Our New Jobs Problem: Aging Americans

NEW YORK (MainStreet) — As if the U.S. workforce hasn’t had enough trouble regaining its footing in the aftermath of the Great Recession, two recent reports point to a less discussed issue that has hurt employees and businesses alike and could weigh down the labor market for many years to come: long-term care of older Americans.

Some 10 million Americans 50 and older (roughly a quarter of this age group) provide care to one or both of their parents, three times the percentage that did so 15 years ago, according to a report released in June by MetLife’s Mature Market Institute. This commitment often forces workers to put in fewer hours at their jobs or simply retire early, effectively sacrificing significant wages and benefits.

MetLife analyzed survey data from a University of Michigan retirement study and found the average caregiver in the 50-and-over age group ends up losing $303,880 in lifetime earnings by leaving the workforce early to care for a loved one full time, with nearly half of this coming from lost Social Security benefits and the rest coming from forfeited wages. Even those who retain their jobs but cut the number of hours they work end up losing about half that amount.

It’s not just workers who sacrifice revenue for long-term care obligations. American businesses end up losing $33.6 billion each year, according to a separate report from the AARP, due to the cost of replacing workers who leave to care for a relative full-time as well as the cost of employees who get less work done because they work fewer hours and are generally more distracted by their care obligations when they are on the job.

Indeed, the AARP study analyzed data for all age groups and found more than 61 million Americans provided some care to a friend, relative or other acquaintance at some point in 2009, the most recent data on record, with the average person putting in 20 hours a week to do so, equivalent to an extra (unpaid) part-time job. What’s more, 69% of these caregivers reported having to shift their work habits, either by coming in late and leaving early, moving to a less intensive job or quitting entirely.

While taking care of an elderly relative or a young child with long-term care needs has never been easy, several factors have converged in recent years to make the burden more widespread and time-consuming.

“In the past, you might have thought of caregiving as helping out with chores, driving your mother or father to the doctor’s office and giving them a pill now and again,” said Susan Reinhard, senior vice president of AARP’s Public Policy Institute. “Now you have to give them 15 different medications and all of them have side effects, so you have to monitor your loved one for those. You have to monitor their special diets, take their blood pressure and figure out how to use some pretty sophisticated health equipment.”

But more complicated medications alone doesn’t explain the growing long-term care costs in this country. In some sense, Americans are arguably suffering from the successes of the modern age. “People are living longer with chronic conditions, more people are working in the household and we have much more complex care going on now,” Reinhard said. Suddenly, we are in a situation where the number of people who require long-term care and the complexity of that care is increasing but everyone in the household works a full-time job.

The burden long-term care costs place on the U.S. workforce may only get worse in the coming years, as the overall population continues to age.

“The 85-and-over population is the fastest growing population by percentage in the U.S.,” said Dr. Sandra Timmerman, a gerontologist and director of MetLife’s Mature Market Institute. “Combine that with the fact that the older you are, the more likely you are to have a chronic condition like dementia or Alzheimer’s that requires long-term care and you can see that this is an issue that won’t go away anytime soon.”

There are some steps that companies can take – and in some cases have already taken – to reduce the impact long-term care has on worker productivity. For starters, Reinhard emphasizes that companies need to create a more flexible and understanding work environment to handle what she calls the “new normal” of long-term care needs.

“The more flexibility that companies can offer, the better. And with new technology, many can do just that by allowing their employees to work from home or to come in later and stay later,” Reinhard said. Otherwise she says workers will end up being on the phone constantly while in the office with doctors and relatives and losing productivity.

Beyond this, both experts note that workers need to be made more aware of the costs of abandoning a job prematurely and the full range of care options available out there, from adult day care services to employer-sponsored programs to help workers bear the burden.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.

Show Comments

Back to Top