Older workers getting shafted

Remember the phrase, "getting shafted"? Did it come from the movie, "Shaft"? Or was it the other way around? Anyway, older workers are taking some of whatever it is, according to a New York Times business section story this weekend, as well as a US Supreme Court decision from last week. The Times story, by writer Steve Lohr, says that Social Security would be a lot more secure if workers would hang in there for another few years past the 62 or 63 retirement age and keep contributing. However, many employers are not willing to allow that, believing that older workers are less productive and out-of-touch with new technologies.

There are, it seems, too few such workers and employers. The average retirement age for men now is 63 and for women 62. But the emphatic conclusion of recent research into retirement policy and labor markets is that working another two or three years would have a surprisingly powerful impact on the retirement living standards of millions of boomers and on the economy.

The economic gains, according to a report published this month by the McKinsey Global Institute, a research group, would include increased household savings, higher tax collections and a reduction of the fiscal strain on Social Security and Medicare; together, that would add an estimated $13 trillion to the economy by 2025, or about a year's total output of goods and services today.

The reality that Lohr is not willing to confront in a meaningful way is that people are getting laid off in later years -- past the tender age of 40, even -- and fairly often don't have the option of working into their mid-60s.

The Supremes have made it easier, with their recent decision, to sue for age discrimination in job terminations. However, some brave soul is going to have to wade into the courtroom to build a record of decisions against individual employers before the court decision is put into practice.

Low-ball offer

Dan has been offered a job. This is extraordinary, since he's only been out of work for two months. He has turned over a layoff this fast once before, finding a new job before he had to leave the old one. But the problem is the offer is a low ball. By which I mean that it's a $20,000 pay cut, two weeks vacation, a very iffy bonus (his last job was a 25% bonus if goals were met) and no stock options -- another $17,000 cut from last year. All of this I'm willing to live with. We can get by, though our retirement and college savings might suffer. The only aspect that really bothers me is the minimal vacation. It's what a kid out of college would be offered.

A couple of times we've waited out the first year of one of his jobs with meager days off -- one week in the first year. It means we don't visit our families at Christmas, and that our daughters and I have invented what we call "girl trips." Meaning that I take them on trips by myself rather than miss out altogether. Niagara, Washington, DC, Sturbridge Village. They're sweet memories, but they leave me exhausted. Don't get me started about how we're never going to Disney World. Yeah, OK. I have an entitled attitude.

What middle class family doesn't want to go to Disney World once while the kids are young? Dan won't bump up to 15 days vacation for five years. Our daughters will be in high school.

It's not only the particulars of this job offer that have me steamed, but the way in which it's been laid out. It took 2-3 weeks for them to make the offer, after Dan took a drug screening. Who moves that slowly? I wonder if they were trying to make him sweat, make him more desperate, so they could get him cheaper.

They won't tell him the generally accepted work hours, which is maddening. I don't get out until 6 or 6:30 p.m., kind of a late day. How do we know we'll be able to pick up the girls from after-school care every night? It closes at 7, and I have a half-hour drive from my office. This company makes out like it's unreasonable for Dan to ask these questions or to negotiate on the vacation.

He's got interviews with two other companies lined up in the next six days. One interview is the third time he's spoken with the company. But the unemployment rate keeps climbing. Do we dare risk it?

Bring on the advice columns

By now, things have gotten bad enough in the US economy that business columnists are starting to write that perennial favorite -- how to survive a job loss. I checked the number of stories on layoff advice in March and April 2007 and compared them with the same two months this year. The count rose from 29 to 68. Another unofficial indicator of recession. Kathy Kristof of the Los Angeles Times delivers the usual litany about applying for unemployment insurance immediately and asking for details on your severance package, unused vacation, COBRA health benefits and the like. It's a good rundown. But I found this passage a little ill-informed:

If your spouse is still working, your goal should be to live on the one income, plus unemployment benefits, without dipping into savings, Jones said. If no other family members have jobs (or you're single), you will need to consider cutting expenses to the bone.

