[Joint House and Senate Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-225

                           BUILDING A BETTER
                        LABOR MARKET: EMPOWERING
                  OLDER WORKERS FOR A STRONGER ECONOMY

=======================================================================

                            VIRTUAL HEARING

                               BEFORE THE

                        JOINT ECONOMIC COMMITTEE

                                 OF THE

                     CONGRESS OF THE UNITED STATES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 9, 2022

                               __________

          Printed for the use of the Joint Economic Committee
          
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        Available via the World Wide Web: http://www.govinfo.gov
        
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

HOUSE OF REPRESENTATIVES             SENATE
Donald S. Beyer Jr., Virginia,       Martin Heinrich, New Mexico, Vice 
    Chairman                             Chairman
David Trone, Maryland                Amy Klobuchar, Minnesota
Joyce Beatty, Ohio                   Margaret Wood Hassan, New 
Mark Pocan, Wisconsin                    Hampshire
Scott Peters, California             Mark Kelly, Arizona
Sharice L. Davids, Kansas            Raphael G. Warnock, Georgia
David Schweikert, Arizona            Mike Lee, Utah, Ranking Member
Jaime Herrera Beutler, Washington    Tom Cotton, Arkansas
Jodey C. Arrington, Texas            Rob Portman, Ohio
Ron Estes, Kansas                    Bill Cassidy, M.D., Louisiana
                                     Ted Cruz, Texas

                  Tamara L. Fucile, Executive Director
                Kevin Corinth, Republican Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              

                     Opening Statements of Members

                                                                   Page
Hon. Donald Beyer Jr., Chairman, a U.S. Representative from the 
  Commonwealth of Virginia.......................................     1
Hon. Mike Lee, Ranking Member, a U.S. Senator from Utah..........     3

                               Witnesses

Dr. Teresa Ghilarducci, Irene and Bernard L. Schwartz Professor 
  of Economics and Policy Analysis and Director of the Schwartz 
  Center for Economic Policy Analysis, The New School for Social 
  Research, New York, NY.........................................     5
Dr. Monique Morrissey, Economist, Economic Policy Institute, 
  Washington, DC.................................................     7
Ms. Jocelyn Frye, President, National Partnership for Women & 
  Families, Washington, DC.......................................     9
Dr. Andrew Biggs, Senior Fellow, American Enterprise Institute, 
  Washington, DC.................................................    11

                       Submissions for the Record

Prepared statement of Hon. Donald Beyer Jr., Chairman, a U.S. 
  Representative from the Commonwealth of Virginia...............    36
Prepared statement of Hon. Mike Lee, Ranking Member, a U.S. 
  Senator from Utah..............................................    37
Prepared statement of Dr. Teresa Ghilarducci, Irene and Bernard 
  L. Schwartz Professor of Economics and Policy Analysis and 
  Director of the Schwartz Center for Economic Policy Analysis, 
  The New School for Social Research, New York, NY...............    38
Prepared statement of Dr. Monique Morrissey, Economist, Economic 
  Policy Institute, Washington, DC...............................    61
Prepared statement of Ms. Jocelyn Frye, President, National 
  Partnership for Women & Families, Washington, DC...............    69
Prepared statement of Dr. Andrew Biggs, Senior Fellow, American 
  Enterprise Institute, Washington, DC...........................    86
Response from Dr. Teresa Ghilarducci to Question for the Record 
  submitted by Senator Warnock...................................   100
Response from Ms. Jocelyn Frye to Question for the Record 
  submitted by Senator Warnock...................................   103

 
                    BUILDING A BETTER LABOR MARKET:
                        EMPOWERING OLDER WORKERS
                         FOR A STRONGER ECONOMY

                              ----------                              


                      WEDNESDAY, FEBRUARY 9, 2022

                    United States Congress,
                          Joint Economic Committee,
                                                    Washington, DC.
    The WebEx virtual hearing was convened, pursuant to notice, 
at 2:31 p.m., in Room G-01, Dirksen Senate Office Building, 
Hon. Donald S. Beyer Jr., Chairman, presiding.
    Representatives present: Beyer, Schweikert, Herrera 
Beutler, Estes, Arrington, and Trone.
    Senators present: Klobuchar, Kelly, Cruz, Lee, and Hassan.
    Staff: Vanessa Brown Calder, Ismael Cid-Martinez, Hugo 
Dante, Sebi Devlin-Foltz, Carly Eckstrom, Tamara Fucile, Sean 
Gogolin, Devin Gould, Owen Haaga, Erica Handloff, Colleen 
Healy, Jeremy Johnson, Adam Michel, Michael Pearson, Elisabeth 
Raczek, Alexander Schunk, Nita Somasundaram, Sydney Thomas, and 
Emily Volk.

 OPENING STATEMENT OF HON. DONALD BEYER JR., CHAIRMAN, A U.S. 
        REPRESENTATIVE FROM THE COMMONWEALTH OF VIRGINIA

    Chairman Beyer. This hearing will come to order. I would 
like to welcome everyone to the Joint Economic Committee's 
hearing titled ``Building a Better Labor Market: Empowering 
Older Workers for a Strong Economy.''
    I want to thank all of our truly distinguished witnesses 
for sharing their expertise today. And now let me turn to my 
brief opening statement.
    Without question, older workers are vital to our collective 
prosperity. And I am not just saying that because I am 71 years 
old. They support families and communities nationwide. They 
bring decades of earned experience and wisdom to businesses and 
market places large and small.
    Prior to the pandemic, older Americans made up 40 percent 
of the national economic output, despite making up only 35 
percent of the population. And over the last 20 years, the 
share of older workers has almost doubled, a trend that is set 
to continue even after the pandemic.
    As the United States continues its strong recovery, the 
primary task for us in Congress must be answering how we can 
build a stronger and more resilient economy where the benefits 
from economic growth are broadly shared. Key to such an economy 
is a better labor market that ensures all workers, including 
older workers, have access to quality jobs that meet their 
needs and are free from discrimination.
    Over the past year, the U.S. economy has experienced record 
job growth. Over 6.6 million new jobs were created in 2021, and 
almost a half a million more in January alone-6.9 percent of 
economic growth just in the fourth quarter.
    This robust labor market recovery, thought unimaginable in 
the spring of 2020 when unemployment was nearing 15 percent, is 
a testament to the American Rescue Plan, other emergency 
pandemic relief, and the widespread availability of vaccines 
and testing. But even as we recognize the record-breaking 
economic accomplishments of the last year, we must also address 
the ways our recovery has not yet reached everyone, including 
older workers.
    Older workers have long faced unique challenges in the 
workforce, and these challenges were exacerbated by the 
coronavirus pandemic. Decades of diminished bargaining power, 
stagnant wage growth, diminishing returns from additional years 
of working, and increasingly strenuous and dangerous jobs have 
contributed to widespread economic insecurity among older 
workers, and has constricted broad-based economic growth.
    The pandemic has also shined a new light on the inadequacy 
of our care infrastructure, to help older workers navigate work 
and care responsibilities. This has been particularly harmful 
to older Black and Hispanic women who typically shoulder their 
significant caregiving responsibilities. For example, one-third 
of home health aides are aged 55 and older. Yet care industry 
wages are low, and care work is very physically demanding.
    This creates an untenable situation for aging providers as 
they are simultaneously less physically able to continue their 
work, but also financially unable to save and retire securely. 
Further, more than one in five workers aged 45 to 64 reports 
being a caregivers to a parent. Yet the United States does not 
guarantee any workers the right to paid leave, and older 
workers are even less likely than their younger counterparts to 
have access to paid sick days.
    This forces many older workers to make the impossible 
choice between caring for themselves or a loved one and getting 
a paycheck. This harms workers, businesses, and the broader 
economy. Today we are seeing these decade-long trends impacting 
the older workers coming to a head. Just as companies have 
historically used downturns to prune workplaces of older 
workers, the same appears to be true of the coronavirus 
recession. At least, 1.7 million more older workers than 
expected retired due to the pandemic recession.
    And the effects are particularly harmful for older Black 
workers and those without a college degree.
    Despite media coverage of high-income older workers who 
choose retirement to spend more time on hobbies or with their 
families, evidence shows this is not reality for many older 
workers. The reality is that over the course of the pandemic 
many older workers have been forced out of jobs to live on 
insufficient retirement income.
    For the first time in 50 years, the unemployment rate for 
older workers was higher than that of mid-career workers. While 
rates have stabilized, older workers remained over-represented 
among those who are currently long-term unemployed.
    Because our retirement system has not kept up with the need 
of the aging workforce--the typical workers in the United 
States--the typical worker in the United States has zero 
retirement savings. That is right. No retirement savings at 
all. Among those that do, the amount is wholly insufficient to 
sustain a pre-retirement standard of living. And those who have 
been forced into early retirement may look to be rehired. 
Research shows they will experience significant barriers, 
particularly in recessionary periods. Older workers face 
discrimination and stigma from periods of long-term 
unemployment, both of which limit their re-employment 
opportunities.
    No worker should be forced into early retirement. And at 
the same time, no one should be forced to work long into their 
golden years because of insufficient retirement savings.
    As members of Congress addressing these challenges in order 
to help build a better labor market for older workers and 
create a stronger economy, is central to our work. I look 
forward to this discussion and our expert witnesses and 
learning from them today.
    Let me now introduce the Ranking Member of the Joint 
Economic Committee, Senator Lee from Utah. Senator, the floor 
is yours.
    [The prepared statement of Chairman Beyer appears in the 
Submissions for the Record on page 36.]

