Older Workers Are Underrepresented In “Safe” Jobs in the COVID-19 Recession

The COVID-19 recession has changed the risks of working. Some people work in jobs at risk of short- and long-term elimination—many workers already have been laid off or soon will be. But for the many workers still on the job, especially older workers, there are new risks of becoming ill or dying from COVID-19. Others are in safe jobs, meaning they are employed in work that can be done from home. These workers are not in high danger of being laid off.

Using analysis from the Federal Reserve Bank of St. Louis (see charts below), we find that older workers are disproportionately represented in jobs that have high economic and health risks and are underrepresented in safe jobs.

Close to one-third of older workers (18.4 million workers older than age 50) face serious risk of illness or unemployment because of the jobs they hold. Given the nature and severity of the risk faced by these workers, we categorize occupations into three groups based on the risk of unemployment and the risk of getting sick: occupations on the front lines (e.g., janitors, truck drivers and personal care and home health aide workers); occupations where workers will likely be on the sidelines (e.g., retail salespersons, food servers and machine assemblers); and “safe” occupations (e.g., computer programmers, actuaries and financial analysts).

Unemployment risks are income loss and premature retirement. Work risks are that older workers and their families are highly exposed to serious COVID-19 illness. Increased occupational health risks and job losses are affecting workers of all ages, but older workers are disproportionately represented in occupations that are at high risk of layoff and are situated in dangerous front-line occupations.

Moreover, one significant difference between today’s jobs crisis and those of the past is the demographic makeup of the labor force. In 2019, 34 percent of workers were ages 50 and older, totaling almost 53 million workers. This demographic shift has serious policy implications (retirement reform, implementation of anti-age discrimination laws, expansion of social security benefits, etc.) for the upcoming recession because the U.S. workforce has never been older since record-keeping began in 1948 by U.S. Bureau of Labor Statistics.

We used the Federal Reserve Bank of St. Louis definition of which occupations are considered highly prone to mass layoffs. These are jobs that are nonessential to public health or safety (i.e., as opposed to police, firefighters), nor are they easy to perform from home (i.e., as opposed to computer programmers, tax preparers, statisticians and some office and administrative positions). They are jobs that cannot be completed off-site (for a more detailed list, see Dingel & Neiman, 2020). Workers in these jobs also are less likely to be salaried employees. Occupations with high health risk were identified based on essentiality and the level of direct patient contact.

Older Workers on the Front Lines

Older workers in front-line occupations face particular risks. Research shows that older workers are more vulnerable to illness and to the deadly and debilitating effects of COVID-19, especially with the dearth of inadequate protective gear and inadequate sick leave. Moreover, older workers on the front lines are more likely than workers of all ages to not have paid leave (54 percent versus 38 percent). Overall, 6.8 million older workers (13 percent) are employed in these occupations. They are overrepresented in all of the following low-paid front-line occupations.

Source: Author’s calculations from the Current Population Survey Annual Social and Economic Supplement 2019

Older Workers on the Sidelines

While all industries will be affected, some are already showing high levels of job loss and are likely to lose even more jobs in the coming months. Based on the demographics of workers in higher risk industries, older workers in particular are set to be affected by virus-related layoffs. Among the 53 million workers ages 50 and older in the economy, 11.6 million, or 22 percent, are employed in these occupations. They are underrepresented in only one in four of these occupations. Many establishments in these industries are facing a high likelihood of closure in areas with more severe COVID-19 outbreaks or in areas with necessary strict shelter-in-place orders.

Source: Author’s calculations from the Current Population Survey Annual Social and Economic Supplement 2019

Older Workers in “Safe” Jobs:

Older workers not facing high risks of unemployment or of falling ill include “knowledge workers” and people who do most of their work on computers. Around 7.6 million older workers (or 14 percent) in these occupations—such as corporate executives, information technology managers, financial analysts, accountants and insurance underwriters—are not facing particularly high risk of unemployment or sickness. Older workers are overrepresented only in one occupational category, which is the legal sector. Although unlike many tech companies that continue to hire more people even in the midst of the COVID-19 crisis, large and mid-size law firms responded to economic pressures caused by the pandemic with pay cuts, layoffs and lower partner payouts. Three of the latest law firms to announce pay cuts are Arent Fox; Curtis, Mallet-Prevost, Colt & Mosle; and Loeb & Loeb.

Source: Author’s calculations from the Current Population Survey Annual Social and Economic Supplement 2019.

Although the COVID-19 recession crisis differs from previous recessions, one fact remains constant—recovery from a recession always is slower and more difficult for older workers. Displaced older workers are more likely to experience another layoff and experience longer spells of unemployment in a recession. When they do find a job, usually it pays considerably less than did their previous job. Additionally, the sudden decline in 2020 in average U.S. earnings also could lead to a permanent and substantial cut in Social Security retirement benefits of near retirees.

Many older workers never recovered from the economic aftermath of the 2008 Great Recession; they were either forced into to low-paying, part-time occupations or became gig workers. Now, those same occupations (e.g., warehouse workers, ride-share drivers and home health aides) are facing higher unemployment or health risks or both, pushing those underemployed workers into an even more fragile economic position.

Policy Recommendations

Forced retirement before Medicare age is going to rise. We need to lower the Medicare eligibility age to 50. Job loss often forces older workers into early retirement. We found that from 2008 to 2014, at least 52 percent of retirees older than age 55 left their last job involuntarily—the result of job loss or a deterioration in health. Many older workers won't make it back into the labor market when it recovers. Instead, early retirement means most will have less retirement savings to live off of and will face cutbacks, a drop in living standards or deprivation as they age. And the COVID-19 recession will make the situation worse.

We will need longer unemployment benefits and enhanced benefits. If an older worker is out of a job, it will take them longer than their younger counterparts to find a new one.

Because retirees are going to be claiming Social Security benefits at an earlier age, we will need to raise Social Security benefits. The coronavirus recession will negatively affect many older workers, at all earnings levels, because of massive unemployment at a vulnerable age.

Aida Farmand is a doctoral student in Economics at The New School for Social Research in New York City. Teresa Ghilarducci, Ph.D., is the Bernard L. and Irene Schwartz Professor of Economics and Director of the Schwartz Center for Economic Policy Analysis (SCEPA) at The New School for Social Research.