How Baby Boomers Are Faring in this Economy
http://thedianerehmshow.org/shows/2012-01-04/how-baby-boomers-are-faring-economy
Baby Boomers are facing unique difficulties in this economy. Though their unemployment rate is lower than the national average, when they do lose their jobs, it takes far longer to find new ones. A new poll shows that those over fifty are more stressed about their current financial situation, they are worried about the lasting impact of the recession on their security, and many expect they will have to work as many as six years longer than today's retirees did. New economic realities for Americans in their fifties, sixties and seventies.
Guests
Gary Burtless
senior fellow, economic studies at The Brookings Institution.
Olivia Mitchell
professor, executive director of the Pension Research Council;
and director of the Boettner Center for Pensions and Retirement Research at The Wharton School, University of Pennsylvania
Richard Johnson
Director of the Program on Retirement Policy at the Urban Institute
Program Highlights
The great recession has affected different age groups in different ways. Its impact on the generation of those age 55 and above, many of whom are nearing retirement, has left many "Baby Boomers" with unique financial challenges. Our
guests explore how some older Americans have dealt with the unexpected hurdles the recession has set in the way of their plans for enjoying their later stages of life.
Some Common Problems
Several of the factors that matter the most to many who are 55 and older are the terrible job market, the drop in home values, and the drop in the values of their retirement accounts. "That makes this time a very anxious one, a very worrisome time if you are 55 or older and you're still working," Gary Burtless said. According to Richard Johnson, the unemployment rate for those 55 and older is about 6.4 percent, which is lower than the national average, but still very high. The real problem for people in this age group is that when they lose a job, it generally takes them much longer to get a new one than it does for younger workers, Johnson said.
The Issues Behind The Jobs
Diane asked the guests why it takes so much longer, on average, for older workers to find new jobs. Johnson said there seems to be a perception among employers that older workers are more expensive than younger ones, and that their employer health-care costs are higher. There's also a concern, Johnson said, that older workers might retire in just a few years after being hired - a situation that many employers are wary of in terms of investing time and money in training a new worker. Some employers have tried to offset rising health care costs for workers of all ages by setting up health savings accounts for employees, depositing money in the accounts, and leaving it up to the employees to shop around the the best health care plans.
Psychological Stresses On Baby Boomers
As a Baby Boomer herself, Mitchell said she and her peers are coming to terms with the fact that their retirement years are going to look quite different from those of their parents'. "Social security, medicare, all these programs are facing much bigger problems...our home values have declined, our 401Ks are fairly limited. And health care costs just seem to be quite astoundingly high," she said. One way that people who are in relatively good health can try to compensate for these challenges is to work longer into their sixties in order to claim the maximum social security benefit, Mitchell said.
Is It Possible To "Reinvent" Oneself?
A listener in his early fifties wrote in to say that he's feeling a lot of stress about his current job prospects. He wondered if it was really possible to reinvent himself at his age. Mitchell said that as much as possible, older workers need to try to keep retraining themselves on the latest technology and skills. Johnson added that some employers have a tendency to view older employees as not being as "up-to-date" on the latest skills as younger workers are, and so the burden to prove their competency in this area falls on the older worker.
You can read the full transcript here.
Comments
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My question is, did the baby boomers not cause their own messes? Where as those under 40 are inheriting messes caused by those who came before us the boomers chose to lower their taxes time and time again, to run up the debt, to stop investing in our infrastructure, science, technology and education. The boomers also were the first generation to truly tune out to politics. After their flower child phase they basically ignored politics and only got interested when the economy was bad or they heard their taxes would rise. And they were also the first generation to stop saving and instead spend every penny they got and then some.
So, if they now face problems.......how is it not their own fault? Their generation took everything that their parents saved and spent it(and then borrowed against their kids and grandkids to boot!). They took everything their parents generation built and wore it out by riding it hard and never paying for maintenance. So, how is the struggle many of them face now not their own fault? It is hard as someone that is 29 to not look at this and feel the boomer generation was a bunch of spoiled trust fund kids who piddled away the families wealth. Now in their golden years they come to their children looking for sympathy. Problem is instead of living the cushy life their parents did we kids and grandkids are instead busting our butts with college and possibly even 2 jobs. We just do not have the time or the money to help them and its hard to want to when they never helped themselves, let alone us.