  OPENING STATEMENT OF HON. MIKE LEE, RANKING MEMBER, A U.S. 
                       SENATOR FROM UTAH

    Senator Lee. Thanks so much, Mr. Chairman.
    Older Americans are the bedrock of our communities, and it 
is hard to overstate their role. We rely as a society on 
grandparents for everything, from helping to care for our 
children, to building our churches, and volunteering in our 
local charities.
    Increasingly, many older Americans also make really vital 
contributions in the workforce. Many of America's seniors, and 
more and more of them in fact, are choosing to work because 
they find work to be a source of engagement and meaning in the 
transition into their golden years.
    Tad Greener is a fellow Utahan who was missing the social 
connections and the professional satisfaction associated with 
being at work, after being out of a job for the past two years, 
due to his health. Like so many other older Americans, when he 
started looking for a job again he thought he would never be 
able to get a leg up navigating the endless changes that had 
been brought about by the pandemic.
    But that is when Tad saw a story about Return Utah, a great 
new program created by Utah's Lieutenant Governor, Deidre 
Henderson, to help Utahans who are looking for work after an 
extended absence. Tad applied, and he was surprised to find 
that the Utah Office of Energy Development needed someone with 
his technical skills.
    Now although the position was temporary, after just two 
months into the job he was made a permanent team member.
    And he is now able to put his many years of experience to 
good use in his new position. Tad's story is inspiring. It is 
inspiring for the millions of American workers who are still on 
the sidelines. And it is instructive for us today as we seek to 
understand the barriers that older Americans face. As many 
choose to work longer, a strong labor market with rising wages 
for all is the most effective way to create new opportunities 
that support older Americans.
    Now the good news for us today is that older Americans are 
doing better than they ever have before, thanks to improved 
health and less physically demanding jobs. Many older Americans 
are remaining in the workforce longer, and more employers are 
benefiting from their reliability and their experience.
    Older Americans who choose to retire are also better set up 
for economic security than ever before. Americans have never 
saved more for retirement, or had higher incomes in their 
golden years. Poverty among seniors is lower than among any 
other age group. And the preliminary data indicate that those 
who left the workforce during the pandemic did so because they 
can better afford to retire after doing that.
    Older workers are doing remarkably well. What older workers 
do not need are new special interest programs and policies 
cooked up in Washington and delivered half-baked by bureaucrats 
from thousands of miles away.
    So first, let's fix what is broken. Government spending has 
stoked the highest inflation rate this country has seen in four 
decades. And it is hurting all Americans, including our 
seniors, many of whom live on fixed incomes. Government 
programs intended to care for seniors often punish those who 
just want to stay connected to the workforce longer. And the 
threat of vaccine mandates continues to hang over the country, 
cruelly forcing Americans to choose between the freedom to make 
their own health decisions and their jobs.
    Ultimately, a thriving, unencumbered economy is in fact the 
best way to allow older Americans to make their choices and 
make those choices that are best suited for themselves and for 
their families. Whether that is spending more time with the 
kids and the grandkids, volunteering in a local congregation, 
maintaining a long, healthy work life, or all of the above.
    I look forward to hearing from our witnesses on how we can 
foster this type of prosperity. Thank you.
    Chairman Beyer. Thank you, Senator Lee, very much. Now I 
would like to introduce our four distinguished witnesses.
    Dr. Teresa Ghilarducci serves as Professor of Economics and 
Policy Analysis at the New School for Social Research. She also 
directs the Schwartz Center for Economic Policy Analysis where 
she leads the Retirement Equity Lab. She is a labor economist 
and a nationally recognized author, and an expert in retirement 
and economic security. She has written extensively on older 
workers and offers various solutions to a growing retirement 
crisis.
    Dr. Ghilarducci received a Ph.D. in Economics from the 
University of California, Berkeley.
    Dr. Monique Morrissey is an Economist for the Economic 
Policy Institute. Before joining the Institute, Dr. Morrissey 
worked at the AFL-CIO Office of Investment and at the Financial 
Market Center. Dr. Morrissey has written extensively about the 
older workers, retirement security, compensation, and financial 
markets. In recent work, Dr. Morrissey examined the effects of 
the COVID-19 pandemic on older workers and ways to ensure they 
can fully participate in the recovery. Dr. Morrissey received 
her Ph.D. in Economics from American University.
    Ms. Jocelyn Frye is President of the National Partnership 
for Women & Families. Prior to this role, she was a Senior 
Fellow at the Center for American Progress. Before her time 
with the Center, Ms. Frye worked in the White House under 
President Obama, serving as Deputy Assistant to the President 
and Director of Policy and Special Projects for Michelle Obama. 
She is an expert on policies that would improve the quality of 
work and well-being for women, older workers, and their 
families. Ms. Frye is a graduate of Harvard Law School.
    Dr. Andrew Biggs is a Senior Fellow at the American 
Enterprise Institute. His work focuses on Social Security 
reform, State and local government pensions, and public sector 
pay and benefits. Before joining AEI, Dr. Biggs served as the 
principal Deputy Commissioner of the Social Security 
Administration in 2007. And in 2005 he was an Associate 
Director of the White House National Economic Council where he 
worked on Social Security reform. Dr. Biggs received a Ph.D. in 
Government from the London School of Economics.
    So let's begin with Dr. Ghilarducci with your testimony, 
and then we will continue in the order of introductions.
    Dr. Ghilarducci, the floor is yours.
    [The prepared statement of Senator Lee appears in the 
Submissions for the Record on page 37.]

   STATEMENT OF DR. TERESA GHILARDUCCI, IRENE AND BERNARD L. 
    SCHWARTZ PROFESSOR OF ECONOMICS AND POLICY ANALYSIS AND 
 DIRECTOR OF THE SCHWARTZ CENTER FOR ECONOMIC POLICY ANALYSIS, 
        THE NEW SCHOOL FOR SOCIAL RESEARCH, NEW YORK, NY

    Dr. Ghilarducci. Thank you very much. Thank you, Chairman 
Beyer and Ranking Member Lee, and all the other committee 
members that showed up.
    You are about to tackle the special issues the Nation 
faces, as nearly half of the 11 million, about 12 million new 
jobs that are projected to be created by 2020--I'm sorry, by 
2030, half of those jobs will be filled with workers 55 and 
over.
    The sheer scale and the fast growth of older workers means 
that they dominate the conditions of the labor market. And 
their falling status will hurt the whole economy.
    Now for a small minority of older workers, we estimate 
about 11 percent, we have great, great news. They still work, 
though they have more than enough to retire on. Presumably 
their jobs are compelling, they are interesting, and they are 
decently paid. But most older workers do not face those 
conditions. Older workers are more likely to be working poor 
than younger workers. Twenty-six percent of older women, and 
about one-third of older non-white workers, earn under $15 per 
hour, making them officially working poor.
    And the older workers practically stopped being paid for 
their experience and their loyalty. The rate of return for 
working one extra year has fallen cumulatively by 45 percent in 
the last 30 years. And for some older workers, technology might 
make their work easier, but technology can also intensify work.
    What we are seeing in the data is, as computers are 
spreading, some of our most robust sectors thrive on low-wage 
older workers, think about home personal health care, 
janitorial service, and warehousing. More older workers are 
stooping and bending. More older workers are required to 
intensely concentrate and to use keen eyesight. And more older 
workers are required to do physical labor.
    Over 42 percent of older Black men are in physically 
demanding jobs. And, yes, more older workers are working but 
despite all that work, the U.S. has among the highest elderly 
poverty rates in the OECD. And all that work, coupled with 
unequal longevity gains, means that American workers have the 
fewest years in retirement--17 years on average. Black men can 
expect about 13 years on average, while most workers in the G-7 
have well over 22 years in retirement, and they face low 
poverty rates.
    Yes, more older workers want to work, but about half of 
older workers now in middle-class households will be downwardly 
mobile into poverty, or near poverty, in the next ten years. 
And that is because median account balance for all workers is 
zero, and the median account balances for older workers is 
$15,000. And even if they want to work, most retirees are 
forced out of the labor force. The majority say they were 
forced to retire much earlier than they expected.
    Now a dynamic market is defined by bargaining relationships 
and power. Nobel Economist Amartya Sen observes that when a 
growing amount of people--in this case, older workers--do not 
have basic capacities--in this case, the basic capacity to 
retire--they do not have the power to bargain for better jobs. 
But if older workers had more bargaining power, one-third of 
younger family members providing time and money to their elders 
would get relief. If older workers had more bargaining power, 
communities would spend less on fragile elders, and they would 
have more aggregate demand in their community. And that 
especially helps in a recession.
    If older workers had more bargaining power, we would reward 
the employers who are doing the right thing, those employers 
that hire, train, and pay older workers well. And finally, if 
older workers had more bargaining power, we would improve their 
retirement income security.
    You may hear about rosy models that conclude that working 
longer solves about everything, especially helping retirement 
income. But those models wrongly assume something I thought was 
always true, but it is wrong. Older workers are now, instead of 
saving for retirement and delaying claiming Social Security, 
older workers now, because of low pay, are claiming Social 
Security while they are working. And they are also drawing down 
their savings.
    So the stark truth about the conditions older workers work 
in means that the idea of working longer is not as costless as 
we thought. It is quite costly.
    Now Congress could help older workers right now. You could 
form an Older Workers Bureau like you formed the Women's Bureau 
back in 1990. The Older Workers Bureau could coordinate 
research, and it could recommend fixes for the issues we are 
going to hear about today, including the highest level of 
perceived age discrimination in the last 30 years, probably 
because of the pandemic accelerated this.
    Congress can directly expand pension coverage. I created a 
plan with former President Trump's Chief Economist Kevin 
Hassett and the Economic Innovation Group.
    And that plan provides a government savings match to 
workers in the bottom half of the earnings distribution.
    This reliable savings vehicle works alongside, and is 
modeled after the Federal Thrift Savings Plan. Congress can 
help improve pay conditions by boosting the minimum wage, 
protecting union rights, and expanding sick leave. Higher pay 
creates a virtuous circle of creating more retirement security.
    Congress could also make Medicare the first payer, and that 
would lower the cost of health insurance for employers who hire 
older workers. Strengthening older worker bargaining power 
helps more than just older workers. Better jobs for older 
people improves productivity of the whole economy. It helps 
younger family members. It helps aging communities, those 
regions of the country with lots of older people. It stabilizes 
spending power, and it helps all workers get the leverage they 
need to improve their jobs.
    Thank you.
    [The prepared statement of Dr. Ghilarducci appears in the 
Submissions for the Record on page 38.]
    Chairman Beyer. Dr. Ghilarducci, thank you very much.
    And thank you for the very concrete policies.
    Let's now turn to Dr. Monique Morrissey for your testimony.

