Why Have Older Workers Lost Bargaining Power?

Aida FarmandTeresa Ghilarducci
Written By SCEPA

RELAB WORKING PAPER

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Social Security benefits are progressive and reduce the unequal distribution of retirement wealth generated by a broken employer-based retirement system. This study identifies what is driving the loss of bargaining power suppressing older workers' wages.

ReLab's study identifies seven reasons behind older workers' loss of bargaining power in the labor market. These include: 

  • eroding retirement income security
  • union loss
  • increasingly insecure employment relationships
  • persistent age discrimination
  • geographical immobility
  • ineligibility for the Earned Income Tax Credit (EITC) 
  • relative propensity to work for smaller firms

A loss of bargaining power among older workers could suppress wages and working conditions for all workers, since older workers are expected to fill a majority of the new jobs created. Out of 11.4 million net new jobs projected between 2016 and 2026, workers over age 55 will fill 6.4 million. 

SCEPA
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10+ Years of No Wage Growth: The Role of Alternative Jobs and Gig Work
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The Persistence of Extreme Retirement Inequality