Research

Why Have Older Workers Lost Bargaining Power?

May 1, 2019
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Working paper— 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. 

Authors: Aida Farmand and Teresa Ghilarducci

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. 

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