A person 29 years old has no firsthand knowledge of what occurred while he was a child or before he was born and so I forgive you in advance, Magus. More than a quarter of American citizens are Baby Boomers. This is a result of the pent-up reproductive urge amassed during the Great Depression (deprivation) and WWII (horror). They came to maturity just as deregulation and institutional corruption intensified around 1980. Most of them had started out with very little and that had to be divided among numerous siblings. To buy a house, raise kids, pay educational costs, help old parents and live up to societal expectations often took everything they had. Their road became steeper and steeper as American Empire and exceptionality disintegrated. Media, education, the Red Scare, business ideology all conspired to keep them striving and complacent. The United States has always had an owning class and they saw a chance to make their move. Deregulation and lax enforcement made institutional corruption and wealth concentration intensify. Soon politics was only a formality and a show. People forgot how to resist as globalism was imposed. The USA remains a wealthy nation , on average, that is when you divide the assets and incomes among 100 million households. The problem is that the average is a mathematical fiction.
The top 1%, and particularly the top .01% have it all, too much, and they always want more. The intense power this minority possesses warps the perception of many younger people and makes them selfish whining nihilists. They are deprived or any sense of community or empathy out of panic over their dismal futures. They even hint in their victim blaming spiels of mass extermination, the systematic erasure of their parents and grandparents. Our civilization will collapse if we don't cooperate and change radically. The cruel ones at the top need to be deposed. If a 29 year old can't understand these truths he is making a far worse mess than any Boomer ever did. I hope I've answered your question. I'm a woman, age 37.
The cause of the economic problems of the boomers as well as the rest of us is the massive and growing income inequality gap, largely caused by government action and inaction as well as other factors and along with many consequences. Corporate corruption of government is a big one. We need to pass an amendment to overturn the dreadful 2010 Supreme Court Citizens United v. FEC decision.
Geez pancake, seems to be some inconsistencies in your self description.
All generations are victims of the circumstances of their time but all have the ability to prepare for their future. For the youthful among us I would recommend not getting "hobby degrees", save your money, get married and stay married, rely on yourself and not the government. The top 1% have nothing to do with bad personal choices made in life.
Our dysfunctional political class (Demos and Repubs) and their enablers’ (media and special interest groups) tug of war for the resources of this country are finally draining this country of our prosperity and future. 1) We have a national debt that is larger than our GDP, 2) we have a labyrinth tax code that is riddled with inefficiencies and distortions, 3) we have stifling anti-growth regulations that are killing business creation and expansions, 4) we have 40% of out of wedlock births, and 5) we have a public education system that spends more per pupil than most developed countries with a very low return on our investment in said education.
After saying all of the above, the top reason why this country is failing is the fact that we don’t SAVE. Furthermore, we compound the problem by borrowing more than we can possibly repay to maintain our spurious lifestyles. We are consumers first, second and third.
No amount of redistribution or reams of regulations will cure the above diseases....
The REAL reason why this country is failing....
1) Turn off the television set
2) Put down that game controller and get rid of all of the game systems
3) Throw away those cellphones
4) Stop listening to commericial radio
5) Don't believe a word written in 99% of newspapers.
6) Stop subscribing to magazines and other periodicals.
Pick up some good books and start reading and start thinking for yourselves. Americans are distracted beyond hope.
True that, Teece. See Chris Hedges lay it all out on C-Span archive. Three hours New Year's Day on Book Chat. WE didn't do this to ourselves. Capitalism unleashed devours democracy like a pitbull.
I met two boomers during the holiday who were in deep trouble. One 57 year old who was driving a AAA truck that towed my truck into a shop. I rode with this guy. He was making minimum wage working 50 hours a week as well as delivering 4 paper routes seven days a week another 20 hours a week. 70 hours a week clearing 400 a week.
Another 59 year old boomer I met drove my wheel chair bound WWII father to the VA in Dayton Ohio from the nursing home he is in. I rode along. I was asking him about his working history. He had worked at GM for 20 years at I assume about 30 bucks an hour with good benefits. He had been laid off 5 years ago and had been driving for this transportation company since then making just below 10 an hour. He was so pissed off he could barely catch his breath while he shared his story.
What would you say to these two boomers?
It is a bogus assumption that a prospective 30 something employee would tend to stay longer with a new employer than a baby boomer. The work force today is dominated by Gen X and Gen Y's who float from job to job. Further, they are just as likely to not be saving for their retirement because they believe that they have time.
