December 7, 2011 | By: Ned Barnett
Jim Lind reflects on his career outlook at a lake near his home in Raleigh, N.C. Photo by Cathy Gordon.
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The depth and endurance of the economy's downturn is reshaping the lives of many Americans, closing off opportunities and bringing to the once comfortable a sense of desperation. Signal Hill, a leadership and communications consultancy that serves nonprofits, congregations and social enterprises, is telling this multipart story to explore the effects of hard times across generations and the response of individuals and institutions.
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Geoff Roper enjoyed prosperity before the Great Recession darkened the nation’s economic landscape in late 2007.
He worked in technical support for Nortel, a Canadian telecommunications giant with extensive operations near Raleigh, N.C. In the good years, Roper, 54, was making more than $90,000 a year. His 401K, loaded with Nortel stock, once peaked above $450,000.
Today, the salary — and the savings — are gone.
Nortel’s stock fell sharply when the dot-com bubble burst in 2001. The company struggled afterward and finally entered bankruptcy in 2009.
Roper survived several rounds of layoffs, but was let go in 2008 after 28 years. At first, he welcomed the break from work, but when he tried to return, he realized the extent of what had happened to him and to the economy.
“Thousands of people with the same qualifications were out looking and all the companies were downsizing,” he says.
Roper exhausted the maximum 99 weeks of unemployment, depleted his savings, watched his marriage of 33 years unravel and struggled with depression.
He decided to take any job he could find. He now has a part-time job at Target assisting customers. He makes $8.10 an hour.
Jim Lind, 59, of Raleigh, knows how Roper feels.
His great skill as a computer programmer once took him around the world, working for a company in England and for NATO in Brussels. He was laid off in 2008 and hasn’t had steady work since. He exhausted his unemployment benefits, lost a home in Florida to foreclosure and now relies on food stamps.
Roper and Lind represent a largely unrecognized consequence of the recession: baby boomers who lost their jobs and nest eggs — and are now losing the race against time to recover before their working years are over. A generation that came of age amid the nation’s post-war affluence, the 77 million baby boomers born between 1946 and 1964, now face austerity in their later years.
“I’m not expecting, unless I win the lottery or something, to have a form of retirement funds,” says Lind, who now works part time as a sound engineer. “At this point I’m looking at surviving. The first thing to do is survive.”
Roper says of the downward spiral: “I was always the breadwinner and suddenly I wasn’t winning any bread. Things got tight, got really tight. I started hitting the 401K just to pay the mortgage and the light bill and the cable bill.”
The discouraging reality, experts say, is the longer people in late middle age remain unemployed, the harder it is to find work. Their skills become outdated and long unemployment taints their appeal.
“There’s a whole group of us headed for long-term unemployment unless something changes radically,” Lind says. “It’s gotten to the point where they say, ‘If you don’t have a job right now, don’t talk to me.’"
Roper thought his decades of experience would be an asset. Then he learned that in the new reality it was actually a liability.
“I used to put down how many years of experience I had, but then they can figure out how old you are,” he says. “It says it right there in the resume books: If you have 20 years experience, just put 15-plus.”
Long-term Effects
For most baby boomers enduring long unemployment, the effects of this recession will shape the rest of their lives.
Leslie Linfield, executive director of the Institute for Financial Literacy in Maine, tracks patterns in bankruptcy filings. She expresses concern that the largest group of filers shifted upward last year from those age 35 to 44 to those 45 to 54.
But these older debtors, she says, are different. They resist bankruptcy and spend all their resources trying to pay their bills. When they finally surrender and file for relief, they have nothing to fall back on and scant years to rebuild.
“If you’re 54 or 55, do you have enough time to really have a fresh start? I don’t think so,” Linfield says.
She marvels at how so many in this age group could have worked so long only to end up desperate.
“I think we as a culture have to be asking what is it about us that — somebody in their 50s or 60s — why do they have to go bankrupt to begin with? What is going on with this generation where they are unraveling, cashing out retirement funds? All I’m seeing is it getting worse with this group.”
