From the U.S. Government Accountability Office, www.gao.gov

Transcript for: The Challenges Facing Unemployed Older Workers

Description: Audio interview by GAO staff with Charles Jeszeck,
Director, Education, Workforce & Income Security

Related GAO Work: GAO-12-445: Unemployed Older Workers: Many Experience
Challenges Regaining Employment and Face Reduced Retirement Security

Released: May 2012


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[Narrator:] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's May,
2012. The number of workers age 55 and older experiencing long-term
unemployment has grown substantially since the recession began in 2007.
A group led by Charles Jeszeck, a director in GAO's Education,
Workforce, and Income Security team, recently reviewed the effects this
reality is having on older workers. GAO's Jeremy Cluchey sat down with
Charles to learn more.

[Jeremy Cluchey:] Can you talk about some of the particular employment
challenges that older workers are facing in the current economic
climate?

[Charles Jeszeck:] Well Jeremy we've found a number of problems facing
older workers in the report that we just completed. First, there is
discrimination against older workers on the part of some employers. Some
employers believe that older workers, they can't learn new skills, that
they just aren't as smart or as up to date with technology as younger
workers and so there are definitely some issues there. There are also
issues about older workers may require, may raise healthcare costs more
than younger workers. They're more expensive. Similarly, some older
workers had higher wages in their previous jobs and employers may be
concerned that as soon as the economy does recover that these older
workers would, you know would leave. Then there are issues about older
workers, just like younger workers a number of them, do need training.
The concern that some employers have about older workers is that because
they're older they may not have as long a career with the company and so
the company might not be able to recoup the investment they make in
their training.

[Jeremy Cluchey:] Your team spoke with a range of people in groups to
get a sense of the risks older adults face including focus groups of
unemployed workers. What did you learn from these conversations?

[Charles Jeszeck:] Well Jeremy we had, we held, conducted focus groups
with unemployed workers throughout the country and we found, like
workers of all ages, many older worker households are really suffering
from the great recession. Some of them were losing their homes. They
lost their health insurance. They had depleted their savings. So some
real problems that, real challenges that they've been facing. Some of
the older workers told us, in fact a number of them told us that
unemployment insurance was really a critical support for them during
this time and—unlike sort of the mythology out there that people simply
take unemployment insurance and don't try to look for new work—these
people that we talked to, they had been in the labor force for many
years, some of them had very prominent positions in their companies,
these people were very dedicated, they really wanted to work. This was
so important to them and they continued to search for work during this
period, and without the unemployment insurance they actually, they
might've lost some of these other, their homes or some of these other
things far sooner than ultimately what happened.

[Jeremy Cluchey:] You also looked at the potential impact of these risks
on retirement income, what did you find there?

[Charles Jeszeck:] Well, older workers because they're later in their
career, they have less time to recover from any shocks to their
retirement savings compared to younger workers, and so across the board
we saw problems. For those workers who were fortunate enough to have a
traditional pension plan and they lost their job they wouldn't be
getting any additional accruals or benefits from that plan, it's just
pretty much what they had, what they had earned up to that point. For
workers fortunate enough to have a 401k, unemployment meant a reduction
in their contributions to the plan, reduction in the employer
contributions if the employer was making such contributions, and then
more seriously in many instances when these workers had been unemployed
for a long period of time, the—they would drain their accounts to meet
ongoing expenses, and we found that this was a serious problem that if
someone, say who had been unemployed for 2 years had reduced their
account by, say 50 percent and then got reemployed, it would still take
them 5 or 6 years to get back to where they were under reasonable
rate-of-return assumptions.

[Jeremy Cluchey:] What can be done about this? What are some possible
policies that could address these risks?

[Charles Jeszeck:] Well I think the number one thing is to, is to get
the economy creating jobs again. Once you move away from that, you know,
we looked at, we talked to a lot of experts, did a lot of options, a lot
of different things that could be done to help older workers and
unemployed workers in general. They have advantages and disadvantages. A
number of these suggestions, these proposals cost money. This is a
period of considerable budget constraints so that's a challenge. We did
have some recommendations to the Department of Labor that as the economy
recovers that they could do certain things for some of their training
programs to make them a little bit more targeted towards older workers
and the particular problems that older workers have.

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[Narrator:] To learn more, visit gao.gov and be sure to tune in to the
next episode of GAO's Watchdog Report for more from the congressional
watchdog, the U.S. Government Accountability Office.