STATEMENT OF DR. MONIQUE MORRISSEY, ECONOMIST, ECONOMIC POLICY 
                   INSTITUTE, WASHINGTON, DC

    Dr. Morrissey. Thank you, Chairman Beyer, Ranking Member 
Lee, and members of the committee for inviting me to 
participate in this hearing.
    My name is Monique Morrissey. I am an economist at the 
Economic Policy Institute, a nonprofit, nonpartisan think tank 
created in 1986 to include the needs of low- and middle-wage 
workers in policy discussions.
    The pandemic recession was unusual. It was not triggered by 
a financial crisis, but rather social distancing in response to 
the COVID-19 pandemic, which affected both labor supply and 
demand. Layoffs are concentrated in services like major 
hospitality, while health and safety concerns and caregiving 
responsibilities loomed large in workers' decisions to leave 
the workforce.
    In previous recessions, older workers' labor force 
participation increased as they delayed retirement in response 
to falling asset values. In contrast, homeowners and 401(k) 
participants benefited from rising asset values during the 
pandemic, contributing to an increase in retirement among some 
privileged workers.
    In the short but steep recession, workers aged 55 and older 
saw plummet declines similar to those for prime-age workers. In 
a more typical recession, older workers are less likely to lose 
their jobs due to seniority. Older workers were less likely to 
work in occupations and industries most affected by the 
pandemic, but they were more likely to leave jobs due to health 
risks.
    Job losses were greater among vulnerable groups of older 
workers, including women, workers of color, noncollege workers, 
and part-time workers. A robust Federal response, including 
relief checks and expanded unemployment benefits, brought about 
a rapid recovery despite the pandemic's persistence. This is in 
sharp contrast to the slow recovery after the Great Recession 
that caused lasting damage to vulnerable workers and the 
economy.
    As the economy recovered, older workers were slower to 
return to work than their younger counterparts, accounting for 
over a third of missing jobs at the end of last year, even 
though they were a quarter of the prepandemic workforce. 
However, January data shows that the employment rate for older 
workers is now 1.4 percentage points below prepandemic rates, 
roughly the same as for younger workers.
    Even if older workers no longer account for a 
disproportionate share of job losses, the impact can be and was 
devastating. Older workers face greater earnings losses than 
their younger counterparts because they are likely to be 
unemployed longer and their new jobs often paid significantly 
less than their old ones due to the loss of employer-specific 
skills and age discrimination.
    Older workers benefited from measures taken during the 
pandemic to extend the duration of unemployment benefits, 
increase benefit amounts, and expand eligibility. These 
measures help the economy recover by shoring up consumption 
while allowing workers to find jobs suited to their skills. 
Some older workers also benefited from funding for work-sharing 
programs that encourage employers to reduce hours rather than 
lay off workers.
    We should be most concerned about two groups of older 
workers who experienced disproportionate job losses during the 
pandemic. Lower waged noncollege workers under age 65 who are 
not prepared for retirement, for the most part. And front-line 
workers in industries and occupations essential to our economic 
recovery and future prosperity, including workers in education, 
transportation, postal service, health care, and caregiving 
jobs.
    Front-line workers paid a steep price for our failure to 
protect workers during the pandemic. Though infection rates are 
declining, strong occupational safety and health standards 
remain a priority for workers and the economy.
    Many older workers left the paying workforce due to poor 
health. Other were sidelined caring for family members. 
Shrinking employment in the care sector affected family 
caregivers as well as older workers employed in these low-paid 
and often dangerous occupations.
    The Build Back Better Act would greatly improve the lives 
of older workers and enable some to return to work. It includes 
funding for home and community-based services, creates a paid 
family and medical leave program, and improves the pay and 
working conditions of caregivers.
    The United States is one of a few countries that do not 
guarantee access to paid sick leave. This is bad enough under 
normal circumstances, but especially in a pandemic when many 
sick workers face a harsh choice between lost earnings and 
endangering others. Two-thirds of low-wage workers lack access 
to paid sick leave, including many home health aides and other 
front-line workers.
    My testimony focused on pandemic-related effects of the 
policies. The challenges facing older workers predates the 
pandemic. Most policies that would help older workers also help 
other vulnerable workers, including raising the minimum wage, 
strengthening collective bargaining rights, guaranteeing paid 
sick leave or paid leave in general, addressing unpredictable 
and involuntary part-time schedules, combatting 
misclassification of workers as contractors, and other policies 
that support good jobs with decent pay and benefits. Thank you.
    [The prepared statement of Dr. Morrissey appears in the 
Submissions for the Record on page 61.]
    Chairman Beyer. Dr. Morrissey, thank you very much. We will 
next hear from Ms. Jocelyn Frye. Ms. Frye, the floor is yours.

STATEMENT OF MS. JOCELYN FRYE, PRESIDENT, NATIONAL PARTNERSHIP 
              FOR WOMEN & FAMILIES, WASHINGTON, DC

    Ms. Frye. Thank you so much Chairman Beyer, Ranking Member 
Lee, and members of the committee. Thank you for the 
opportunity to be here and discuss the challenges facing older 
workers.
    Over the last five decades, the National Partnership for 
Women & Families has worked to improve women's lives and tackle 
gender-based barriers that erode economic opportunities and the 
health and well-being not only of women but all people. We 
believe that prioritizing equity and a comprehensive care 
infrastructure are essential to creating effective workplaces, 
and promoting economic stability especially for older workers 
who are vital to their families and our economy, but are 
increasingly on shaky ground.
    Too often the narratives about older workers are 
oversimplified stories about comfortable retirements and 
financial stability, but these stories ignore the precarious 
economic realities of many older workers, especially older 
women, particularly older women of color. And I want to focus 
my remarks on three specific challenges that many of these 
workers face: ongoing age discrimination, the lack of robust 
care infrastructure, and the need to improve job quality in 
many of the jobs that older women workers hold.
    First, older workers continue to face discrimination in the 
workplace. According to the Equal Employment Opportunity 
Commission, 6 in 10 workers over the page of 65--45, report 
that they have seen or experienced age discrimination at work, 
with workers of color and women reporting these discrimination 
problems at even higher rates. Data from 2017 showed that an 
increasing majority of age discrimination charges are filed by 
women. We also know that because of long-standing patterns of 
occupational segregation, many older women and workers of color 
are often segregated in lower paying jobs with few benefits.
    Second, women workers are expected to shoulder the bulk of 
caregiving responsibilities for their families as paid and 
unpaid caregivers, with too little support. And this is true 
for women of all ages, despite the fact that every family is 
likely to face a caregiving challenge, we lack much needed care 
supports at the national level, and we treat caregiving as a 
private responsibility for families to navigate alone. These 
care obligations affect women throughout their careers, with 
many cycling out of the workforce. An economic cost is 
estimated at $650 billion less year in GDP due to women's 
declining labor force participation. Older women workers 
continue to provide essential care for their loved ones, even 
as they address their own care needs. The historical roots of 
caregiving as mainly being performed by Black women and other 
women of color has meant that care work and care workers have 
often been devalued with little regard to their own care needs.
    Third, many older workers work in jobs with low wages and 
without the supports needed for a secure retirement. Women make 
up nearly two-thirds of workers in the 40 lowest paid jobs, 
with women of color especially over-represented. Many of these 
jobs also have few benefits, which makes saving for retirement 
even harder. One in three older women workers, 
disproportionately women of color, work in jobs that are 
physically demanding that may be difficult to continue as they 
get older. On average, a woman 50 or older who leaves the 
workforce early for caregiving will lose an estimated $400,000 
in lost income and retirement benefits.
    These three problems have been on full display throughout 
the pandemic. Women's labor force participation is lower than 
it was 30 years ago. Care-giving challenges continue to wreck 
havoc on women's employment. And the older workers have seen 
notable declines in employment and labor force participation 
since 2019.
    The current moment calls for a reset squarely focused on 
improving employment opportunities and outcomes for older 
women, older workers, and growing our economy. There are 
several positive solutions which should be top priorities.
    First, it is long past time for the United States to invest 
in a robust care infrastructure that ensures a continuum of 
support for care across the lifespan and reduces long-standing 
gender and racial inequities. This means investing in a 
national family and medical leave program, along with other 
care adjustments such as strengthening home and community based 
services to address workers' caregiving needs, and to boost 
women's labor force participation.
    Second, Congress should take actions to improve job quality 
to help boost wages and economic support for workers by raising 
the minimum wage and strengthening pay protections, especially 
in caregiving occupations disproportionately held by older 
women of color.
    Finally, action is needed to strengthen enforcement of 
protections against age and other forms of employment 
discrimination. This includes increased funding to key 
enforcement agencies, and initiating a specific initiative to 
focus on women's employment and the different factors impeding 
women's participation in our economy, especially for older 
women.
    Thank you again for the opportunity to testify, and I look 
forward to answering your questions.
    [The prepared statement of Ms. Frye appears in the 
Submissions for the Record on page 69.]
    Chairman Beyer. Thank you, Ms. Frye, very much. And 
finally, we will hear from Dr. Andrew Biggs from AEI.
    Dr. Biggs?

