Poverty and Poor Health in Older Americans
It is 2020 and more than 25% of the United States workforce is aged 55 or older. Under the official poverty measure, 4.7 million adults ages 65 and older lived in poverty in 2017. The growing number of retiring citizens poses a problem for many systems, including health care, housing, and more. Predicting how and when these individuals will retire, need the assistance of care, etc., could help relieve the systems that will be most affected by the specific and unavoidable massive population of retired individuals.
A Special Committee on Aging, in the United States Senate, conducted a deep analysis of the problem of America’s Aging Workforce: Opportunities and Challenges. Some of the key takeaways are listed below and the source is linked at the bottom of this concept note. We have updated some of the findings with the accelerated growth in unemployment that resulted from COVID-19.
In the US, the number of older individuals over age 55 is growing at a rate that outpaces the labor force’s overall growth. Older workers are also over-concentrated in customer-facing jobs and are harder hit by the Covid-19 pandemic with a 15.6% unemployment rate, the highest level since records began in 1948. Post-Pandemic, the customer-facing jobs may evolve and become remote jobs, such as customer service over the phone or video conference, distance education, crisis line operators, and online retailers’ customer assistance. Addressing older Americans' skills gap to go back into the workforce is a crucial element in addressing the poverty challenges in the aging population.
Fewer older workers are transitioning directly from full-time work to full-time retirement; high healthcare costs and the economic recession are driving older workers towards part-time jobs or becoming self-employed. But the majority lacks the skills for a successful transition into digital jobs, which is where the economic growth is concentrated.
Age discrimination, inadequate training opportunities, working while managing health conditions and disabilities, balancing caregiving responsibilities with work, and preparing financially for retirement are among the main challenges facing an aging workforce.
Over 80 percent of employers say they are supportive of employees who plan to work past the age of 65, but only 39 percent offer flexible scheduling options and only 31 percent facilitate processes for moving from full-time to part-time roles.
Many older workers are struggling to prepare financially for retirement. Roughly one-third of workers do not have access to a retirement plan at work, and many aging workers have not saved enough for retirement and may continue to work beyond when they intended to retire out of financial need.
For many Older Americans, work provides a sense of purpose, and research links work with improved physical, emotional, and cognitive health, financial stability and security, and quality of life.
Older Americans Lack Retirement Savings and Face Poverty
The U.S. Government Accountability Office released updated retirement security estimates based on its analysis of household financial data from the Federal Reserve’s 2016 Survey of Consumer Finances.
An estimated 29 percent of households aged 55 years old and older had no retirement savings and no defined benefit plan at the time of the survey, according to the March 2019 report. That number has not improved since the last time the agency studied the issue in 2015.
The agency reports add to a growing body of research that forecasts rough times for baby boomers and Gen Xers, who are increasingly seen as unlikely to be able to afford retirement (Annuity).
Help is Coming Too Late
When we talk about fighting poverty in the United States, the conversation is often focused on preventative measures such as education or jobs. Thanks to this focus, poverty prevention programs, policies, and corresponding social movements have made significant progress in raising wages, empowering people, reducing poverty levels and changing lives. However, when it comes to an increasing population of low-to-no-income seniors, many preventative measures come too late. Education and retraining initiatives, savings plans, and job creation programs won’t help someone in her 70s or 80s who is struggling just to cover room and board after a lifetime of low-wage labor (TalkPoverty).
Older People Face More Threats to Health and Disabilities
The 78 million Baby Boomers born between 1946 and 1964 comprise such a large group that there are more workers in their fifties and sixties on the job than ever before. As a result of what has been called a Silver Tsunami, the number of workers ages 55 and older is projected to nearly double during the time period 2000–2020. Consequently, 1 out of 4 workers are projected to be over age 55 by the year 2020, a striking demographic shift in the labor force. Given that disability prevalence increases with age, and that the incidence of disability doubles between the ages 40-55, there are and will continue to be more people in the workforce living with a disability (ASA).
Limits Access to Food
One of the most common ways poverty affects older adults is by leaving them without regular access to food. While they may have access to food some of the time, they often don’t know where, when, or how they will get their next meal (HCA).
