Posts Tagged "earnings"
December 8, 2020
Video: Young Adults Share Career Setbacks
More than half of young adults are now living with their parents – the highest level in more than a century, according to the Pew Research Center.
This alarming statistic, first featured in a September blog, is the result of a long-term trend that has accelerated during the economic slowdown caused by COVID-19.
In this PBS NewsHour video by Catherine Rampell, young adults 24 to 39 years old who are taking refuge in their parents’ homes talked about their stalled social lives and disrupted careers – their disappointments always tinged with a sense of humor.
They include Marcellus Adams, who was laid off from two jobs, as an auto mechanic and emergency room staffer, and, at 29, has never really lived on his own. Eric Rivera moved from the height of chic – an apartment in the Williamsburg section of Brooklyn – to his parents’ home in a suburb of Trenton, New Jersey. And comedienne Nikki Glaser’s white-hot career suddenly cooled when her shows were canceled due to the pandemic.
They and millions of Millenials and members of Generation Z may pay a price for their setbacks in the form of lower earnings and unplanned-for career trajectories.
But a vaccine is coming, they are young, and they will persist.
December 1, 2020
Caring for a Parent Can Take Financial Toll
Last spring, as COVID-19 tore through the nation’s nursing homes, many people agonized over whether to pull their elderly parents out and assume responsibility for the care.
The fall surge in the virus is no doubt causing more handwringing as adult children again weigh the challenges of home care against concerns about their parents’ physical and mental well-being.
One practical consideration is the impact on the work lives of parental caregivers, who are overwhelmingly women. Recent research has found that “there are long-term costs associated with caregiving reflected in [lower] earnings even long after caregiving has taken place.”
The research involved women in their 50s and 60s with at least one living parent or in-law, though they generally provided care to a parent rather than an in-law.
Workers sometimes downshift their careers in the years prior to retiring, but caregiving can affect whether older women work at all, the researchers found. Among the caregivers they followed, the share who were working fell by nearly 2 percentage points, to about 56 percent, after their duties began. And the caregivers who remained employed worked fewer hours after taking on a parent’s care.
Women also earned less over the long-term if they had spent time as a caregiver. They saw about a 15 percent decline in their earnings by the age of 65 – or nearly $1,800 per year, on average – according to an update of a study initially funded by the Social Security Administration with subsequent funding from the Sloan Foundation. …Learn More
July 21, 2020
Pandemic Puts More Retirements at Risk
Americans’ retirement outlook has gone from bleak to bleaker.
The unemployment caused by COVID-19 has pushed up the share of working-age households not able to afford their current standard of living in retirement from 50 percent to 55 percent, according to a new analysis by the Center for Retirement Research, which sponsors this blog.
The analysis updates a previous estimate, based on 2016 data, to include the harmful effects of surging unemployment. The researchers estimate that perhaps 30 percent of workers – far more than is reflected in the monthly jobless rate – could be affected by layoffs now and in the future. They did not factor in the recession’s impact on the housing and financial markets, which could make things worse.
Unemployment hurts retirement in a variety of ways. Laid-off workers’ paychecks vanish immediately, but they may also earn less in the next job. The depressed earnings, over months or years, reduce the money flowing into their 401(k)s, and the amount they’ll receive in pensions and future Social Security benefits. It may also force some to spend down savings that, had they not lost their jobs, would’ve been preserved for retirement.
Interestingly, the impact on low-income workers is mixed. In one way, they’re protected by Social Security’s progressive benefit formula, which will replace a higher percentage of their earnings as their lifetime earnings decline. But low-income workers have had more layoffs, which widens the gap in their retirement savings – between what they can save and what they should be saving – more than for higher-income people.
The 2020 recession will impact retirement “in a very different way” than the Great Recession, the researchers said. This time, “the destruction is occurring more through widespread unemployment and less through a collapse in the value of financial assets and housing.” However, the lessons of the previous recession can’t be dismissed either. …Learn More
June 30, 2020
COVID: The Challenge for Older Workers
In anticipation of rambunctious children returning to the classroom in the fall, older teachers are sounding alarms about how challenging it will be to make the schools safe for themselves, as well as the children and families.
