Blue-Collar Workers Often Retire Early

Construction workers

Construction and factory workers, truck drivers, and cleaning crews don’t always have the flexibility to work a few extra years to beef up their monthly Social Security checks.

Several blog readers stressed this point in their comments on a recent blog article, “Changing Social Security: Who’s Affected.”

Lorraine Porto retired from a desk job, but her family is filled with craftsmen, carpenters, electricians, farmers, and truckers who worked “until they were worn out.”

People in white-collar jobs don’t always appreciate “just how tough and demanding it is” to climb poles every day, descend into manholes, build skyscrapers, or bring in the hay in 90-degree heat and sub-zero temperatures, Porto said.

Her comment was in response to the article, which described a study about a hypothetical increase in Social Security’s retirement ages. It found that if Congress were to increase the earliest possible age for starting Social Security from 62 currently to 64, blue-collar workers would have much more of an adjustment to make.

Blue-collar workers, Kenneth Wegner wrote, “are less physically able to remain in their jobs.”

Policymakers are well aware of this concern, and a proposal to increase the early retirement age isn’t currently on the table. Yet many people are deciding to postpone retirement on their own. The general trend in recent decades is for all workers – even some people in physically demanding jobs – to delay when they collect Social Security.

That wasn’t possible for Mark Roberts. The former electrician, who worked on construction sites in Austin, Texas, said he had to go on disability due to an old foot injury that got worse over time. Now 67, he said he wasn’t able to work long enough or earn enough to save for retirement and ekes out an existence on his Social Security checks.

“I have to survive for a month on what I used to make every week,” he said.

White-collar workers who lose their jobs can also find themselves in a similar predicament. …Learn More

Photo of a pill bottle

Opioids and Workers with Disabilities

Everyone knows about the dangers of opioid addiction. But prescription opioids can be useful to people with physical disabilities if they ease their pain so they can hold down a job.

A new study finds that this might be occurring in certain parts of the country where more opioid prescriptions are written.

But this finding is at odds with other evidence in the study that these same areas also see increased enrollment in Social Security’s disability program. A possible increase in employment is puzzling, since this program has strict limits on how much people can earn.

Adibah Abdulhadi at the University of Wisconsin reconciled her seemingly contradictory findings this way: some people with disabilities, including some who rely on opioids, may be working more – but if they are, they’re mostly in part-time jobs.

Under Social Security’s benefit rules, workers on disability can keep their benefits if their earnings do not exceed the program limit of $1,260 per month in 2020. A part-time job can be a way to stay below this income threshold.

The impact of opioid use on the labor market was analyzed on a county-by-county basis. In counties with higher opioid prescription activity, the unemployment rate fell by eight-tenths of 1 percentage point over the study’s four-year period, though this result wasn’t conclusive.

The decline was also confined to the most urban counties, which tend to have more robust job markets than rural areas and also more employers that can accommodate workers’ disabilities. Strikingly, the higher prescription activity was also linked to an increase in part-time employment.

While the impact of prescription activity on employment is inconclusive, the impact on disability is clear. “Greater use of opioids consistently leads to greater use” of disability insurance, Abdulhadi said.

To read this study, authored by Adibah Abdulhadi, see “The Effects of Opioids on Labor Market Outcomes and Use of Social Security Disability Insurance.”Learn More

Man building a house

Changing Social Security: Who’s Affected

Due to the strength and agility required for physical labor, half of blue-collar workers sign up for Social Security as soon as they’re eligible – at age 62.

But a large majority of white-collar workers wait so they can lock in a larger monthly check for retirement.

White-collar vs Blue-collar age 62In a new study, Lindsay Jacobs at the University of Wisconsin found that blue- and white-collar workers would also respond very differently to potential increases in the program’s two benchmark ages: the earliest eligibility age and the full retirement age.

Raising the earliest eligibility age to 64 would not change retirees’ lifetime benefits. But a two-year hike in the full retirement age would amount to a significant benefit cut – and with the depletion of Social Security’s trust fund projected for 2035, some version of this change might one day be considered.

The first change – raising Social Security’s earliest claiming age – would require a much bigger adjustment by blue-collar workers. Jacobs predicted that this group would respond by working an extra year, on average, compared with a few more months for white-collar workers.

Requiring workers to wait longer for their benefits does have a financial advantage: a larger Social Security check every month. The problem for some blue-collar workers is that they couldn’t make it to 64. One result, then, is that increasing the early retirement age would push up applications to Social Security’s disability program, according to the study funded by the Retirement and Disability Research Consortium.

Jacobs gauged the impact of raising the early retirement age based on how quickly workers’ declining health would affect their ability to work as they age. To understand how they would react to raising the full retirement age, she examined how workers’ decisions about retiring, saving, and signing up for Social Security would change under various policies. She classified the workers as blue- or white-collar using data that describes job tasks to show that the physical demands at work influence these decisions.

The second possible change would increase the full retirement age by two years, which amounts to an across-the-board cut in benefits regardless of when workers claim them. In response, white-collar workers, who are already more inclined to hold out until the full retirement age, would be more likely to work even longer to reach the new, higher benchmark age.