Affects Access to Health Care
Healthcare costs seem to constantly be on the rise, and people over the age of 55 often have more health issues than their younger counterparts. The older a person gets, the more at risk he or she is for diseases like cancer, diabetes, and heart conditions, all of which require treatment. Between doctor’s visits, treatments, and prescriptions, many older adults are filing for bankruptcy to keep up with these medical costs (HCA).
Older consumers with the lowest incomes struggle the most to pay their utility bills—35 percent of older households have incomes of less than $20,000 and experience the greatest energy burden, or percentage of income spent on energy costs (CAP).
Women and People of Color at Even Greater Risk (CAP)
Over 2.3 million women over the age of 65—11.5 percent—live at or below the poverty line, while slightly over 1 million—6.6 percent—of senior men live in poverty.
Nearly one in five—19 percent—of single, divorced, or widowed women over the age of 65 are poor, and the risk of poverty for older women only increases as they age.
Women ages 75 and up are over three times as likely to be living in poverty as men in the same age range. Only 416,000 men in this age range live at or below the poverty line, while over 1.3 million women ages 75 and up are poor.
Among married women, longer female life expectancy makes it likely that they will outlive their spouses, and be left without any additional sources of income they bring to the household.
People of Color
Blacks make up only about 9 percent of the elderly population in the United States, yet represent 21 percent of the elderly population living below the poverty line. Nearly one quarter of all elderly black Americans live below the poverty line.
If the monetary benefits from all public programs were excluded from their incomes, more than 6 in 10 African American and Hispanic American elderly would be poor. When Social Security is counted, the rate drops to about 3 in 10. When income from other public programs is also counted, 21 percent of African-American and 17 percent of Hispanic-American elderly remain poor.
Asian Americans are less dependent on Social Security than other aging people of color, but the poverty rate among elderly Asians is still 12 percent, which is higher than that of white Americans.
For decades, the retirement of the baby boom generation has been a looming economic threat. Now, it’s no longer looming — it’s here. Every month, more than a quarter-million Americans turn 65. That’s a trend with profound economic consequences. Simply put, retirees don’t contribute as much to the economy as workers do.
All else equal, fewer workers means less economic growth. One way to measure this is a figure known as the “dependency ratio,” or the number of people outside of working age (under 18 or over 64) per 100 adults between age 18 and 64. The higher the ratio, the worse the news: If more of the population is young or old that leaves fewer working-age people to support them and contribute to the economy. The U.S. dependency ratio has been improving in recent decades, falling from 65 in 1980 to 61 in 2000 to 59 in 2010. But now the trend is set to reverse. By 2020, the Census Bureau estimates, the U.S. dependency ratio will be back to 65; in 2030, it will be 75, the worst since the 1960s and 1970s, when the baby boomers were children (fivethirtyeight).
Protect Medicare and Social Security
Secure funding for programs specifically tailored to the needs of the elderly
Reauthorize the Older Americans Act
Educate younger generations on retirement plans and provide financial education
Businesses large and small
Social Security Income Program
Local, State and Federal Government
Families of the elderly
Public Health Officials
TECHNOLOGY AID TO HELP OLDER AMERICANS RETAIN OR APPLY FOR CUSTOMER FACING JOBS POST COVID-19:
In the US, the number of older individuals over age 55 is growing at a rate that outpaces the labor force’s overall growth. In 2020 this group already represents 25% of the labor force. Older workers are also over-concentrated in customer-facing jobs and are harder hit by the Covid-19 pan-demic with a 15.6% unemployment rate, the highest level since records began in 1948.
Post-Pandemic, the customer-facing jobs may evolve and become remote jobs, such as customer service over the phone or video conference, distance education, crisis line operators, and online retailers’ customer assistance.
Idea: For older individuals, having a proper command of their voice during an interview process and as part of their daily jobs is quickly becoming a critical element for becoming employed or for retaining a job. CWI Labs, in partnership with Giving Tech Labs and X4Impact Inc, are working on voice technology that preserves 100% the privacy of the user and can provide real-time feedback on how to improve the way in which we speak; to create a more pleasant and engaging interaction.