The biggest mistake that the unemployed make is adjusting their budgets too late. People often assume that they'll get a new job quickly, so they're loath to cut out luxuries such as cable TV and housecleaning and gardening services. But that money spent early on can't be recovered. If it takes longer to find work than you anticipate, you can find yourself economically devastated in record time.

By cutting back immediately, you will have bought yourself extra weeks of solvency, Jones said. If you do get another job in short order, you can just as quickly rehire the gardener and the housekeeper and turn the cable back on.

The author doesn't account for the hardest part of being unemployed, and that is trying to keep things on an even keel for children. Dan and I have always kept regular babysitters through layoffs -- they are more sensitive to being out of a job than a gardener, and they would almost certainly find new jobs before we were able to rehire them.

We try in other ways to keep the bad news from affecting our kids' lives. For example, this time we eliminated their expensive gymnastics classes, but we're still sending them to violin and piano lessons.

Avrum D. Lank, a business columnist at the Milwaukee Journal Sentinel, offers a realistic assessment on balancing your new jobless reality with the fact that life goes on. He quotes Michael P. Haubrich, a financial planner with Financial Service Group in Racine, Wisc.

Calculate how many months of your survival budget shortfall are covered by your liquid assets and credit lines. You now have your timeline to find employment before you have to make drastic financial changes.

I agree that drastic changes should be the last resort. During our first layoff, this really tore me apart, trying to act like everything was normal when it was not. However, having survived a few times, I look back and appreciate that we didn't panic and move in with our parents.

Young, unemployed and invisible

New York Times columnist Bob Herbert writes today that the US Labor Department statistics, which are pretty grim by themselves, fail to count anyone under age 24. Herbert says that 4 million young people between 16 and 24 are looking for work but are not reflected in the official jobless figures. This is bad news for society, Herbert writes.

This is the flip side of the American dream. The United States economy, which has trouble producing enough jobs to keep the middle class intact, has left these youngsters all-but-completely behind....

It’s not as if these kids don’t want to work. Many of them search and search until they finally become discouraged. The summer job market, which has long been an important first step in preparing teenagers for the world of work, is shaping up this year as the weakest in more than half a century, according to the Center for Labor Market Studies at Northeastern University in Boston....

As the ranks of these youngsters grow, so does their potential to become a destabilizing factor in the society.

I love that he gave a nod to the middle class, which I think is in big trouble of disappearing. He ends up by calling on the presidential candidates to figure out how to create full employment, put America back to work. I wonder when things will get bad enough that someone starts to listen.

More income peaks and valleys today

A new study from the Economic Policy Institute shows that family income has become increasingly volatile in the past 35 years. In other words, we're facing more up-and-down swings than a generation ago.

Researchers Jacob Hacker (professor of political science and resident fellow of the Institution for Social and Policy Studies at Yale University) and Elisabeth Jacobs (a fellow in the Multidisciplinary Program on Inequality & Social Policy at Harvard University) have this to say:

Recent analysis shows that families are facing much greater income swings than they did a generation ago. The Chart plots the increase in average family income volatility, showing various peaks and valleys around an upward trend since the mid-1970s. Over the last three decades, volatility by this measure has doubled.

Most Americans have little in the way of easily tapped wealth to tide them over when their incomes drop. It is on the downward trips of the economic roller coaster that jobs, houses, savings, and other things gained on the way up get lost. No wonder Americans are worried about their economic security.

They also put together this nifty chart, which is a little hard to read in this format. Here's a link to the site, which has magnifying glass icon that allows you zoom in.

I'm really excited to find this volatility documented, because it confirms what I've suspected in talking with friends and neighbors. Everyone seems to have a layoff story, and it rarely comes complete with a happy ending.

After they were laid off, people are getting lower-paying jobs, or the family as a whole is required to spend more hours working. By this, I mean that if one parent was staying home with kids, after they layoff they are forced back into the work force.

