longer to get a new position, according to Andrew Sum, director of the Center for Labor Market Studies and an economics professor at Boston's Northeastern University.

8.3 Million Seniors

During 2010, more than 8.3 million people in that age group lived in households with incomes of no more than $20,000 a year, representing roughly 15 percent of that cohort.

This low-income older population is far more likely to be female, black or Hispanic, a high school dropout or unmarried, according to Sum's findings.

When looking at the impact of the recession that began in 2007, "you can't tell an accurate story about older Americans in general. You've got to look at the various subgroups and the situations they face today," said Tony Sarmiento, executive director of Senior Service America, Inc. of Silver Spring, Md.

While politicians and pundits suggest that mature workers, with a 7 percent overall unemployment rate, don't need special help to find work, data show low-income workers face much higher risks of job loss, longer periods out of work and the potential to simply leave the workforce.

Even the total 7 percent unemployment rate for workers over 55 represents the highest rate since World War II, said Sum during the GSA's convention just before Thanksgiving. But the jobless rate for low-income workers is rising even faster. In 2000, the unemployment rate for older workers earning less than $20,000 was 6.7 percent. It more than tripled to 21 percent by 2010, Sum said.

Workers whose jobs end permanently are considered dislocated workers. They must find a new profession or new work with different skills. There have been 14 million dislocated workers in recent years, including 2.7 million older workers. That means one in 10 older workers have permanently lost employment, according to Sum.

"These dislocated workers have the hardest time getting reemployed," he said. The center's survey of dislocated workers found they had a 50 percent unemployment rate. If they were older and African-American, the rate jumped to 65 percent.

U.S. Cut Only Senior Jobs Program

Sarmiento said the current federally supported program to provide jobs to older jobless workers from low-income fields has little political support right now and, in fact, it has been cut back in the last year.
The Senior Community Service Employment Program (SCSEP) is the largest federally funded program for older adults and is the last vestige of the jobs programs that began during the depression-era New Deal under the Works Progress Administration.

SCSEP provides training help for workers over 55 with incomes less than 125 percent of the federal poverty line. They are paid to work part-time in local civic programs, such as senior centers and libraries.

Until last year the program served roughly 100,000 people annually from the 11 million eligible for help. But the program was cut by 45 percent last year and now it reaches fewer than 70,000 people, according to Sarmiento.

"There is an enormous need, but rather than respond Congress and the White House withdrew," said Sum.

When the center looked at how much the millions of older displaced workers would have contributed to the economy in taxes and Social Security payments, rather than costing the government in added food stamps, disability and other aid, it found the government's combined lost revenue and aid payments cost it $38 billion a year.

"All these older dislocated workers would have been major contributors to the economy and now are a major drain," he said. "Yet we, as a country, have done nothing to put that back to work. That is a major tragedy."

Pamela MacLean wrote this article as part of the MetLife Foundation Journalists in Aging Fellowship, a project of New American Media and the Gerontological Society of America. This article first appeared at RedwoodAge.com, where she is an editor.