If you lost your job during the recession and found another after a long spell of unemployment, you probably already know what a new study found: Older workers took substantial pay cuts when they finally did land new jobs.
Workers of all ages generally found positions that paid less than what they had been earning when the economic recovery got under way in June 2009. But the wage disparity grew wider as people got older.
For example, the Urban Institute study found that workers 25 and up earned a monthly median income of $1,850, or 16 percent below the $2,200 they made before they got laid off. If that wasn’t bad enough, workers ages 50 to 61 saw their median monthly incomes of $2,598 fall by even more when they got rehired – 23 percent.
The oldest of workers, those 62 and up, really got socked in the wallet. Their median monthly earnings of $2,074 plummeted to $1,100 when they landed a new job, barely half what they’d earned before they got laid off. Many in that age group earned less because they worked fewer hours or part-time, perhaps because employers were reluctant to hire them, the study said.
Some older workers felt they had better odds of getting struck by lightning or winning the lottery (the latter was preferable) than finding a job, let alone a comparable one.
One in two unemployed adults ages 25 to 49 found work within seven months of losing their job between May 2008 through March 2011. It took workers ages 50 to 61 more than nine months to ï¬nd work during that time. Only one-third of adults ages 62 and older found a job within 12 months of becoming unemployed, and only about two-ï¬fths (41 percent) became reemployed within 18 months.
About half the workers laid off after age 62 – when eligibility for early Social Security retirement beneï¬ts begins - dropped out of the labor force within nine months of losing a job. Not coincidentally, Social Security retirement claims surged in 2009 as the unemployment rate soared.
Photo credit: Marshall Astor via flickr.com
Follow me on twitter @cfleck1