Their fears about going back to work in a pandemic are shared by older workers around the country with chronic conditions, which increase the mortality rate for people who contract COVID-19.
More than half of U.S. workers who are between ages 55 and 64 are in jobs that can’t be done remotely, a new study estimates. Their flexibility to work at home isn’t much different than younger adults.
But older Americans who are weighing whether to return to work face a dilemma that is of less concern to young, healthy workers.
The older workers must choose between “health risks – returning to work before the virus is under control – or economic risks – delaying work until the environment is safe, which may exhaust their resources,” concluded researchers at the Center for Retirement Research, which sponsors this blog.
Jobs that can’t be performed at home were identified in the study by 14 specific tasks, ranging from interacting with the public and handling machinery to rarely using email and standing or walking for most of the workday.
By linking information about jobs to individuals in a national survey, the researchers reported on the ability to work remotely based on the characteristics of the workers themselves. They found that women, who often gravitate to jobs that give them more flexibility or the ability to work part-time, are more likely to be in jobs they can do at home – think about travel agents (85 percent are women) and freelance writers (67 percent).
The analysis also confirmed something the media have reported anecdotally: working remotely is a perk of being a well-paid professional. About six in 10 workers in the highest earnings bracket can do their jobs at home, compared with just over three out of 10 workers in the lowest two earnings brackets. …Learn More
April 23, 2019
Boomers with Disabilities Often Retire
One in four workers in their mid-50s will eventually encounter difficulties on the job, because their bodies start breaking down or they aren’t as sharp as they used to be.
When a new, disabling condition is long-lasting, 63-year-olds – still a young age to be retiring – are two times more likely to stop working than other people their age, according to a new study by Mathematica, a Princeton, N.J., research firm.
The researchers started out with a fairly healthy group of 55-year-olds and followed their career paths through age 67. Strikingly, even people as young as 59 who have experienced a new work-limiting health condition leave the labor force at a much higher rate than those who did not. It’s inevitable that many, though not all, of the oldest workers in this group decide to retire, rather than find a new job.
Of course, the nature of the work factors into whether someone decides they have to retire. When older workers have physically demanding jobs, they are more likely to report a new disabling condition, the study found. It can be extremely difficult to soldier on in occupations such as construction or heavy industry.
With less physical jobs, however, it is more feasible to work longer even with a disability. For example, a lawyer or administrative assistant could conceivably keep working, even if it became difficult to walk.
In addition to the physical challenges, disability couldn’t come at a worse time financially for baby boomers, a significant minority of whom are not well-prepared for retirement.
They would benefit from staying in the labor force as long as possible to save more and hold out for a larger Social Security check every month. …Learn More
March 7, 2019
Graduates’ Pay Ranked for 1,650 Colleges
Decisions about which college to attend or degree to pursue are increasingly driven at least in part by this consideration: will I be able to pay back my student loans?
Countless things determine how much someone earns – smarts, rich or poor parents, high school or graduate degree, being in the right place at the right time. But LendEdu’s new ranking of starting salaries for graduates with bachelor’s degrees from some 1,650 U.S. colleges is essential information, especially when debt is the only option to finance college.
A degree is almost always worth the investment. Georgetown University estimates workers with a bachelor’s degree earn $1 million more over their lifetime than high school graduates. Post-secondary degrees have even bigger payoffs.
The salary rankings turned up some useful and quirky findings. LendEdu, a personal finance website for consumers that sells advertising to financial firms, compiled the salary data for the first five years of employment from payscale.com surveys.
- Ever hear of Harvey Mudd College? The typical recent graduate of this engineering school 40 miles west of Los Angeles earns a bit more ($85,600) than an MIT graduate ($83,600). Harvey Mudd is Silicon Valley’s No. 2 feeder school.
- Graduates overestimate what a degree is worth. The typical college student expects to earn $60,000 but earns only $48,400 in the work world. …