    STATEMENT OF DR. ANDREW BIGGS, SENIOR FELLOW, AMERICAN 
              ENTERPRISE INSTITUTE, WASHINGTON, DC

    Dr. Biggs. Thank you very much, Chairman Beyer, Ranking 
Member Lee, and members of the committee. Thank you for 
inviting me to speak today about employment at older ages, the 
opportunity extended work lives present, with the challenges 
along the way and how far we have already come.
    The latter stages of our careers are the gateway to 
retirement, and research finds extending our work lives is an 
incredibly powerful tool to enhance retirement income security. 
Delayed retirement gives savings more time to grow, increases 
Social Security benefits, and reduces the number of years that 
savings must cover.
    The question is: Can Americans do it? I have been working 
on retirement policy since the late 1990s, and in all of that 
time we have heard why Americans cannot work longer. Our health 
is too poor. Our job is too physically demanding. And age 
discrimination is too widespread for longer work lives to 
meaningfully contribute to retirement income security.
    I do not think we will ever stop hearing those things. But 
Americans did not listen to the ``experts.'' They work anyway. 
Employment rates from near-retirees are today at historical 
highs, despite the COVID pandemic, despite perceptions that 
older workers can find only low-paid jobs, median earnings for 
near-retirees who work exceed those of younger adults. On top 
of this, the average American claims Social Security benefits 
over 1.3 years later today than they did in 1990, boosting 
their benefits throughout retirement.
    And employment rates have increased the most for Americans 
with the least education. So there is not merely people like us 
who are extending their work lives. These are things that have 
already happened. Americans did what the experts said they 
cannot, and they have been rewarded for it. While you may hear 
that most Americans cannot afford a decent retirement, the data 
show that Americans' retirement savings are at record levels. 
And savings have increased in every age, income, educational 
and racial or ethnic groups.
    American's retirement incomes are also at record levels, 
not just among the richest retirees, but across the income 
distribution. Retirees incomes have risen dramatically faster 
than incomes for working age households, and poverty in old age 
is at record lows.
    Moreover, the Social Security Administration's multi-
million dollar retirement income model projects that retirement 
incomes will continue to rise and poverty will continue to 
fall. OECD data shows that Americans work longer and save more 
for retirement than most other developed countries. The reward 
is that, according to the OECD, the typical U.S. retiree has 
the highest disposable income in the developed world. U.S. 
retirees also report the highest level of financial security 
compared to other countries, with the greatest number of 
retirees saying they can maintain their pre-retirement standard 
of living, and the smallest number saying their incomes fall 
short.
    But it is not all rainbows and kittens. We can do better, 
and one place to look is Federal entitlement programs which can 
present negative incentives for older workers to delay 
retirement.
    For instance, we call Social Security an earned benefit 
because of the Social Security taxes we pay results in higher 
benefits in retirement. But that is not true for most Americans 
who choose to delay retirement. My own research has shown that 
the median or the typical worker who delays retirement by one 
year will receive only two-and-a-half cents in extra retirement 
benefits for each dollar of additional taxes they pay. That is 
a terrible deal when it comes to certain quirks in the Social 
Security benefit formula. Economic research shows that near-
retirees are particularly sensitive to these incentives since, 
unlike middle-age workers they have the option to retire. 
Fixing them could encourage more Americans to work longer.
    Medicare also presents challenges to work in old age. 
Medicare typically covers health costs beginning at age 65, but 
not for workers who continue to work in jobs that offer health 
insurance. Instead, Medicare acts as a secondary payer and 
covers only what the employer plan will not. This denies 
seniors the benefits they paid for and raises costs for 
employers. This either reduces his incentives to hire older 
Americans, or if these costs are passed on to employees reduces 
their salary. Neither the Social Security nor the Medicare 
fixes would be cheap, but enhancing work at an older age brings 
incredible benefits to Americans, provides badly needed 
employees to American firms, and would generate new tax revenue 
for the Federal Government.
    One more general point that applies to a broad range of 
policies. A strong labor market in which older Americans can 
easily find jobs is the best social program. The best weapon 
against employers who might discriminate by age. And the best 
way to help Americans cross the finish line into a successful 
retirement.
    The strong labor market just prior to COVID was not merely 
for near-retirees. It was good for Americans with disabilities, 
those with less education or skills, for those coming back from 
a drug problem or a criminal record. Making jobs plentiful 
makes nearly every other problem Americans face easier to 
solve.
    As a committee with a broad purview, the JEC should think 
about the myriad way in which we can build a vibrant labor 
market for older workers. Thank you for your attention today.
    [The prepared statement of Dr. Biggs appears in the 
Submissions for the Record on page 86.]
    Chairman Beyer. Dr. Biggs, thank you very much. I 
appreciate all of those inputs. We now begin our round of 
questions. I will start.
    Dr. Ghilarducci, you have been a strong advocate of the 
idea of an older workers bureau in the Department of Labor. How 
would this be part of the solution?
    Dr. Ghilarducci. I do not want to create big government 
bureaucracies, but having one place in the government that 
focused all the research about the changing issues facing older 
workers, having one place in the government that can actually 
combine all the data that Social Security has--even the PBGC--
the Labor Department has, and the Treasury has, on where older 
workers are saving, would actually give a really good picture 
of what is happening to them. But also, an older workers bureau 
filled with lots of economists would also tell us how this big 
wave of older workers are affecting the whole economy, and how 
employers could do the right thing in adding to the 
productivity as workers get old and others do not. It would 
look at industries that are hiring a lot of older workers, and 
really have concrete ideas besides, oh, just don't think badly 
of older workers. It would really attack the problems you are 
going to be facing in the next 10 years: more age 
discrimination, more insecurity, less retirement security.
    So some good heads have to think about it all the time.
    Chairman Beyer. Thank you very much.
    Dr. Morrissey, lots of the stories currently in the 
mainstream media is about the financially secure older workers 
happily choosing to play golf and take care of grandkids. Is 
this really what is happening? And how is the media getting 
this wrong? What is the real story?
    Dr. Morrissey. Thank you. Well, there are few older workers 
who fall into that category. And we have seen an uptick among, 
you know, college-educated white men aged 70 and older who 
probably were semi-retired, probably already taking Social 
Security, and then who have decided to leave probably for some 
mix of financial reasons and because their work might have 
dried up and maybe COVID fears, things like that.
    But this is a very small share. And these are not the 
people that we are worried about. They are leaving semi-
retirement to--it is going to have very little impact on their 
families and very little impact on the economy. The people we 
should really be worried about are this large group of workers 
under 65 who are not college-educated, who are predominantly 
workers of color, and who we are seeing very large--not 
necessarily retirement, but employment declines. So those are 
the people that I am most concerned about in terms of the 
impact on their families and on themselves because they are not 
ready for retirement, and they have been forced out of the 
workforce, and it is clearly not a choice of theirs.
    And by the way, this is also a problem that predated the 
pandemic, but the pandemic just made it much, much worse.
    Another groups of workers that I am particularly worried 
about, rather than this very small group of relatively 
privileged workers, is workers who were--you know, for whom 
they might be able to comfortably retire, a lot of these 
workers are not 65, either, but school teachers, nurses. They 
are more likely to have pensions. They are more likely to have 
a comfortable retirement. But they are critical to the 
economy's recovery. And we are seeing large numbers of these 
workers also leaving.
    So for the economy, that group is especially critical to 
stem that outflow. And for the sake of the workers themselves 
and their families we really need to make sure that the 
noncollege workers under age 65 are able to stay in the 
workforce or return to the workforce.
    The other thing is, one of the reasons this got a lot of 
attention is because there is a disconnect between people--
there was some suggestion by one Federal Reserve article about 
the fact that there were fewer people coming back in from 
retirement, and that there has been a decline in workers going 
from unemployment to retirement. But that was actually sort of 
a mismeasurement.
    The retirement rate of people who were unemployed going 
into permanent retirement declined slightly, but the sheer 
numbers grew dramatically because there were so many more 
unemployed workers. So I actually want to do a shout out to 
some grad students, some of Teresa's team at SCEPA were the 
ones who basically figured out why there was this 
miscommunication, or misunderstanding about what was happening 
in terms of inflows and outflows out of retirement. So they 
were able to--they untangled the two effects.
    So you might have a slight decline in the people who are 
unemployed leaving retirement, but there are so many more 
unemployed older workers that actually that was really what was 
causing a decline in older workers.
    So it is a confusing thing, but thanks to Teresa's team at 
New School there who figured out what was going on there.
    Thank you.
    Chairman Beyer. Thank you, Dr. Morrissey. Let me now 
recognize Senator Lee for his questions. Senator, I see you are 
present in the digital mix, if you are also present in real 
life?
    Senator Lee. A couple of minutes.
    We will give Senator Lee just one minute. We are running a 
couple of minutes late. I think we are moving to Schweikert. 
Okay, so my good friend from Arizona, the Ranking Member of the 
House side of the Joint Economic Committee, David Schweikert, 
the floor is yours.
    We need to hear you, David.
    Representative Schweikert. Chairman Beyer, at some point we 
may be all doing this in something called the metaverse where, 
you know, we all are functionally avatars.
    And I will tell you that a couple of your Democrat 
witnesses, I am actually familiar with a little bit of their 
work, and I have some frustrations because I actually think we 
actually have some problems in our data matching. But that is 
sort of secondary. I have the personal fixation on our 
demographic curves and what is happening to the working poor 
right now. And we have to first have a moment of honesty here.
    The last year has been pretty brutal to the working poor, 
particularly if you adjust for transfer payments, you know, 
inflation, population coming across the border with similar 
skill sets and what that may mean over the next decade of 
earning power.
    So maybe there is something, Chairman Beyer, you and I 
could actually, particularly from a Ways and Means standpoint, 
find a collective understanding or agreement. And that is, what 
policy sets? Are there tweaks in Medicare? Are there tweaks in 
Social Security? Are there tweaks in the ability to save, or 
incentive to save or a savers' credit type of matching that we 
tried working on last year that would buy some additional 
retirement security particularly for the probably three 
quartiles that we are most worried about?
    Mr. Biggs, if I came to you tomorrow and asked what tweaks 
would you actually make in Social Security policy that does not 
ultimately hurt the Trust Fund, or tweaks in Medicare policy 
that might actually have a health care positive to the Trust 
Fund, but would encourage our brothers and sisters who are 
older to stay in the labor force, and we could also have the 
anecdotal discussion which I despise the anecdotal discussions, 
but it is what we all do, of health benefits and those things 
for staying in the labor force.
    Mr. Biggs, what policy sets would you move forward on?
    Dr. Biggs. Thank you very much, Congressman. Your proviso 
that they do not hurt the health of the Trust Fund is where 
things get difficult. But let me just touch on two points.
    One is that you want to make work pay at older ages. As I 
