November 3, 2020
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
October 29, 2020
Disability Accommodations Help Workers
This big number may surprise you: one out of every four adults feels they need some type of accommodation by an employer for a medical condition or disability.
This finding comes from a study in the Journal of Policy Analysis and Management that established a very inclusive standard for determining the need for employer accommodations. The researchers concluded, after following individuals 18 and older in their study for four years, that their employment rate was higher when they received support.
The Americans with Disabilities Act of 1990 requires employers to provide workers and job applicants with a “reasonable accommodation.” But disabling conditions aren’t always visible, and many people never ask employers for assistance. In addition, some employers – particularly small firms – may see accommodations as too costly.
In their 2014 supplement to a periodic RAND survey, the researchers found that 23 percent of workers and unemployed individuals said “yes” to a broad question designed to get a more accurate estimate of need than standard surveys: Does, or would, a special accommodation for your health “make it easier for you to work?”
This group was made up of workers who were already receiving an accommodation, as well as employed and unemployed individuals who felt they could use such support.
Workplace accommodations range from small things like buying a standing desk for an office worker with acute sciatica to reassigning a warehouse worker to a less physical task after he develops back problems. About half of the people who said an accommodation would help them received one – and the benefits were clear.
Between 2015 and 2018, their employment rate held steady at around 85 percent. But the rate for the people who weren’t being accommodated fell sharply, from 92 percent to 72 percent, according to the study funded by the Social Security Administration. …Learn More
October 27, 2020
Retirement System Urgently Needs Fixing
The state of our retirement preparedness is captured in this fact: about half of U.S. private sector workers at any given time are not enrolled in an employer retirement plan.
To be clear, they are not currently enrolled. Some of them have participated in a plan in the past or will in the future. But this inconsistency is the problem, largely because so many employers still don’t offer 401(k) savings plans to their employees.
The financial toll of not saving consistently is modest retirement account balances. Yet saving has become increasingly urgent as traditional pensions have virtually disappeared from the private sector and Social Security is replacing less of workers’ incomes over time.
In 2019 – after several years of economic growth and a surging stock market – the typical working household, ages 55 to 64, that saves in a 401(k) had only $144,000 in its 401(k)s and IRAs combined, the Center for Retirement Research found in an analysis of the Federal Reserve’s 2019 Survey of Consumer Finances.
That’s just $9,000 more than they had in the 2016 survey, and $144,000 won’t go very far.
A $144,000 account would yield $570 per month for retirement if a couple purchases an annuity that pays a guaranteed income for the rest of their lives. For most retirees, the annuity payments – totaling just under $7,000 per year – would be their only source of income outside of Social Security.
There are also enormous differences between high- and low-income households’ savings, which reflect the nation’s economic disparities and uneven employer coverage. The highest-income older households in the study had $805,500 in their combined 401(k) and IRA accounts, compared with just $32,200 for low-income households. …Learn More
October 22, 2020
Cognitive Decline Meets COVID-19 Scams
The federal government warns that older Americans are being targeted by a battery of financial scams, including telemarketers offering to do contact tracing – for a fee – or to reserve a slot for a future vaccine. Others are soliciting donations to charities purportedly helping people in need during the economic slowdown.
COVID-19 makes this a perilous time for people struggling with cognitive decline.
Few can escape a deterioration in their cognitive capacity as they age. It’s just a matter of degree and speed. But the faster it happens, the more damage it can do, the FINRA Investor Education Foundation concluded in a new study.
The study was based on surveys of more than 1,000 older residents in Chicago retirement communities and subsidized housing – average age, 80. The same people were periodically asked questions with varying degrees of difficulty about their general financial knowledge and investments and were asked to compare and calculate percentages.
The older people who either initially had less understanding of financial concepts or experienced a faster decline in their knowledge made poorer financial decisions in exercises that simulated real-world decisions.
This included a vulnerability to scams, which was assessed by asking the older people to agree or disagree with statements like this: “If a telemarketer calls me, I usually listen to what they have to say.” (Not recommended.) And this: “If something sounds too good to be true, it usually is” (Count on it.)
To prevent scams, older people – and their caregivers – need to anticipate the financial damage that cognitive decline can cause. …Learn More
October 20, 2020
Expect More Moms to Sacrifice Careers
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.
Last 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
October 15, 2020
Older and Self-Employed – a Diverse Lot
Self-employed workers who are 50 and older fall into a hierarchy of sorts, a new study finds.
The largest group is the 75 percent who work independently in jobs like freelancer and gig worker. Their average earnings are low – $18,000 a year – and they are more likely to be women or Hispanics.
The other 25 percent of the self-employed older workers are primarily white men and are evenly divided between business owners and managers who work on a contract basis. These individuals tend to be doctors, lawyers, or executives in industries ranging from finance and construction to retail.
To get a better handle on who is choosing self-employment and why, University of Michigan researcher Joelle Abramowitz analyzed 2016 survey data from the Health and Retirement Study. These data included not only older workers’ employment status but also specific information about their employers, industries, and occupations.
The self-employed account for roughly one out of five older workers, but the arrangement is especially popular among boomers over 65 – a third of the workers in this age group are self-employed.
Abramowitz’s research, funded by the U.S. Social Security Administration, finds a lot of diversity in the jobs the self-employed do and in their perceptions of work.
The low-paid independent workers dominate jobs like caregiver, cleaner, farmer, artist, and beauty industry worker. Many view themselves as “retired” and say they would rather not work but apparently need to supplement their retirement income.
In contrast, the owners and managers are far less likely to see themselves as officially retired. Compared with the independent workers, they earn considerably more and are wealthier. The net value of their financial, housing and other wealth exceeds $1 million on average.
Their attitudes are different too. …Learn More
October 13, 2020
The Economics of Being Black in the U.S.
The COVID-19 recession demonstrates an axiom of economics. Black unemployment always exceeds the rate for whites, the spikes are higher in recessions, and, in a recovery, employment recovers more slowly.
A record number of Black Americans were employed in 2019. But when the economy seized up in the spring, their unemployment rate soared to 17 percent, before floating down to a still-high 12.1 percent in September. Meanwhile, the white unemployment rate dropped in half, to 7 percent.
The much higher peaks in the unemployment rate for Blacks than whites and the slower recovery are baked into the economy.
This phenomenon occurred during the “jobless recovery” from the 2001 downturn. When the economy had finally restored all of the jobs lost in that recession, the Black jobless rate remained stubbornly higher.
And after the 2008-2009 recession, as the University of California, Berkeley’s Labor Center accurately predicted at the time, Black unemployment hovered at “catastrophic levels” longer than the white rate did. This disparity is now the issue in the COVID-19 recession.
Geoffrey Sanzenbacher, a Boston College economist who writes a blog about inequality, gives three interrelated reasons for Black workers’ higher unemployment rates.
First, “The U.S. still has a tremendous amount of education inequality, and the unemployment rate is always higher for people with less education,” he wrote in an email. Despite the big strides by Black men and women to obtain college degrees, roughly 30 percent have degrees, compared with more than 40 percent of whites, he said.
Second, Black workers without degrees are vulnerable because they are more likely to earn an hourly wage. An hourly paycheck means that a company can cut costs by simply reducing or eliminating a worker’s hours. “It’s much easier to lay off hourly workers, whose employment is more flexible by nature, than salaried workers,” Sanzenbacher said. …Learn More