I love it when younger people point a finger and say that people my age created our own mess. All I did was work 60 hour weeks for 30 years, moving from a smalltown 3-person weekly newspaper to editing a daily newspaper with a staff of nearly 40 writers, photographers and editors. I moved my family every two years, I worked 12-18 hour days, when I was on the news desk at one paper, I took on two extra weekend shifts on the sports desk so we could afford to buy our first 1,000 square foot house. Now, I've been unemployed for three years as of the end of this month and I'm still looking for a job. I freelance for some trade magazines, I've interviewed for a hotel desk clerk job and I hear nothing at all when I apply for basic jobs at dozens of newspapers. I am a highly qualified copy editor, yet I never hear a word when applying for advertised openings. Anyone with half a brain can read my resume and do the math. People say employers value older workers. That's bull. They're afraid of them. Some of the best hiring decisions I ever made involved older employees who had been downsized at metro newspapers. I wish I had taught that lesson to younger editors now doing the hiring. I turn 59 later this year. I didn't plan to tap my retirement accounts until much later in life, but time will tell if I need to change my plans.
Much of this is not a new story. At 55 I was laid off in the mid-90's as a high tech manager, due solely to salary and health costs. It took over a year to locate another job, which required moving. In the meantime I was overtly told by one propsective employer that a) they presently had no women on their techical staff, and b) they had very youthful employees. These were given as the only reasons not to hire me. Bottom line, those over 55, and sometimes younger, have always been targets for short-term budget resolution in corporate America. There is no regard for expertise. A sad commentary.
I am so tired of hearing about self-absorbed baby boomers....
'unique difficulties' every demographic has its unique difficulties, get over yourself.
What would your guest say to the hundreds thousands of boomers laid off by GM etc Workers who are either working at Wal Mart , in nursing homes or other minimum wage jobs or are unemployed. What would you encourage them to do? Try to form unions?
In 1959 Kruchev declared that capitalism would be destroyed without ever firing a shot. The Soviet Union is now a faded memory, but Kruchev’s words still hold true. Capitalism is doomed and it is consumer aspects of Capitalism that is slowly eating away at the stability of our economy. And at the very core of this is greed.
The weakest link in the Capitalist system of economics is the human aspect. And what is it that has caused capitalist collapses time and again? We blame the bankers, the Wall Street tycoons, the Industrial Moguls and the corporate CEO’s. It was not the fault of any these people individually; however, collectively it was their philosophy of greed. Greed by anyone who desires more wealth than they are worth, greed for all that is bigger, better, brighter, faster, newer or just plain more….. this is what caused the great depression of the 1930’s and it is what is causing the economic problems now.
As a nation, we have simply said “yes” too many times to purchases, while not reading books like “Grapes of Wrath” and “Of Mice and Men”. They are no longer required reading in our schools. Meanwhile we bought houses we couldn’t afford, cars and toys we had no business buying and taking vacations while using our homes as ATM’s. We were told through our media outlets that consumption was what would make us happy. It won’t and it is destroying us.
We don’t need 95% of what we have but try to explain that to an American....of any age.
Those who forget the past are condemned to repeat it.
Every one of your guests stated the "start SS benefits early versus later" choice incorrectly.
The correct statement is "if you think you will live longer than SS expects you to, start benefits later and you will end up collecting more money from SS".
Subject: Paying back into SS to get the higher return
I was able to retire at age 62, my wife at 63. I have heard that retirees can pay what they have collected back into SS to get the higher returns they would have gotten if they waited for full retirement. How can I determine if this would be advantageous?
There seems to be a presumption that older workers will be the last to be laid off ... Yet ... there have been 3 separate Supreme Court decisions that boil down to the release of older workers for the business's economic welfare does not constitute any kind of age discrimination.
What is the impact of long-term unemployment (4 - 5 years) on an older worker's social security? Isn't ones social security payment based on recent wages?
Renee Saxon
Chandler AZ
Shouldn't the government be encouraging baby boomers to retire by
65 - in order to open up jobs for the younger generation? A simply
tax incentive could move more boomers to retirement.
Peter here in Athens Ohio many of the long time editors etc at a one time locally owned paper the Athens Messenger were given several hours to clear out their desk when they were bought out by a large media corporation. They were smashed ..sent on their way.
The GM man that I described earlier that I rode with to the VA said a corporate hatchet man showed up at the GM Moraine plant and they all knew it was a matter of days before 4000 workers were sent out on the streets around the Dayton Ohio region.
My husband is a marine engineer and at 65 cannot retire because we are stuck with 4 properties that will not sell and are the major part of our retirement income. TYG he has a good job although it is very hard and I don't know how long he can keep up the pace of being gone three months at a time.
Sue Carol
It's amazing how your guest tells us we have to sacrifice when seem to do nothing but!
We work to keep our cars running- because they've taken our trains away and gas is a major expense.
We work to pay for deductibles so high that they would have been the price for the services a decade ago.
