Older Americans were just starting to get back to work after COVID-19 either pushed them into an early retirement or left many unemployed, but the new COVID variant might alter those plans.
The latest variant is known to be highly contagious, and it’s already spread across the globe, including the U.S., U.K., Germany and India. The virus might deter some older Americans from returning to the workforce or staying in the labor market, depending on their jobs, financial status and fear of contracting COVID, experts said.
An earlier retirement does not necessarily equate to a secure one. Over the last 25 years, workers 55 and older accounted for 80% of the growth in the labor force, said Richard Johnson, director of the program for retirement policy at Urban Institute. “Employers are increasingly relying on older workers to fill their staffing needs,” he said. For some older workers, staying in the labor market is the better alternative to retiring with nothing to do, but for others, it’s necessary, especially if they haven’t saved enough for retirement and Social Security benefit checks won’t cut it.
“The new COVID variant is bad news for older workers,” said Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis.
The minority of older workers who can choose not to work may simply stop working, Ghilarducci added, but that isn’t a common scenario.
A forced retirement, as many Americans have experienced because of the pandemic, can put a financial, emotional and mental strain on older workers, who weren’t yet prepared to make ends meet in their older age. “A lot more people will be retired before they want to be,” Ghilarducci said.
There were about 400,000 fewer workers ages 55 to 64 years old in the workforce during the first half of the pandemic, Johnson said, but by the beginning of 2022, the numbers for workers in their late 50s and early 60s were restored to where they were shortly prior to the pandemic.
That’s not the case for workers 65 and older, however. This demographic has continued to see a decline in participation, to the tune of about one million fewer workers in the labor force, Johnson added. Over the last 25 years, however, this age group has been more prevalent in the workforce than ever before, thanks to an underlying population that is getting older and the fact that more workers continue to work later in life, Johnson said.
Lower-income employees and those in the leisure and hospitality industries suffered from the effects of the pandemic, as well as people with less than a college degree, the experts said.
The new variant will also affect the older workforce by constricting business activity, with fewer people going out to eat, shop or travel, which will impact the industries that employ many senior workers, Johnson said. Employers are already experiencing a labor shortage, due in part to the decline in older worker participation.
The latest contagion can be dangerous for older Americans, including those who work jobs that require them to be on site and regularly interacting with others, Ghilarducci noted. Mask mandates have also been relaxed, elevating the risk for some individuals, she added.
“I suspect with this new variant that older workers who can’t work from home will be more severely hit by the recession this new variant causes,” Ghilarducci said.