Then the novel coronavirus started spreading. Borenstein’s employer designated her an essential employee and assured her everything would be fine.
Then it wasn’t.
Her employer let her go. Now Borenstein, 58, is living off unemployment. With her teacher’s pension, she’ll be okay — but the loss of income disrupted her plans for a more secure retirement.
“I can live off my pension, but I won’t have a lot of extras,” she said. “The longer I’m out of work, the harder it will be to get back in the job market.”
The United States lost 20.5 million jobs in April, the highest monthly job loss on record. The unemployment rate for both young and older workers jumped to double digits. For women over 55, the unemployment rate increased to 15.5 percent in April, up from 3.3 percent a month earlier, according to the AARP Public Policy Institute. “The numbers were really devastating,” said Susan Weinstock, AARP’s vice president for financial resilience programming.
There’s a trifecta effect for older unemployed women, Weinstock said. They face age discrimination, are likely to be unemployed longer in downturns and — when they do finally land a job — they often have to take a significant pay cut.
When personal and job characteristics are held constant, jobless women are 18 percent less likely to find new work at age 50 to 61 than at age 25 to 34. At 62 or older, they are 50 percent less likely to be rehired, according to research by the Urban Institute.
With job opportunities and income reduced, the unemployed often tap their retirement funds if they have them — leaving less to live on when they decide to retire or are forced to stop working because of health issues. Under the Coronavirus Aid, Relief and Economic Security (Cares) Act, workers younger than 59½ can take coronavirus-related distributions up to $100,000 without incurring the typical 10 percent early-withdrawal penalty.
“If they’re having financial trouble, that’s a great safety net,” Weinstock said. “But if you’re an older worker, you have a lot less time to make that up than you do if you’re a younger worker.”
By the way, Weinstock pointed out, if you’re looking for work, AARP has a Job Board at jobs.aarp.org. Right now, the Small Business Administration is looking to hire loan specialists to process applications for the Paycheck Protection Program, created under the Cares Act to help businesses keep their workers employed during the pandemic.
Elizabeth White knows what it’s like to be 55 and unemployed. During the Great Recession, she lost lucrative consulting contracts that put her “solidly in the six figures.” She thought her experience working for the World Bank and advanced degrees from Johns Hopkins and Harvard universities would help her quickly find new employment.
She was wrong.
And to make matters worse, White had previously depleted her savings trying to run a retail business, which ultimately failed.
Now 66, White has gained tremendous perspective that can help other older workers trying to make ends meet during the pandemic. She wrote about her experience of having the “bottom fall out with no ladder to climb back up.” Her book, “55, Underemployed and Faking Normal,” is this month’s Color of Money book selection.
One of the first actions White recommends is forming a “resilience circle,” which is a small network of people with whom you can discuss honestly the challenges of living on a limited income because of a job loss. She talks about how important it is to downsize quickly. And she cautions that if you were a high earner with an impressive job title, “get off your throne,” meaning you may have to settle for work that you wouldn’t normally take.
“We’re going to have to let go of this notion that our values and worth are based solely on our titles, incomes, and jobs,” she writes. “We’re going to have to let go of our vanity and pride.”
White wrote the book before the pandemic hit, but the advice for older workers is timeless. She’s writing as a comrade in the struggle. It’s not a story of “doom and gloom” but of encouragement for older workers trying to make a living in a new normal.
I am hosting an online discussion about the “55, Underemployed and Faking Normal” at noon Eastern time on June 4 at washingtonpost.com/discussions. My guests will be White and AARP’s Weinstock. They will join me to take your questions about older workers dealing with unemployment during the covid-19 pandemic.
Have a question about retirement or personal finance? Join Michelle for an online Q&A every Thursday at noon Eastern time. Readers may write to Michelle Singletary at The Washington Post, 1301 K St. NW, Washington, D.C. 20071 or michelle.singletary@
washpost.com. To read previous Color of Money columns, go to http://wapo.st/michelle-singletary.
The Color of Money