An Unemployment Crisis for Older or Younger Workers?
May 22, 2012
The Senate Special Committee on Aging recently held a hearing on how to help older workers find jobs. Though older Americans are seemingly much better off than their younger counterparts in terms of their simple rate of unemployment, long-term unemployment falls disproportionately on older workers. Seeking to address this issue, the Committee proposed a number of solutions, says Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute.
- First, that Congress offer temporary wage and training subsidies to employers who hire those older workers who have experienced long-term unemployment.
- Second, that Congress compensate older workers for accepting lower-paying, full-time jobs.
- Third, that Congress eliminate the requirement that Medicare is the secondary payer for workers 65 years old and older covered by employer-provided health insurance.
- Fourth, that Congress expand job search and training programs for older workers.
By giving preference to older Americans, these policies would incite intergenerational class warfare and should be rejected right out. Furthermore, such policy recommendations are misguided because they target relief to a segment of the population that is suffering least from the recent recession.
- Proportionately fewer older workers (6.6 percent) were unemployed in 2011 than those aged 20 to 24 (14.6 percent) and aged 25 to 54 (7.9 percent).
- The unemployment rate in 2011 for newly graduated men and women with bachelor degrees was 9 percent, far higher than the 4.9 percent rate such young adults experienced in 2006.
- The Pew Research Center has found that older Americans have benefited from appreciation of their homes, higher incomes and lower unemployment rates.
- When these factors are taken into account, older Americans come out ahead of younger Americans, with 47 times the net wealth of their younger counterparts.
- The 2009 American Housing Survey reports that 50 percent of older Americans bought their homes before 1986 and 65 percent own their homes free of mortgages.
- As well as assets, Pew reports that incomes of older Americans have risen four times as fast as incomes of younger Americans.
Furthermore, the committee's recommendations include few assessments of the economic costs of such programs. It is filled with anecdotes from "focus groups" and "experts" in three cities, but lacks reliable data.
Source: Diana Furchtgott-Roth, "An Unemployment Crisis for Older or Younger Workers?" Real Clear Markets, May 17, 2012.
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