This technology will be available for licensing by large employers, job-seeking online boards, and at a discounted price, to workforce development nonprofit organizations, to include in their apps as a service to our older Americans.
FIVE STEP PLAN (Talk Poverty):
Strengthen the existing safety net. Senior poverty would be much worse without Social Security, the Supplemental Security Income program, and Medicare and Medicaid. These programs are almost single-handedly responsible for reducing the official measure of senior poverty from 35 percent in 1960 to 9 percent today. But seniors today are rapidly losing ground. Proposals to cut Social Security benefits, increase Medicare cost-sharing for beneficiaries, or limit Medicaid coverage should all be rejected. Instead lawmakers must advance proposals to ensure that these benefits meet the growing need.
Improve the Supplemental Security Income program. The poorest two million people over age 65 receive SSI payments, but the rate of seniors in extreme poverty is increasing in part because this program — originally intended to lift all seniors out of poverty — has not been significantly updated since it was first passed in 1972. As a result, SSI essentially still leaves millions of the country’s most needy seniors in poverty. The maximum federal benefit for an individual is $721 per month (though some states kick-in a small supplement), but to be eligible a senior must have less than $2,000 in savings. In addition to the limit on savings, the SSI income disregard limits the amount of income someone can have from another source, such as from a pension or Social Security benefit, and still receive SSI. But the current SSI income disregard allows for only $20 of additional general income or $65 of earned income before there is a reduction in benefits.
Increase the availability of programs that provide assistance with healthcare and long-term care costs. One of the drivers of seniors’ economic vulnerability is the rising cost of health care. Proposals that would shift more of those costs to seniors will only drive more seniors into poverty. Instead, the health care programs that are designed to help the poorest seniors afford their health care – Medicaid, Medicare Savings Programs, and the Medicare Part D Low-Income Subsidy – should be expanded, and out-of-pocket costs should be reduced or eliminated.
Push for federal support for the long-term care safety net. With 10,000 Americans turning 65 every day, the number of people needing long-term care coverage is projected to rise from 12 million today to 27 million in 2050. Few seniors are prepared to pay for the costs of long-term care. For poor and economically vulnerable seniors, proposals that rely on them to save more of their already inadequate incomes in order to cover these costs are simply unrealistic.
Reauthorize the Older Americans Act (OAA). The OAA provides funding for critical services that seniors rely on to remain independent and healthy. Services include meals, benefit counseling, caregiver support, transportation, health promotion, legal services, and more. While these services are not always limited to poor older adults, seniors in poverty rely on them heavily to make ends meet and to ensure that their basic needs are met. It is time for Congress to renew its commitment to providing seniors with essential social services by reauthorizing the Older Americans Act.
Partnerships for Inclusive, Equitable Workplaces:
The challenge of Economic Mobility for Black and Hispanic Communities has brought together CWI Labs and X4Impact to combine expertise in A.I. and workforce development. Scaling the scope of the partnership includes providing economic relief and workforce opportunities to older Americans in danger of unemployment and poverty.
Additionally, here are some solutions featured on X4I that are combatting poverty by rethinking housing, financial stability, and socialization in the elderly population:
Income Discovery is the AI-powered platform that makes complex retirement decumulation simple. Our Advanced Income Discovery Analytics (AIDA) platform is already driving revenue growth in the wealth management and retirement plan industry.
Nesterly helps make intergenerational homesharing safe and easy by providing screening, customizable homesharing agreements, and ongoing support.
Naborforce connects a network of community members, “Nabors,” to older adults for assistance with basic tasks and social engagement. These “backup” sons and daughters address the caregiver shortage while also helping combat loneliness.
ConnectCareHero is an activities management platform that enables the teams supporting senior citizens to streamline state-required documentation, keep families easily connected, and provide a place where they can plan curated activities.
America’s Aging Workforce: Opportunities and Challenges - Special Committee on Aging - United States Senate Dec 2017
What Baby Boomers’ Retirement Means For the U.S. Economy - FiveThirtyEight
Elderly Poverty: The Challenge Before Us - American Progress
A 5-Step Plan for Fighting Senior Poverty - Talk Poverty