But blue-collar workers would bear the brunt of the benefit cuts, because their physically demanding jobs would often prevent them from working longer to offset the cuts. …
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Senior man working

Men’s Health and Disability Applications

It’s often true that men in their 50s who’ve done physically demanding jobs for decades develop debilitating conditions. But they’re not old enough to retire and collect Social Security.

Particularly during economic downturns, many of these workers have turned to a fallback option: federal disability benefits.

While economic conditions and policy changes are primarily responsible for the year-to-year changes in applications for disability, there is growing evidence of worsening health and functioning among men in their 50s and 60s. A new study has found that these trends have also increased the number of older workers who may qualify for disability benefits.

The researchers first confirmed past studies showing that this population’s health has gotten worse since the 1990s. More of them are suffering from various debilitating conditions, including asthma, hypertension, diabetes, and cancer.

The older workers also increasingly reported having trouble carrying out some basic activities required to do their jobs, such as reaching overhead, kneeling, and standing for two hours. Evidence of the older workers’ deteriorating condition over time was confirmed in separate analyses of two different surveys: the Health and Retirement Study and the National Health Interview Survey.

The heart of the study was to measure the potential impact of declining health and work capacity on the Social Security disability program.

The analysis finds that the deterioration in men’s health is likely to have increased the share of these men who could qualify for disability benefits by more than 15 percent between the mid-1990s and mid-2010s. The rise in potential demand for benefits was unrelated to the aging of the baby boom population, which the researchers accounted for.

Economic downturns like the Great Recession increase disability applications and awards. But those increases are usually temporary. …Learn More

Expect More Moms to Sacrifice Careers

Woman working from home

Working mothers scrambled when the schools shut their doors last spring, but they found ways to cope. The 2020-21 school year may push many of them over the edge.

Child Care for men and womenLast spring, one in four women nationwide who’d either quit their jobs or were laid off blamed the difficulties of working after the schools closed or they lost child care to COVID-19, a Northeastern survey found.

Alicia Sasser Modestino is in the midst of repeating the survey but believes that the situation has only gotten harder for working mothers this fall.

“When you look down the barrel of a full school year of hybrid or remote learning,” the stopgap measures mothers deployed last spring “are not sustainable,” said Modestino, a mother of four and research director for Northeastern’s Dukakis Center for Urban and Regional Policy.

“If it’s not going to be Congress giving money for schools to reopen safely or the state opening child care centers, a parent is going to have to give up their job, and we know from history that it’s more likely to be women,” she said.

The impact of school closings on Millennials and Generation X can’t be overstated. In 75 of the 100 largest U.S. school districts, returning to school has meant students connecting to Zoom from their bedrooms or kitchen tables.

In the COVID-19 pandemic, a disproportionate share of women have been laid off, because they dominate face-to-face industries – nursing, retail, customer service – that are more vulnerable to closing. But something new is happening to mothers in this downturn. …Learn More

Video: Boomers in RVs Seek Job, Security

Sales and rentals of recreational vehicles have skyrocketed during the pandemic as people working remotely use their newfound freedom to move their workplaces to the great outdoors.

Outdoorsy – the Airbnb of recreational vehicles (RVs) – reports that 40 percent of its new rental customers are under age 40. But long before younger adults hit the road, thousands of baby boomers were buying RVs to roam the country in search of work.

Rather than seeking psychological relief from COVID, as younger workers are doing, the boomers – some retired and some unemployed – are looking for financial security.

In this excellent PBS NewsHour segment, Paul Solman talked to boomers who park their RVs at campsites near whatever seasonal jobs they can find at places like Amazon and JCPenney warehouses, sugar beet farms, and theme parks and national parks.

During the summer tourist season, Judy Arnold has been working at Yellowstone National Park in Wyoming. But with so many businesses shut down by the pandemic, she worries about where her next job will come from. “I definitely need an income,” she told the NewHour.

George Stoutenburgh gave two reasons for his wanderlust. …Learn More

Boomers Move into Post-Career Jobs

Post career jobs chartMany baby boomers retire the conventional way – by leaving their career jobs. For the others, the first step in retiring involves stopping over in a different job than they’ve held for years.

A sketch of the older workers who transition to post-career jobs – and their reasons for doing so – emerges from a survey of a fairly elite group of mostly college-educated professionals: clients of the Vanguard investment company.

They made the job transitions for a variety of reasons.  More than half of them either had initially retired but decided to go back to work or were forced out of a long-term job by a layoff, firing, or business closure. However, Vanguard’s clients are apparently in good health, because they rarely made changes due to a medical condition.

The boomers usually changed jobs during their 50s. The post-career jobs were often in entirely different occupations or industries, which required the workers to make big trade-offs, according to the 2015 survey, which was designed by Vanguard and several academic researchers.

The old positions were usually full-time, and, as a result, had rigid schedules. Half of the people who found a new job said they now have flexible schedules. But everyone who moved into a post-career job took a 20 percent pay cut, on average, either because they’re working fewer hours or are in a different industry or occupation where the skills honed over the years are not as valued.

There’s also telling evidence that many of the boomers in post-career employment were eager to make this tradeoff. They typically moved from the career job to the new one in about a month, an indication that many had landed the new job prior to leaving the old one. …Learn More