point out, with Social Security it does not. Here, if somebody 
delays retirement, almost all the extra money you pay just goes 
to Social Security. It does not go to your own benefit. So it 
is very unusual for somebody who can get their money back at 
that stage of the game.
    So what I have proposed is reducing, or eliminating the 
payroll tax at older ages in order to kind of sweeten the deal 
for people to keep working. The United Kingdom does that. Once 
you reach their normal retirement age, their version of social 
security tax goes away because you are not getting anything for 
it.
    Similar with Medicare. Go back to the Social Security tax, 
that is actually--the research shows that near-retirees are 
very sensitive to these incentives. So reducing the payroll tax 
at older ages would cost Social Security money, but if more 
people work they would be paying Medicare taxes. They would be 
paying Federal income taxes. They would be paying State and 
local income taxes.
    On Medicare, I think the Medicare as secondary payer issue 
at age 65 is--that is something that, if Medicare took over as 
the primary payer, again it is going to cost you money. But 
that would enhance--it would make older workers more attractive 
to employers. It would make work more attractive for seniors, 
because it would raise their wages. Evening it out is the 
tricky part. And when I have talked about both of these things, 
I think you want to think about them in the context of more 
comprehensive reforms.
    So I am thinking about Social Security, to be frank I would 
scale down that SS for high earners. These are folks who--their 
retirement savings are through the roof. They can and will save 
more for retirement. They will work longer. That in itself will 
help the economy.
    So I think there are ways we can make this package work, 
but we have to be not afraid of reforming these plans. A lot of 
times people are very afraid of any sort of change, but we need 
to think creatively about it.
    Representative Schweikert. Okay. Would you actually, you 
know--Medicare itself does have some income adjustments. Would 
you steepen that curve a bit and use some of those resources to 
help finance the incentives to stay in the labor force for some 
of the lower quartiles of income?
    Dr. Biggs. I would. I mean, I think Medicare has more 
effective means testing on the benefit end than Social Security 
does. There are some people--I am not primarily a health care 
guy--there are some experts I work with who say that means' 
test should be based not on your income in retirement but on 
your lifetime earnings as a way to encourage people to save and 
work more and not do the opposite.
    Representative Schweikert. Okay----
    Dr. Biggs. But it is really thinking about how you want to 
kind of put the----
    Representative Schweikert. I think I have a fairly robust 
article talking about that same formula.
    Chairman Beyer and Senator Lee, this is one we have spent 
the decade sort of talking about the Baby Boomers coming, and 
we avoided the discussion because somehow Congress forgot there 
were people turning 65 and are now well into that retirement 
cycle. The nature of work has changed. We are no longer out 
there digging ditches, or certain types of labor. And the 
United States needs talents in the labor force, particularly if 
we are going to have GDP or economic expansion.
    There has got to be a way that both the right and the left 
can actually sort of see fit to create these incentives that 
become positive for all of us. So with that, I yield back, Mr. 
Chairman.
    Chairman Beyer. Thank you, Mr. Schweikert, very much. We 
will next hear from Senator Klobuchar, if she is here. And if 
the Senator is not----
    Senator Klobuchar. I am----
    Chairman Beyer. Well there she is. Senator Klobuchar, the 
floor is yours.
    Senator Klobuchar. Thank you so much. I appreciate it, and 
I want to thank the witnesses. I think this is such an 
important topic, and I want to thank the Chairman for going 
ahead with this hearing.
    I have been actually pretty obsessed with this for awhile, 
because we have a lot of seniors in our State. And I really 
believe that there are a lot of people that want to work, and 
we also have huge workforce issues in our State. And there are 
many solutions to that, including apprenticeships, immigration 
reform, but this is one of them, and making sure people are 
having the best experience they can and being part of our 
economy if they want to be.
    So my first question is, Dr. Ghilarducci, data provided by 
the Schwartz Center for Economic Policy Analysis showed that 
for decades returns to experience has been falling in the 
United States, meaning workers have a lower rate of return on 
income for each additional year worked.
    Can you tell me a little more, Doctor, a little more about 
the statistic from your organization? And why is it an 
indicator of the challenges older workers face?
    Dr. Ghilarducci. Right. So we saw that starting to happen 
in the last recession, in the financial recession. This comes 
off of work from the Urban Institute. It does seem like 
employers are abandoning older workers. They are not training 
them. They do not value the experience. But there are some 
sectors that are hoovering up older workers. Warehousing, the 
stooping and bending I talked about, in Amazon warehouses. 
There was an Academy Award winning movie about that. And home 
health care. So--but as to your question, the return of 
decreased experience is a result of employers not valuing older 
workers. And it means that, you know, those catch-up 
contributions that you put--Congress put in to have that extra 
way that older workers can save for retirement, it does not 
work for people who peak around 45.
    So Congress has to completely rethink the age of retirement 
security because of the decline in the return to experience.
    Senator Klobuchar. Very good. Thank you.
    Dr. Morrissey, could you talk about how work sharing, the 
work sharing benefit especially benefits older workers? In 
particular you talked about how that is an alternative to 
traditional unemployment. And I can kind of answer the question 
on my own I think in my own mind, but I want to hear from all 
of you. So, Dr. Morrissey?
    Dr. Morrissey. Thank you for that question. First of all, I 
just want to make it clear that even though I am a huge fan of 
work sharing, and I am very, very grateful to Congress for 
including work sharing in the CARES Act, which was wonderful. I 
think it was under-utilized and remains under-utilized in the 
states that provide it.
    And what work sharing does is it allows employers, instead 
of having to lay off workers so they access unemployment 
benefits, it allows them to reduce hours across the board and 
then compensate workers not for unemployment but for lower, you 
know, for lower hours.
    And some countries in Europe, in Germany, in Belgium in 
particular, use this a lot. And why it matters in particular to 
older workers is because when older workers sever their 
employment relationship with an established employer, they are 
in the--you know, then they face all of those challenges that 
we talked about earlier--long-term unemployment, discrimination 
in hiring, seeing much lower pay in whatever job they are able 
to get after the fact.
    So it is particularly important for these workers that they 
do not actually sever that employment relationship. They have 
employer-specific skills. They have more tenure, on average, 
with the employer. And this is very valuable.
    And so it is not only important for them, but it is also 
important for the economy. Because, you know, even though the 
extended unemployment benefits did help with job matching in 
allowing employer--workers, older workers to get better fit 
jobs after the fact, often there is a mismatch with the jobs 
they get after the fact because they are desperate to get any 
kind of work at all.
    I do think Congress acted very strongly, very well, this 
time around to expand eligibility for benefits, extended 
unemployment and better benefits. But----
    Senator Klobuchar. Thank you, Doctor. I want to get one 
more question in, and not cutoff another member of Congress 
here.
    Ms. Frye, I know in your testimony you talked about that we 
should dispel the notion of an average older worker, and 
highlight the different lived experiences of older American 
workers. Could you quickly expand on that?
    Ms. Frye. Sure, thank you. And I will say so quickly. I 
think the important thing to recognize is that, you know, 
people come to the table differently. What we know is that 
there are existing disparities in wages among women, among 
women of color, and so many of them simply do not have the 
earnings necessary to amass the robust retirement funds that 
allow them to sort of have a comfortable retirement. They are 
also in low-wage jobs disproportionately, and they have 
insecure jobs because they are more likely to have caregiving.
    So we have to have a diverse understanding of the 
experiences they bring to the table.
    Senator Klobuchar. Well thank you. And just two quick 
follow-ups on that. One, we all know that it is hard on women 
because they may leave the workforce for awhile to raise a 
family and the like, and then they have less retirement money 
coming in Social Security.
    And just a second point, Mr. Chair, is that I have found, 
having older workers in workplaces, I had one in my State 
office for quite awhile. It was a complete joy, because the 
younger workers, let us say, will always go to them for advice, 
and that is good to have a mix of people, including romantic 
advice. And I just found that to be such a nice mix of people, 
and I think that is true in all workplaces, and we should 
highly value some of the older workers and bring them back if 
they want to.
    So, thanks.
    Chairman Beyer. Thank you, Senator, very much, for great 
insights. And now the Senator from Utah, Senator Lee, the floor 
is yours.
    Senator Lee. Thank you very much, Mr. Chairman.
    Dr. Biggs, we hear a lot these days about our retirement 
crisis. Many say that we are saving less and less for 
retirement, and that fewer and fewer Americans, especially 
lower income Americans, have access to retirement savings 
accounts. But--and your research, as best I can tell, tells a 
different story. As you explained in your written testimony, 
your research in fact finds that Americans are actually more 
confident about their ability to retire comfortably, and that 
the United States in fact ranks among the leading nations in 
the world in terms of retiree disposable income.
    Can you elaborate a little bit about what makes America 
different in that regard? And tell us sort of why are our 
seniors better prepared for retirement? And why are they 
working longer in more productive careers than anyone else in 
the world? As you noted, this seems like an accomplishment and 
one that deserves our celebration.
    Dr. Biggs. Well thank you very much, Senator Lee. I think a 
lot of times we do not give ourselves credit. We focus too much 
on the problems we face and not enough on the accomplishment 
and the progress that we have made over the years.
    And the state of Americans' retirement income security, 
that is sort of the backdrop for hearings like this, because 
work in late middle age it can kind of make or break your 
retirement. So maybe I need to give you some facts, and these 
are facts.
    Compared to baffling traditional defined benefit pensions 
with their peak in the 1970s, these are the pensions that 
everybody pines for that says these were the best pensions 
ever, but compared to them the share of workers participating 
in retirement plans has increased dramatically.
    The percentage of our salaries that we save for retirement 
has increased dramatically. Total retirement plan assets have 
increased sevenfold since then. Fed data show the retirement 
savings are up in every age group, every income group, every 
educational range group. The number of retirees who receive 
benefits from a private retirement plan, once they retire, that 
is up dramatically. And across the board, at all parts of 
income distribution, retirement incomes are at record highs, 
while poverty and old age is at record lows.
    In opinion surveys, 80 percent of retirees tell Gallup they 
have enough money not just to survive but to live comfortably. 
Only 5 percent tell a Fed survey they are finding it hard to 
get by. And these are not anecdotes to come up with, and they 
are not just numbers I cook up. These are actual data points.
    And so what we need to do is square what the other 
witnesses are saying with the actual data of what we have seen 
happen. And the way you bring this together is, despite the 
problems that people face, whether it is in finding jobs, the 
good wages at older wages, or getting access to retirement 
plans, or affording to put money into it, we are clearly better 
off in terms of retirement preparation, retirement income, 
today than we were in the past.
    Just to sum up, in my testimony I gave the example of the 
French scientist who said the bee should not be able to fly 
because the aerodynamics of the bee are not very good. And the 
bee does not know that, so it flies anyway. And this is a case 