The unemployment rate for workers 55 and older is 6.7 percent, lower than the overall national rate of 9.1 percent. But when older workers lose their jobs, they typically face a longer — and more financially draining — period between jobs than the younger unemployed.
People between 55 and 64 who lose their jobs remain unemployed for a median of 43.8 weeks compared with 22.3 weeks for those between 35 and 44, according the U.S. Bureau of Labor Statistics.
In October 2010, the AARP surveyed 5,000 people 50 and older who had been in the workforce within the past three years. It found that nearly 30 percent had experienced involuntary unemployment in the past three years. One in four reported exhausting all their savings during the recession.
More than one in three said they were having difficulty making ends meet. Of those collecting Social Security, 67 percent said they were collecting earlier than they had planned, meaning they will see a lifetime reduction in their monthly payments.
When the AARP followed up in August with a survey of 1,300 people from the original group, it found the level of joblessness unchanged and the outlook of older workers growing gloomier. Among the findings:
A Pinched Retirement
While the economy eventually will improve, it appears that those entering retirement after several bruising economic years will be less secure than their parents, some experts say.
An Associated Press-LifeGoesStrong.com poll of baby boomers released in November found they are quickly losing confidence about their financial future. More than half (53 percent) said they do not feel confident they’ll be able to afford a comfortable retirement, up from 44 percent who said so in March. Nearly three out of four said they plan to work into what would normally be their retirement years.
The next generation of retirees will be largely without traditional retirement supports of a pension and home equity, says Tatjana Meschede, director of research for the Institute on Assets and Social Policy at Brandeis University.
Meschede is a co-author of “Living Longer on Less,” which found that “close to four of five senior households do not have sufficient economic security to sustain them through their lives.”
Meschede says of people 65 and older: “We see a downward trend in terms of their resources.” That trend will accelerate, she says, as the baby boomers hit 65 without pensions, with investments reduced by the recession and feeling the depletion of home equity or the loss of their homes to foreclosure.
“What is going to happen we don’t know, but we know that people are going to be struggling much more in the future,” she says.
Signs of the struggle are already clear to Chris Estes, executive director of the North Carolina Housing Coalition, which provides affordable housing for low-income residents. Estes says he is seeing more older people who were once middle class applying for subsidized housing.
“There are a variety of scenarios as to why older Americans are now competing for those affordable services who might not have been five years ago,” he says. “There are a lot more non-traditional poor people.”
One particularly hard-hit group were homeowners in African-American communities who were targeted by predatory lenders during the housing bubble.
“They lost their home and lost equity. We saw a lot of this in communities of color,” Estes says.
John Quinterno of South by North Strategies, a Chapel Hill, N.C., consulting firm that studies the labor force, says the economic downturn exposed new risks in how Americans plan to support themselves in retirement. The country, he says, has switched from relying on the solid “three-legged stool” of pensions, Social Security and personal savings to a stool supported by Social Security and two wobbly legs, 401K funds and home equity.
“We’ve run an experiment where we’ve radically changed the system we used to finance retirements from more of a social insurance model to one where individuals are responsible for their retirement,” he says. “We’ve transferred the risk from institutions to individuals, and many folks are coming up on the wrong side of the situation.”
Bitter But Still Hopeful
Roper thinks the nation’s leaders of both political parties should have done more to help Americans fighting for their economic lives after decades of work.
“I’m past skeptical and borderline cynical,” he says. “If they are currently in office, I think they should be removed.”
Roper sees promise in having a job at Target and hopes he might go full time. He plans to sell land he inherited from his mother to settle most of his debts.
“I have more hope right now than I’ve had in months,” he says.
Lind is looking forward, too.
“I continually operate with hope. I never operate with despair,” he says.
Lind, who dropped out of Arizona State University, is thinking of getting his degree if he can find a way to pay tuition. He has been working events as a sound engineer and does lighting work as well.
“You have to have faith in yourself,” he says, “My self image is not my job.”
That faith spurs him, at 59, to seek satisfying and rewarding work again.
“I’m extremely good at what I do, and I know I can do it some more.”
Read the entire Losing Ground series:
Losing Ground Part I: Graduates Face Tough Job Prospects
Losing Ground Part II: Hard Times Test the Faithful
