Older and out of a job

For many, the consequences of late-career layoffs are dire

By Erin Middlewood, Columbian special projects reporter

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Vancouver residents Mark McCloud and Fred Schwarz represent the two — what seem to be inevitable — outcomes of late-career job loss.

McCloud, 63, hasn’t been able to find another job, and is at the brink of a retirement he wouldn’t have chosen and might not be able to afford.

Schwarz, 50, has found a job but earns less than half of his former salary.

They are still reeling from a downturn nicknamed the “mancession” for good reason. In Clark County, nearly seven in 10 jobs lost between 2007 and 2010 were held by men.

While younger men suffered the greater number of job losses, older men such as McCloud and Schwarz have had more trouble landing a new job — and it jeopardizes their financial security for the rest of their lives.

“For men and women over 50 — whoa — it’s scary out there,” said Deena Pierrot, an employment recruiter who runs the Mosaic Job Cafe attended by McCloud and Schwarz. “They’ll take lower-level jobs just to get by. You want everyone to find a perfect job, but at some point, it’s a question of: How do I keep a roof over my head?”

The recession didn’t spare any age or gender group, but older workers have “generally bleaker prospects of finding a job,” said Scott Bailey, regional economist with the Washington Employment Security Department.

The reason is up for debate.

Age discrimination?

Many older workers say their age works against them in the job market.

The state Human Rights Commission saw a brief spike in age-discrimination-related complaints from Clark County in 2008, when it received 11, but most years, it receives about a half-dozen. The commission has determined that most complaints are “unfounded.”

Proving age discrimination, which is illegal, is difficult. But that doesn’t mean it doesn’t exist, McCloud said.

“Let’s face it: There is age discrimination. It’s a fact of life,” McCloud said.

He left his career in real estate when the market crashed. He took a temporary job with the U.S. Census. At his peak, he earned about $150,000 a year. Now he collects unemployment insurance. His applications for sales and marketing jobs touting his bachelor’s degree and 35 years of experience haven’t yielded any offers.

“People in my age bracket — we know how to work. We’re loyal,” McCloud said.

He suspects that employers shy away from older workers because they fear they will demand higher salaries, incur greater health costs and be “set in their ways.”

Yet those aren’t the reasons employers cite when they pass over applications from older workers.

“They won’t say it’s age discrimination,” said Schwarz, who built a career in packaging sales. “They’ll say, ‘You’re overqualified,’ or if you’re trying to change industries, ‘You don’t have enough experience.’”

Pierrot, president of Mosaic Blueprint, a Vancouver-based recruiting company, has heard recruiters speak more candidly. About a year ago, she was working with another recruiter and thought she had a man who would be a perfect fit for a job.

“I could tell from his résumé that he was in his late 50s or early 60s. The recruiter said, ‘I can’t use him. He’s too old. The company doesn’t want someone who would be retiring soon,’” she said.

The possibility of discrimination aside, other obstacles stand between older workers and new jobs.

When older workers lose job — and the tenure that goes along with it — they lose the institutional knowledge that makes them valuable to employers, said Steven Sass, director of the Center for Financial Literacy at Boston College. “Then, it becomes hard to find a good match, which is very important for older workers because they’re more complicated than younger workers.”

Retired or jobless?

Whatever the cause, the consequences of late-career layoffs are dire.

Losing a job at an older age usually leads to long stretches of unemployment. Those who find jobs often take pay cuts and jump from job to job, according to Sass’ research.

They also tend to draw from Social Security and retirement savings, risking poverty in their later years.

Since the recession began in 2007, the rate of 62-year-olds drawing Social Security benefits increased to 42 percent, bucking a downward trend, according to the Center for Retirement Research at Boston College.

“It’s very important if you are laid off to know — are you unemployed or are you retired? It’s hard to get a job in a recession. It’s hard to get a job when you’re old. But we’re talking about preserving your retirement assets,” Sass said.

A four-year delay in drawing Social Security and tapping into retirement savings means increasing monthly income down the line by a third, Sass said. This crucial calculation for individuals is multiplied many times over with 10,000 baby boomers across the country turning 65 each day.

“There are going to be a lot of people depending on nonwage sources of income: Social Security, pensions and investments,” Sass said. The question, he said, is whether they will be enough to sustain boomers until the end of their days.

Downward mobility

Retirement wasn’t up for discussion when Schwarz lost his $80,000 job in packaging sales. But that layoff will reverberate for the rest of his career and into his retirement.

He was unemployed for 14 months. His wife’s job sustained the family, in part because the couple made a point of buying a house with a mortgage they could pay on one income. They made cuts in their spending, trying as much as possible to spare their 8-year-old son from feeling the pinch.

Schwarz eventually landed another job, and now is on his third employer since the initial layoff — at lower pay.

“I’ve had to take steps down to get back up,” Schwarz said. “I’m at the lowest I’ve ever made, but I’m in packaging, and at least I’m working.”

McCloud, on the other hand, is still searching.

“I don’t really want to retire,” he said.

He likes to work, he said, and his investments have taken a hit. He and his wife, who owns a downtown Vancouver boutique, plan to sell their 3,700-square-foot house and downsize, but the property has lost perhaps 40 percent of its value. Like others who don’t have employment-based health insurance but have yet to reach Medicare eligibility, they pay sizable monthly premiums — $800 a month — for a high-deductible plan.

McCloud’s unemployment insurance runs out next month, and he doesn’t know what he’ll do next.

He takes comfort in the fact that he has plenty of company.

“In the whole scheme of things now,” he said, “it’s nothing to be embarrassed about. There are so many in the same situation.”

Erin Middlewood: 360-735-4541; erin.middlewood@columbian.com.