When the vast wealth of this country goes back to the workers we will see a rich society and economy full of innovation and optimism.
My, then 58 year old, husband lost his IT position from a large financial company in 1998 then again in 2001 after companies started to off-shore their IT projects. He was only able to get 2 or 3 job interviews between 9/01 to 4/04. This was a man with 30 years experience of IT experience from his starting position as a computer operator to the head of an IT department. Luckily he found a job in 2004 at 1/2 of his previous salary and he was thrilled to make that salary. The man wanted to work. The job search process was frustrating on multiple levels including having young interviewers with a beginning to possible intermediate level of IT knowledge ask him pertinent questions and discounting him as an 'old guy' who couldn't possibly understand IT. This was a man who designed mutual funds and other financial processing software that is still used today. It was horrifying to watch a once vibrant man begin to lose faith in his future.
The financial costs were enormous. We lost 2/3 of our income for almost four years (he was out of work for months between 1998 & 2001) while we had three children in college. In order to survive we used all of our retirement savings. The only silver lining is my public sector pension. My husband is now 67 years and plans to work for another 18 to 24 months in order to pay off debts.
The prejudice against older workers is not based on facts. When companies claim concern about the older worker leaving within two to five years, I have to shake my head. What data supports that younger workers are going to stay longer then two or five years and why would they remain loyalty to any company? I've told my adult children that there is no loyalty on the part of companies towards their workers so it's foolish to remain loyal to them. My husband worked for fifteen years for a large financial company and created excellent software programs for them. When they lost money on bad investments and wanted to boost their company's profits to insure obscene compensation packages for their top executives and investment bankers (who by the way are the ones who are largely responsible for our current global financial mess), they eliminated 10% of their staff. Over the course of 15 years, they probably eliminated 50% of their staff. That boosted their profits. Companies will lay off and eliminate jobs for any number of reasons and maybe the only protected jobs are at the top. Everyone is self-employed now and they need to behave like independent contractors.
Teece Capitalism gone wild was set loose starting in the 70's as manufacturing moved south or into states where they could gouge the workers pay and benefits. Then moved those jobs to Mexico over seas for greater profit margins for the greedy bastards at the top. No new tariffs on products brought back to the states (another way to make them contribute) As Elizabeth Warren has so succinctly pointed out. Moving those foreign made products on roads that we have all paid for etc. Both parties sold the American worker "down the pike" as my WWII Teamster father always says..."sold the American worker down the pike" Allowing corporations to "rule the world" (Professor David Kortens great book)
I am wondering what the guest think about the effort by unions to grow and demand higher wages and better benefits of corporations like Wal Mart. Have folks heard that figure that 6 Wal Mart family members make what 140 million working class Americans make.?
I tried to get this question addressed before by other parties, but I did not get a reply.
I am 65 and my wife is 70. We tried to get a Reverse Mortgage and were declined because we did not have enough equity in our home. We were told that when they change the loan equity ratio we could reapply and could get approved.
My wife and I consider ourselves unemployed and are constantly seeking employment.
If the government changed the rules on Reverse Mortgages, we could live comfortable and longer seek employment.
Hasn’t the powers that be considered this for the senior citizens of the USA?
Please make sure everyone understands they cannot earn more than coffee cash if they elect SS benefits at 62. At full retirement age you do not have to return any benefits, hence why many people wait until 66.
With Wal Marts almost every 45 miles across the US and being the one if not the biggest employer in the US. With 6 family Wal Mart members making what 140 million working class Americans make. Should the boomers who are struggling just accept their plight and get greeter jobs at Wal Mart until they are 65?
Let us talk about age discrimination. I lost my job three years ago and am now 65. I am happy to work late into life, but no on wants you when your as old as I am. When the people doing the hiring are in their 30s and 40s the older worker does not stand a chance. And I know many in my age cohort who are having the same problem. Maintaining good health into the older years, 30 and 40 years of experience, a good work ethic? Meaningless in this labor market.
I'm disappointed, Diane, that so much of your show on babyboomer retirement is spent on rehashing old info like calculations of social security benefits, etc. I wish you had guests who were in their 60's, had their position eliminated as a result of bad managment by greedy corporations, will never find a decent full time job again, forced into 401k's by corporations who wanted to get out ofdefined benefit pensions, and faced with the awful difficulty of finding health care insurance.
Talking heads just rehash the same info over and over again and have seemingly lost contact with the real world. Stop just quoting your statistics.
Don't even get me going on 401k's! The majority of workers do not have the skills to deal with financial investments. Forget rollovers, investment options, etc. they simply don't understand the instrument.