The job market cooled off somewhat with employers adding 263,000 jobs in September. The modest job growth number suggests the Federal Reserve’s aggressive interest rate hikes are starting to weigh on the labor market.
Yet another month of positive job growth, along with the current 3.5% unemployment rate, underscore the pressure on the Fed to stick with its tighter monetary policy.
In other words, the odds of a recession and higher unemployment rates within the next 12 months or so are uncomfortably high.
Whether a recession emerges, or the economy manages to sputter along in low gear, the people who will find themselves out of work or lose the ability to negotiate better wages are those who traditionally face the most discrimination in the labor market, notes economist Dean Baker at the Center for Economic and Policy Research. Black and Hispanic workers, people with less education, and people with criminal records.
Read: If the jobs market is so good, why so much talk of layoffs and rising unemployment?
“Not only will millions of these workers lose jobs, tens of millions of workers at the bottom half of the wage distribution will be forced to take pay cuts,” he writes.
Baker is spot on. I would add older workers to his list with ageism and age discrimination deeply rooted among employers.
“Employers have certain biases about older workers,” says Carl Van Horn, founding director at the John J. Heldrich Center for Workforce Development at Rutgers University and professor at the Bloustein School of Planning and Public Policy. “They aren’t tech savvy—wrong. They cost more with healthcare—wrong. They don’t deal well with younger workers—wrong.”
Read: Help wanted: No over-50s need apply
The stereotypes are deeply wrong but hiring prejudices like these among employers are why older workers more often fall into the ranks of the long-term unemployed than their younger peers. (Government statisticians define the long-term unemployed as those without work for at least six months.)
“In the past 20 years it has been true that older workers who lose their job take longer to be reemployed,” says Richard Johnson, economist at the Washington, D.C. based Urban Institute.
Read: ‘Americans don’t believe ageism is real.’ This state wants to stamp it out.
For example, half of unemployed workers ages 50 to 61 took over nine months of job search to find work between May 2008 and March 2011, according to an Urban Institute analysis by Johnson and Barbara Butricia. Unemployed workers in their 50s were about a fifth less likely than their counterparts ages 25 to 34 to become reemployed each month during this time frame. Unemployed workers 62 years and over were even less likely to find work.
Read: Living to 100: Venture capitalists are waking up to opportunities in the longevity economy
Losing a job is hard financially and emotionally at any age. The blow is especially hard on those who fall into the ranks of the long-term unemployed since, in a vicious cycle, the longer anyone is unemployed the more reluctant employers are to hire them. “The long-term unemployed get frustrated after a while. They get so many rejections,” says Kenneth Lang, a career coach, LinkedIn expert and co-founder of My Networking Central.
Adds Van Horn: “Unemployment takes an enormous emotional toll on older workers. They fear that they will go into economic ruin.”
Read: Some older workers are being welcomed back to the workforce
Stu Hothem, now age 49, certainly found unemployment unsettling. He was laid off from his job in North Carolina as director of platform management at a website in 2019. He used the layoff as an opportunity to move to New Jersey to help his mom. The move paid off for family reasons and he had built up savings over the years. Nonetheless, Hothem had been working since before college and he found it disconcerting to find himself unemployed for 11 months. “My identity was really wrapped up in what I did,” he says. “It was a humbling experience.”
The prospect of a recession which may or may not happen over the next year or so is sobering. Among individuals there isn’t much you can do to prepare for the prospect of getting laid off during an economic downturn beyond the basics of nurturing your network, shoring up household finances, and making sure your resume and LinkedIn profile are up-to-date. “Don’t drive yourself crazy worrying about it,” says Van Horn. “But be prepared to pivot.”
However, there is much policy makers and worker advocates can do to boost the odds of a successful job search among laid off experienced workers. For example, the federal-state job centers and employment services operating throughout the country could focus more on meeting the needs of older workers. Experienced workers who lose their job probably haven’t looked for work for years, perhaps decades. They may be unfamiliar with online job search methods and tools. Training staff to better meet the job search challenges of older job seekers would pay off. So would focusing greater resources at skill development among older workers.
“They get less training and less intensive job help compared to their younger peers,” says Johnson.
An intriguing experiment in New Jersey suggests the promise from developing a coordinated support network targeted at the older long-term unemployed. The New Start Career Network was a six-year experiment launchedin 2015 and run by the Heldrich Center and partners. The statewide experiment helped older (ages 45-plus) long-term unemployed New Jerseyans find work. Key to the experiment was the network of volunteer career coaches who offered free one-on-one and group coaching sessions. Their support was supplemented with a range of free services, such as tutorials on improving LinkedIn profiles and training for job interviews. The program also emphasized networking and peer encouragement.
(The experiment ended earlier this year. Van Horn hopes that institutions and advocates involved in working with the long-term unemployed will take advantage of the insights gleaned from the experiment.)
Among the volunteer coaches was Kenneth Lang, the LinkIn expert. He had been unemployed several times himself during his career so he could identify with what people were going through. Among the benefits to the program was the importance placed on community and mutual support among the long-term unemployed. Networking and peer support highlighted the reality that they weren’t alone. “People can commiserate. They can share,” he says. “Maybe you’ve lost your job, but you haven’t lost your experience.”
Hothem became a New Start member after learning about the program at a job fair in 2019. He’s now employed with a New York City based company in a senior product manager role. He liked the people he met through New Start. He appreciated the program’s combination of personal accountability and community support offered by the program. “It’s a job to look for the next job, but they provided the tools and support network at a time when it’s easy to fold up your tent,” he says.
The demographics of aging means that the American economy is increasingly reliant on the participation of older workers. Job loss has serious negative impacts on workers at any age. But with the aging of the workforce, institutions geared toward helping people find work should invest in developing approaches that better prevent older workers from falling into the ranks of the long-term unemployed.
The next recession is never far away.