where everybody told Americans, oh, you cannot do it, and we 
did it. 401(k)s are more common because they do not place a lot 
of burdens on employers to run.
    We have a more free, vibrant labor market. That gives more 
opportunities for people to work longer. They reward them for 
doing that. So our system is messy, but it actually works. And 
the data show that it has worked better than a lot of other 
countries.
    Senator Lee. Thank you. That is very good insight. Research 
gathered by my staff on the Joint Economic Committee Social 
Capital Project finds that social capital among older Americans 
has declined over time. Americans approaching retirement age 
today tend to be less likely to have a spouse or a companion, 
have fewer children, they tend to have fewer close friends and 
family members nearby, and tend to be less likely to attend 
church services regularly than they were 30 years ago.
    One bright spot is that many older Americans are more 
likely to be employed. The workplace seems to be an 
increasingly important source of social connection for these 
Americans.
    But, Dr. Biggs, I agree with you that the best way to 
support older Americans who wish to work, and to empower them 
in the workplace, is to have a strong economy. And that means 
an economy with plenty of job opportunities.
    What types of general policies do you think would best 
support a strong labor market to make those things possible?
    Dr. Biggs. Thank you, Senator. I know you are running short 
of time. But the key here is to make a lot of jobs available to 
people. When you have many choices of jobs, the employer who 
discriminates is going to be forced out by the ones who do not. 
When you have many choices of jobs, that bids up wages.
    A lot of times there is a temptation to say we do not want 
just jobs, we want jobs, and this, and this, and this, and 
this. And all of those benefits are things that make the 
employer less likely to hire you. And you can mandate whatever 
benefits or protections you want, but if the employer does not 
want to hire older workers they are not going to do it.
    So we have to have something where we have as many jobs as 
we possibly can, and then let the market push things up. You 
know, prior to the recession we saw wages for the first time in 
many years increasing for low earners faster than they did for 
the very rich. And that is the sort of thing that warms my 
heart, because I want to see opportunities for people. So if we 
try to make the market more vibrant, and sometimes that is at 
odds with trying to solve all of these individual problems we 
look at.
    Senator Lee. Indeed. Thank you very much, Dr. Biggs. Thank 
you, Mr. Chairman.
    Chairman Beyer. Thank you, Senator Lee, very much. I will 
now yield the floor to my friend from Maryland, Congressman 
David Trone.
    Representative Trone. Thank you very much, Chairman Beyer, 
and Ranking Member Lee for holding this hearing. And thanks to 
our witnesses.
    As a fellow business guy like yourself, Mr. Chairman, you 
know, it is so key that we have these older workers with us. We 
have almost 13 million Americans now in the workforce since the 
year 2000 to now. We have got a tremendous shortage of workers, 
but these older workers bring such maturity, insights, and 
dedication that my company just cannot find enough folks in 
this age bracket.
    So let us talk a second. Dr. Ghilarducci, I have seen 
firsthand on this record how tough it is to re-enter the 
workforce. We had a paper mill close in Luke, Maryland, that 
was open for 131 years. And all of a sudden, 800 workers were 
out of jobs and needed retraining. Most of them were much older 
workers.
    We submitted a Trade Adjustment Assistance Application. 
That was approved, and that helped them start on new career 
paths. But as we grow our economy, what role should retraining 
play in helping these older Americans succeed?
    Dr. Ghilarducci. Right. You need more money for training 
programs. The training programs now are rewarded for placing 
people in the jobs that pay as well or better than they had 
before. And if you have a lot of older workers in your training 
program, you are going to get a low score. Because older 
workers tend to make less than they did before, especially if 
they have lost a union job and are being trained for a lower 
union job. So you could raise wages through the congressional 
methods that you do, but the National Senior Employment Act 
that is coming up for renewal, those training programs need to 
be restructured and re-funded.
    Representative Trone. Thank you. That is great. How do we 
combat age discrimination and dispel that myth that these older 
Americans--I mean, they are outstanding. And yet there are 
problems. Too old for that job, or she is. It is crazy.
    Dr. Ghilarducci. Yes, we have lots of really good work in 
the gerontology end of the social field to do that. We have to 
start, you know, with ourselves and stop making jokes about 
senior moments, and fiddling with technology. That has to stop. 
But mainly it is up to Congress, again the Justice Department, 
because age discrimination really cannot be tolerated. And 
there are lots of proposals to make enforcement of the laws we 
already have tougher.
    Representative Trone. Thank you. Ms. Frye, in your 
testimony you highlighted the importance of paid family and 
medical leave for older Americans. We all know, as an 
employer--you know, I have 12,000 employees in my company. It 
is great for the employees. It is great for the employers. And 
it addresses the gender wage gap when it is provided to both 
spouses. So rather than just expecting the woman to take care 
of a sick family member, what should we do to encourage not 
just providing more paid family leave and medical leave 
benefits, but a full utilization of these benefits by older 
workers?
    Ms. Frye. That is a great question. I think you are 
absolutely right that paid leave is really critical to enabling 
folks to manage their care responsibilities. And I think we 
have to reinforce the idea that paid family and medical leave 
is for all workers. It is not just a parental benefit. It is 
also dealing with older workers and their needs. And we have to 
dispel the myths and sort of the cultural barriers that 
sometimes disincentivize people from taking leave, and 
recognize the point that you made--which is, that by taking 
leave, we can actually make workplaces more productive. We can 
often improve morale and strengthen the business efficiency 
overall.
    So I think it is the combination of sending that message 
about why paid leave is important. And then creating the 
culture within the workplace to show that in fact when you take 
it, it is beneficial and supported.
    Representative Trone. I think you are absolutely right on 
the culture piece which is really key.
    The last quick question. My top priority in Congress has 
been the opioid crisis. And a lot of our older Americans that 
have been hit harder by the opioid crisis--this is for Dr. 
Morrissey--what we see is that between 1999 and 2019, the older 
American workers are 55 and up have a tenfold increase on 
addiction numbers. Tenfold.
    So what do you say, Dr. Morrissey, should we ensure 
Americans struggling with substance use disorder have the 
resources to participate in the workplace?
    Dr. Morrissey. No, that is a really important point. There 
are economists who have written about the depths of despair. We 
have seen an increasing uptick in suicides, in overdoses, and 
at all ages, and including in many cases older workers. And it 
is partly economic, but this is definitely concentrated among 
lower paid, less-skilled workers, often jobless workers. And it 
is tragic.
    And I just want to put in, one of the groups of older 
workers that we have seen leaving the workforce is actually 
therapists in fairly large numbers during the pandemic. And we 
need more therapists. We need more programs. We need much more 
funding for treatment and mental health services.
    There is no doubt about it. So thank you for that question.
    Representative Trone. Thank you. I yield back, Mr. 
Chairman.
    Chairman Beyer. Thank you, Mr. Trone, very much. I now 
recognize the Senator from Texas. Senator Cruz, the floor is 
yours.
    Senator Cruz. Thank you, Mr. Chairman.
    Right now the American people are suffering from the impact 
of historic inflation brought about by President Biden and the 
Democrats out of control and reckless spending. Our national 
debt has surpassed $30 trillion, and inflation is raging across 
the country, with our latest economic reports indicating that 
inflation has increased by 7 percent over the last year, the 
highest inflation this country has seen since 1982, 40 years 
ago.
    At the end of the day, this is not complicated. High 
inflation, which can happen when the Federal Government prints 
money to keep up with massive spending increases, presents a 
real problem for American families because it means that their 
dollars have less purchasing power as prices go up, and it 
erodes the value of their savings.
    As a result, it is more expensive for hardworking families 
to put food on their tables, to put gas in their cars, and to 
heat their homes. Even worse, inflation hurts the most 
vulnerable among us the most, including seniors who have 
diligently saved to spend their retirement years on fixed 
incomes and now find that their savings are worth less than 
they expected.
    Dr. Ghilarducci, would you agree that high inflation hurts 
our Nation's seniors, and hurts those living on a fixed income?
    Dr. Ghilarducci. Yes, one of the best things about Social 
Security, it's inflation indexed. And health care prices oddly 
did not go up as much as inflation. So inflation hurts working 
families for sure, especially if their wages have not caught 
up, and they have not. But seniors who have Social Security 
actually got a big boost because of inflation. So it is ironic.
    I am not downplaying it, but with health care not going up 
as much, and Social Security being inflation indexed, they are 
a little bit more protected.
    Senator Cruz. So I will note that in October 2013 you sent 
out a tweet that said reports on low cost of living adjustments 
suggest the system is not working. But low inflation is good 
for fixed income seniors.
    Dr. Ghilarducci. Sure, yes, for those workers who--for 
those people who have to rely on 401(k) distributions, you 
know, who do not have inflation indexing, sure. But in terms of 
the current situation now, having----
    Senator Cruz. So your views have not changed? Your views 
have not changed? You agree that high inflation hurts seniors?
    Dr. Ghilarducci. It does, and we need to make sure our cost 
of living index reflects the patterns. But you asked me about 
right now, and there are----
    Senator Cruz. Well the reality right now is that prices are 
rising across the country, and family grocery bills continue to 
climb higher and higher. Let's review the prices of a handful 
of popular supermarket items.
    Over the last year, the price of steak is up 21.4 percent. 
The price of chicken is up 10.4 percent. The price of milk is 
up 4.2 percent. Eggs are up 11.1 percent. And even fresh fruits 
are up 7.9 percent.
    Dr. Ghilarducci, you recent wrote an article for Forbes in 
which you stated, quote, ``Vegetarians can cope with inflation 
better than steak-eating Ford F-150 owners.'' And you suggest 
that for Americans to survive inflation by switching from 
expensive things to cheaper things, and liking it. Well, I've 
got to tell you there is a whole lot of steak-eating, Ford F-
150 owners in the great State of Texas, and would it not be a 
better way to help America suffering the effect of Biden's 
inflation crisis, wouldn't it better to adopt appropriate 
monetary policy such as reining in out-of-control spending and 
debt, rather than forcing people to abandon their preferences, 
not eat steak, not drive trucks, change their lifestyle?
    You know, it reminds me a little bit of the October 2021 
Washington Post op-ed in which consumers were just told to, 
quote, ``lower your expectations.'' Is that the right answer 
for consumers?
    Dr. Ghilarducci. Yes, no. Thank you for bringing that up. I 
was making the point that people can change their consumption, 
but that could be bad. I mean, eating quinoa when you want 
steak is a decline in the standard of living absolutely. But a 
lot of the places where we are seeing price increases is 
because of the concentration of monopolies and pricing power in 
those industries.
    So we have to look, industry by industry, to see what kind 
of forces are forcing up those prices. Inflation----
    Senator Cruz. But we are seeing inflation across the board. 
I assume all of the witnesses today are familiar with the 
Congressional Budget Office and the Penn Wharton Budget Model.
    Dr. Ghilarducci, are you aware that there are recent 
studies that confirm that inflation costs the average U.S. 
household an incredible additional $5,000 per year?
    Dr. Ghilarducci. Sure. And we are seeing wages go up in all 
places. Economists know that it affects different people 
differently. And we need to not let it go out of control. We 
are in agreement.
    Senator Cruz. And an additional $5,000 a year hurts 
everybody, but particularly seniors and those on fixed on 
incomes.
    Dr. Ghilarducci. People on fixed income and low wages for 
