The economic meltdown is hurting everyone. But if you’re an early baby boomer over the age of 55, you may be in particularly big trouble. In an economic crisis, many employers lay off older workers first because their seniority makes them more expensive. And studies document that older workers who lose their jobs face more difficulties finding new ones.
That’s not the biggest problem you face. The house you’ve been living in for twenty-five or thirty years and were planning to cash in for retirement is worth far less now than the last time you looked. So is that 401-k plan you were counting on.
And you don’t have enough time before retirement to make up for these losses — certainly not enough time to reap the gains you expected between now and then. If the economic crisis is as bad as some predict, housing prices and share values might not bounce back for five years or more. Japan’s meltdown took ten years to correct.
We early boomers – and note I said “we,” because, sadly, I’m one of you – once had all the advantages. We entered the housing market in the 1970s and 80s, when houses were still cheap, and reaped the gains when late boomers came into the market and pushed prices up. We also got the plumb jobs because we were first into the post-industrial economy, before the boomers who followed us. And many of us got into the stock market early on, and rode that great wave.
So maybe now we’re paying the price for our good fortune then. But that doesn’t make this any less painful.
One saving grace. At least the Bushies didn’t have the votes to privatize Social Security. Had they got their way — and were we now completely reliant on the stock market for our retirements — we early boomers would be in, as the President’s father used to say, deep doo doo.
Robert B. Reich is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written eleven books (including his most recent, Supercapitalism). Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s “Marketplace” are heard by nearly five million people. This entry appeared on his blog.
Copyright 2008 Robert B. Reich