This bothers me because I suspect -- but can't yet prove -- that the self-same people who argue for "traditional" American values, like a mother staying home to raise children, would also champion corporate America's freedom to downsize at whim.

The boss who laid off my husband in 2001 was a father of three preschoolers. He liked to joke that he had never changed one of their diapers in his life.

The courtesy of a phone call

Today, Dan got a call from a recruiter who represents a law firm that interviewed him two days ago. The recruiter wanted to tell him that they were no longer considering him for the job. Possibly he's "overqualified." We were elated.

Don't get me wrong, we are long since past thinking "overqualified" is a compliment. It's simply something people say to mask a thousand reasons not to hire someone. It's just that those thousand reasons are all more difficult to say. "We realized that Jim's brother-in-law is a much better fit," perhaps. Or, "we hated your hair." Or, "our third-quarter numbers are in the tank, and we're freezing the hire." Who ever knows what irrationality lurks in the hearts of men? No, we were elated just to emerge from limbo. Overjoyed that someone took the courtesy to call. Because as any job seeker will tell you, much of the time, no matter how positive the interview, you are left to stew and wonder.

I remember when it was not this way. It changed sometime shortly after the turn of the century, or maybe right after Sept. 11 when everyone was hurting for many different reasons. Interviewers used to tell you when they would get back to you, and they pretty much kept their word. Even if it was a difficult call to make -- a "no" instead of a "yes" -- at least you knew.

Career counselors used to avise asking for feedback from employers who rejected you. Then you knew what to brush up on the next time. One time an executive editor told me I didn't seem to want the job enough. I didn't "reach across the desk" and grab him by the lapels. Seriously. Now, it's mostly just silence.

A silence that squeezes your soul like a lemon. I even prefer the lapel comment to silence.

Getting started

I'll never forget the first time my husband lost his job. I was eating a tuna sandwich at a diner near our home -- taking a break from what was at the time my professional occupation, writing freelance stories on my home computer. We knew that his company was downsizing -- we later learned management was preparing it for a sale. We didn't think it would be him. He had steadily increased his department's performance and had the numbers to show for it. Then he showed up at the diner in the middle of the day, and the look on his face said it all.

Our kids were preschoolers, and we were completely unprepared for what would turn out to be 20 months of job search that ended in moving from a neighborhood we loved to a new state.

The fourth time Dan lost his job, we knew what we were doing and went into what I've come to think of as layoff mode. We pulled back on contributions to our retirement and college savings. We took our girls out of expensive gymnastics lessons and signed them up for cost-effective softball. We calculated how long the severance would last (10 months, maybe more if we're careful).

We are in layoff mode as I write this. Job loss can be humiliating, and you might wonder why I would put any of this on the Internet for people to read about my family. My husband and I discussed this project at length before I began. We think that it's important for other layoff families to know that they are not alone. Silence surrounds job loss because people feel ashamed, but I think it might be time we got over that. Corporate America certainly has.

Here's a good story in today's New York Times Style section about how people are afraid to tell their neighbors they've lost their job.

Another reason I'm writing this is because I want to document what seems like a tectonic shift in my lifetime. I remember when companies worried about laying people off because they feared they would not be able to attract new employees. No longer. Any dishonor associated with firing people has all but vanished.

At first, employers displayed regret about the necessary cuts -- probably around the time the term "right-sizing" was coined -- early 1990s? Companies acted as though there was an achievable end to the layoffs, a right size they would arrive at. Now, companies seem to have few qualms about regularly cleaning house.

Finally, I see very little understanding among the uninitiated about what it means to have job loss enter your home. Maybe I haven't looked in the right places. But almost no one is making the connection between job loss and societal problems. I came across an extreme, stupid example from a blogger at a business publication, who ridiculed the idea that a layoff ruined his subject's marriage. (I'll put up the link when I find it.)

Five bucks says this guy is single.