sure.
    Senator Cruz. Thank you.
    Chairman Beyer. Thank you, Senator. Thank you, Dr. 
Ghilarducci. I would point out as a business person that Black 
Rock studies show that virtually none of this inflation was due 
to policy decisions, but rather to the pandemic's impact on 
supply chains.
    With that, let me recognize my friend, the former Treasurer 
of Kansas, and our distinguished committee member, Mr. Estes.
    Representative Estes. Well thank you, Mr. Chairman, and 
thank you to all the witnesses for joining us today. Obviously 
before COVID hit we were concerned about the workforce, and 
having enough workers as we move forward, and it is even more 
important now as we look at coming out of COVID and moving 
forward and getting the economy going again.
    You know, I share the concerns mentioned earlier about 
inflation and the issues there. And we look at some of the 
decisions around curtailing things like the Keystone Pipeline 
and that directly led to really higher gas prices that a lot of 
people are being impacted by, whether they drive their Ford F-
150s or even hybrid electric vehicles as well.
    Before the pandemic hit, our economy had taken off thanks 
to some of the pro-growth policies that really got Washington 
out of the way and returned economic freedom to the American 
people by removing so many of the burdens from regulations that 
had halted growth that the prior administration gave the 
entrepreneurs hope that they could succeed again in America.
    Today I worry that many of our would-be entrepreneurs, 
especially those who are looking to innovate later in life, 
would be scared away from even trying. Anyone who wants to 
start a business today has to face supply chain disruptions, 
rising prices, higher taxes, and ever-changing Washington 
mandates. These Americans are critical to our Nation's success.
    Over their lives they have acquired a tremendous number of 
skills and talents that benefit our Nation. When we discuss the 
labor market, I think it is important to understand how new 
taxes, regulations, and government programs impact them and our 
economy. Raising new taxes on Americans to fund even more 
government programs is not the solution.
    We have hundreds of redundant government programs, but 
before we create new ones and raise taxes to fund them we need 
to look at structures that we already have on the book.
    Dr. Biggs, as you noted in your testimony, older Americans 
are faring quite well with more savings, lower poverty rate, 
and better retirement security today than in the past. And in 
2020, during the height of the pandemic, only 11 percent of the 
retirees decided to quit because they could not find 
retirement--because they could not find employment.
    It seems like so many of the retirements are because 
Americans are choosing to retire. Looking at those trends, how 
should we as policymakers think about our role in supporting 
older Americans so that they can make retirement choices that 
are best for them?
    Dr. Biggs. Well thank you, Congressman. We talked a little 
bit earlier about data on what is happening to people who have 
shifted from work into retirement during the COVID pandemic, 
and there is some debate over what actually has happened. But I 
think it is interesting. If you look at people in the sort of 
near-retirement range, you know, 64, 60 to 65, who report 
themselves as being retired, and they are asked in a Federal 
survey would you like to go back to work if you could find a 
full-time job, or a part-time job? Over 98 percent of those 
retirees say, no, I do not want to go back to work. And that is 
consistent with past data.
    And what this shows is that most people are in fact 
retiring happily. You know, their incomes are okay. In survey 
after survey, if you ask them, you know, you keep telling 
retirees, oh, you are not doing okay, and they are like, no, I 
am alright. So both the hard data from statistical agencies and 
survey data show by and large they are doing fine.
    We had exceptions and we want to address them, but we do 
not want to throw out the baby with the bathwater because we 
have really done very, very well on this end.
    Now in thinking about where we are and going forward, I 
think we want to build on things. Dr. Ghilarducci, and my 
fellow witnesses, talked about expanding options for 
retirement. I agree with that. I think we can probably agree on 
secondary payer issues with Medicare. Those are things we can 
do to further the progress that we are making.
    But my general thought is let's open the door to more jobs, 
but not start micromanaging exactly how all these things are 
going to work. Something like age discrimination, I oppose it 
and when we know it is there we should prosecute it. But there 
are potential downsides to being too aggressive on that.
    There is some research that finds that aggressive age 
discrimination laws might actually reduce employment. So we 
just want to be careful about being over-ambitious and thinking 
we can micromanage how the economy works. Because the economy 
has a mind of its own that goes beyond what Federal policy can 
dictate.
    Representative Estes. I am glad you made that point. I mean 
one of the things I did in my career in the private sector 
before I ran for public office was to look at operational 
efficiencies. And as part of that, it came down into looking 
for the root cause of the problem. And so I want to make sure 
as we look for solutions that we are actually building 
solutions that actually are designed to fix the problem and not 
something that may be a symptom of the problem but not really 
what is causing it.
    So with that, Mr. Chairman, I will yield back.
    Chairman Beyer. Thank you, Mr. Estes, very much. I want to 
thank Congresswoman Herrera Beutler for her extraordinary 
patience. I think it is your turn.
    Representative Herrera Beutler. Can you hear me okay? It 
just occurred to me. Okay, perfect. This has been an 
interesting conversation. I was with you, Mr. Chairman, in 
November. We got to sit and listen to an amazing economics 
professor with the Lenin School of Economics, Linda Yueh--I 
hope I am saying it correctly--and we were asking some of these 
questions. Because even if you talked about the growth in the 
economy, but we are not seeing that, and we are not seeing it 
in wages.
    I remember asking her specifically about who is not 
working? And some of those questions have been answered here, 
like who left and who has not come back in the line, and she 
really narrowed it down for us. She was talking about workers 
who were about 50 years old who were in the Rust Belt, who were 
also working age men as a massive problem. She did talk about 
opioid use, and that scourge that kind of started with the Rust 
Belt. Obviously it is being felt everywhere. And just trying to 
help me identify who is not working. And some of this fits in 
with what was being shared today.
    The other thing she really talked about was productivity, 
the productivity is low. And so when you are talking about 
older workers, and kind of the decline of manufacturing and 
stagnation of wages. How much of it is due to technology, and 
how much of it is due to other factors? And she said about 80 
percent of it was technological.
    So I am hearing all of this, thinking about older workers, 
and really we do not want to just put them on a program where 
they are not being productive. They are too smart for that.
    If you are working as an older American, you are doing it 
because you have to or because you love it. If you love it, 
generally it is not a financial issue. If you have to, you have 
to. So in my mind, how do we get them into something that they 
can at least enjoy? And I think technological advancement 
training initiatives that will help both them but also boost 
productivity because that is ultimately how we get out of this 
stagnation. And I have not really heard anybody talk about 
training opportunities in that sector.
    One of the things we talked about, as everybody went 
offline and some workers were fortunate enough to be able to 
use Zoom, and Zoom is available to everybody, but I think it 
was about half of workers could not do Zoom for their job.
    So how do we make these transitions for older Americans? 
How do we help boost the productivity but also bring them into 
a 21st Century workforce? And that is really open to everybody.
    Dr. Ghilarducci. Let's look at the industries that are 
really growing. Home health care is 1.3 million of the new 12 
million new jobs. So it is a big portion, the biggest portion 
of the new jobs created.
    How do you create better conditions and better technology 
and better productivity in home health and personal health 
care? Well, in other countries where the workers are paid a lot 
more--and this is a disproportionate sector that hires older 
workers. It is really characterized by old women taking care of 
even older women. They actually have a system of medication 
information. They have technology that helps with patients. 
They do this in Japan.
    If you pay the workers more, the employers treat the 
workers better, often applying technology to their job.
    Representative Herrera Beutler. Can I jump in there really 
quick, because I have worked in home health. I have taken care 
of older women, and I have done this before. And it is grueling 
work. It is difficult, and I remember just trying to bless and 
serve some of these lonely women, and knowing that this is only 
going to grow. These are women on state aid.
    And one of the things that I think is critical is that we 
have to find a way to also boost some areas we as a society are 
going to put money into, because we are not--I am not going to 
allow my grandma or your grandma to live on the street, period. 
That may not be a boost to overall GDP growth and productivity 
in the economy, but you have to balance this if we are going to 
spend that money, right? Because, again, I don't want your 
grandma out there, and I sure as heck don't want mine.
    So how do we also then--I am not even thinking about 
necessarily the workers in that space, although we have to make 
sure that they are in a good place, but seniors who are coming 
out of a job, and maybe having to get retrained into something 
else, to boost the productivity. Because ultimately that is 
what a company needs in order to expand here, correct?
    Dr. Ghilarducci. Yes. I mean some of that will be corrected 
by the market, where the employers who find they are going to 
get over the fact that they do not want older workers because 
they cost more, you know, or because they have--they perceive 
them not to have technological--so that is going to take care 
of them. That is right about that.
    But remember my answer about the training programs are not 
incentives to actually help older workers, and really wean the 
low-income senior program to help apprenticeships. At 68, 
there's a thousand people in it, and we have millions of people 
who need that training.
    Representative Herrera Beutler. Thank you. Mr. Chairman, I 
am out of time. There is no possible chance, just because I 
brought up the rear, that Mr. Biggs can maybe do a quick 
comment on that, is there?
    Chairman Beyer. I think that would be fine.
    Representative Herrera Beutler. Thank you.
    Chairman Beyer. And Mr. Arrington is going to bring up the 
rear. And we are going to go another round, too, if you would 
like to save it.
    Go ahead, Dr. Biggs.
    Dr. Biggs. Well thank you. I am going to take my time while 
it is on off. But thank you very much, Congresswoman.
    This is a slight different tack, but I think it goes back 
to some of the points Senator Lee made at the beginning about 
social capital. And this actually has direct impact on things 
like long-term care. In the past, a lot of long-term care was 
done informally. The one spouse would care for the other. The 
extended family, and moved from Washington, DC, to Oregon so 
that I could be closer to my wife's family, and my son would be 
near his grandparents.
    As families have broken down, more and more retirees are 
living alone. And that forces them to rely more on professional 
care while they are in declining health, and it puts more of 
them into long-term care because they do not have somebody to 
care for them.
    This has an impact on them, and it has an impact on the 
labor market. It is going to have an impact on the budget, 
because Medicaid long-term care costs are going to go up 
because our social fabric has broken down.
    And so it is--all of these things are interrelated with 
each other. Something like home health care, the productivity 
there is tough to increase because it really is a very, very 
labor intensive task. It is hard. If we want to group people 
together, say you have 10 seniors all live in a home, then 
maybe we can increase the productivity of the home health care 
worker. It is a very, very tough thing to get on top of.
    Representative Herrera Beutler. Thank you.
    Chairman Beyer. Thank you. Now let me recognize my friend 
from Texas, Mr. Arrington, for his questions.
    Representative Arrington. Thank you, Chairman Beyer, and 
the witnesses. I have enjoyed the back and forth and have 
gained some new insights here on the vary important topic of 
our older workers who want to stay in the job participation. It 
is better among the older workers so they seem to want to stay 
if they can.
    We have got to get our economy back where they have that 
choice and can exercise their choice to stay in the workplace 
longer. I think that is the most important thing, that we do 
not need to do any more harm, in my opinion, with respect to 
the labor shortage and inflation, the input costs and all the 
stresses on the economy currently. But I have a broader 
question about those companies who are doing well attracting or 
obtaining older workers. I am sure there is more time spent on 
millennials and other generations and what they need, and what 
they are looking for to stay incentivized to be not only at 
work but most productive.
    What does that look like for the older worker? You know, 
and anybody can answer this, but--and Dr. Biggs, maybe you 
could start, but I just welcome anybody to jump in. What 
companies are doing the best in that regard? And what states 
are doing the best?
    So both private incentives, and maybe even State or public 
incentives or programs in combination that are working to keep 
these folks in the game longer. Obviously I think there are 
quality of life benefits for these older workers as well as has 
been discussed. So some thoughts on that?
    Dr. Biggs. Well thank you very much, Congressman. I do not 
know the State level data very well. It would not be difficult 
to produce it, but often we focus at the Federal level, and 
those are just the data that I know better. But I can take a 
look into that.
    Thinking about companies or industries, Professor 
Ghilarducci talked a little bit earlier about how some of the 
growth is in service-related jobs, home health care areas such 
as those. I think offering flexibility to your employees is 
helpful. At those ages, many people want to work part-time. And 
so giving them the opportunity to do that I think is helpful. 
Often flexibility in terms of the place where you work. Again, 
because people want to stay near their families. But there is a 
lot of employment ages and small firms. It is maybe a little 
easier to them if you are under 20 or so employees and you do 
not need to offer health care, and that is a big issue for 
small employers because health care costs have gotten higher 
and higher, and disproportionately on older employees.
    But I completely agree. If you are thinking of strategies 
to make it easier for them. But if I think big picture, 
something like reducing health care costs. You know, we think 
of it in this macro perspective, a budgetary perspective. When 
Dr. Ghilarducci talked earlier about how this lower returns to 
experience in the labor force today than there used to be, that 
means lower increases in people's wages as they get older.
    But what is happening though is employers are paying more 
and more in terms of health care costs. And that comes out of 
people's wages. Most economists will agree on that. So simply 
trying to reduce health care costs, not reallocate them, not 
how to finance them, but to actually reduce these costs, that 
is a bonus that makes older workers more attractive to 
employers, makes work more attractive to older workers because 
it passes through their wages. So there are micro things we can 
do, but I think health care is a real macro issue that if we 
can get on top of it reaps dividends for the budget but really 
for employees as well.
    Representative Arrington. Well thank you. And just to 
follow-up with you, in the interest of time, Dr. Biggs, you 
touched on the Social Security benefit formula that 
disincentivizes folks to stay in the workforce longer, but 
Americans research proves out that Americans prefer private 
savings accounts versus expanding Social Security. I think they 
get a better return. They get more choice in it, obviously.
    But what incentives should Mr. Beyer's, and as a Ways and 
Means member myself and others, be looking to put in place to 
encourage more private savings on top of our efforts to address 
the solvency problem with Social Security? Because I do think 
that is a very important safety net. I am talking about 
additives.
    Dr. Biggs. Thanks very much. I know you are running out of 
time here, so if I have to be cutoff let me know. But I 
commissioned a survey where I asked Americans: If you want to 
increase your retirement income, would you rather pay more into 
Social Security and get more from Social Security? Or would you 
rather save more on your own through an IRA and a 401(k) and 
get more from that in retirement?
    Across the board, about three-quarters of Americans would 
prefer to save more on their own. So that private thing really 
is attractive to people. They trust it. They feel they can 
control it. Some want to build wealth and pass it on. But the 
issue is how do we expand that?
    Things like automatic enrollment, which you passed in the 
Pension Protection Act, that has helped. But we want to think 
about how we expand access. Ultimately, I think something--some 
sort of Federal plan for workers and small businesses who 
cannot get a retirement plan through their employer makes 
sense.
    We also want to think about things like lawsuits against 
employers regarding 401(k)s. That is going to disincentivize 
offering those plans. Again, you know, we can lead the horse to 
water but we cannot make it drink, and you want to save 
incentives that make it attractive to people and reducing 
disincentives to do that.
    Representative Arrington. Thanks for your incredible 
indulgence, Mr. Chairman. And thank you, Mr. Biggs, for your 
comments.
    Chairman Beyer. Thank you, Mr. Arrington, very much.
    We are going to go to a second round, for those who would 
like to stay. Let me start.
    Dr. Ghilarducci, Dr. Biggs was talking specifically about 
workers left out of potential retirement. Can you talk about 
your TSP for some, or the Guaranteed Retirement Accounts?
    Dr. Ghilarducci. Yes, what I think Representative Arrington 
would be interested in, as well, and everybody, because it is a 
bipartisan plan.
    Kevin Hassett, who was a former President Trump Chief 
Economist and me, and we are really far apart in terms of 
ideology, have come together as economists by looking at the 
Thrift Savings Plan, about how well it works, and it works well 
by getting low-income people into it because it provides a 
match.
    So we have proposed a very detailed plan for the government 
to provide a match to people who earned below the median wage. 
And this would allow them to participate in the program that is 
modeled after the TSP and perhaps be a sidecar to the Thrift 
Savings Plan so they can start accumulating assets.
    My testimony today pointed out that that will help the 
labor market. Because with more retirement security, the people 
who are forced out early, or who truly want to stay but have a 
fall-back position, would have better jobs. So it is a virtuous 
circle.
    Chairman Beyer. Thank you very much.
    Ms. Frye, in his testimony Dr. Biggs tells us that extended 
work lives may be an even better way to increase retirement 
income security than other ideas. But why can't everybody just 
working longer? Have we seen different life expectancy gains 
among different categories of Americans?
    Ms. Frye. Well, absolutely. You know, it goes without 
saying that not everybody works the same length of time, and we 
certainly see disparities along ethnicity, in particular. I 
think that it also goes back to the conversation that people 
were having about the nature of work, and the work that many 
people are doing.
    If you look at many older workers of color, particularly 
older Black workers, both women and men, there is a significant 
percentage. One in three older women of color in jobs that are 
physically demanding. So even if they want to stay longer, they 
often cannot from the lifting and the physical exertion that is 
excessive.
    So I think it is not a simple thing they just want to work 
longer, but also making sure that they can take care of 
themselves and have the ability to care for their own well-
being and their families, and have the income to do so.
    So you really have to understand sort of the differences 
along race and gender, and the different ways that people come 
to the table.
    Chairman Beyer. Thank you. Dr. Ghilarducci, you and Dr. 
Biggs agreed on Medicare as first payer, which certainly makes 
a lot of sense. Have people priced that out before? Have we 
attempted to do this, and does the price tag scare us away?
    Dr. Ghilarducci. It is not that scary, but it is positive 
in the tens of billions. However, it never factors in how much 
healthier the workers will be, our people will be when they--as 
they age into Medicare.
    If you can get health insurance to people quickly, also if 
you lower the age--I usually compare it to lowering the age so 
that if you are out of work at 58, you still have health 
insurance. That can save money. But it is really important for 
smaller businesses that have health insurance for all their 
workers, because they get the hit on the experience rating when 
the older worker comes in. That answers Representative 
Arrington's question. What kinds of companies are more open to 
older workers? And it is the bigger ones. And a lot of it is 
because they can absorb the health insurance costs.
    Chairman Beyer. It would almost be like a reverse positive 
incentive to get the older worker in because they are less 
expensive.
    Dr. Ghilarducci. Yes, yes. Good point.
    Chairman Beyer. Dr. Morrissey, I was impressed with Dr. 
Biggs pointing out to me that I am--at 71\1/2\ I am paying into 
Social Security and I am not getting anything for it. Have you, 
or the AFL-CIO, in your various roles considered the notion of 
once you have maxed out what your Social Security return is, 
that you should not have to pay in anymore?
    Dr. Morrissey. Well first of all, you should be tapping 
Social Security. After 70, you do not get any advantage for 
delaying. So you should go right now--well, actually after 
April when the offices open up again--and start collecting.
    Chairman Beyer. I do get my check every month, but paying 
in does not change it all.
    Dr. Morrissey. No, but that is a really good question. I 
actually have a lot of disagreements with Dr. Biggs on a lot of 
these points. He conjures up an image where, you know, workers 
want to work longer, they can work longer. As a result, they 
are more comfortable, except that there is this little problem 
which is that extra benefits will create a disincentive to 
work. So any expansion of Social Security or something like 
that is going to actually harm this happy scene that he has 
created where, you know, we are working longer, it is all 
happy. It is by choice. And older Americans are comfortable.
    None of that is actually true. I am sorry to be 
disagreeable, but for example just to get onto the comfortable 
thing, when you do international comparisons, the reason that 
Americans look like on the surface that they are doing well at 
older ages is because they are working. They are having to 
work, where Europeans are at leisure at the same age.
    And also the other thing is that last year we had this 
record-breaking low poverty rate because of transfers last year 
that were unique to last year. And also because we use a 
measure of poverty that is not very realistic. If you use the 
supplemental poverty measure, even last year, seniors were 
actually much more--had higher poverty rates than working age 
Americans.
    In terms of whether they want and intend to work longer--
and I am sorry I am going over, but I think the Democratic 
witnesses here have gotten less time to contribute--in terms of 
whether or not they can work longer, research by Richard 
Johnson and co-authors at the Urban Institute have looked very 
closely at this. And he even zeroed in on workers who had 
stable employment, who were five years or more with the same 
employer in their early 50s, and two-thirds of those workers 
experienced involuntary job loss before they retired, and only 
one-tenth of those that lost their jobs actually managed to get 
earnings anywhere close to where they were before.
    So it is not at all a choice. Most workers, for health 
reasons, because they are laid off, you know, even if they 
expect to retire or want to retire later, they cannot.
    And finally--and I am sorry to again use up a lot of time--
but the idea that Dr. Biggs made a strong point early that 
workers have a very, very strong incentive to keep working for 
the reasons you mentioned, that the longer you work the less 
time you have to support yourself in retirement, the more you 
can save, and your benefits are also higher up until age 70 in 
terms of Social Security. All of these factors hugely overwhelm 
any supposed disincentive effect of paying taxes for benefits.
    In fact, the benefits that we have been talking about that 
we need, paid leave and everything like that, would draw more 
workers into the workforce. What we have seen in the pandemic 
is workers leaving because they are scared to work because they 
do not have sick leave, because they are in danger. So in fact, 
it is completely backward.
    The more we protect workers, the more benefits that protect 
workers, the more we are going to keep older workers into the 
workforce. I do agree that we should take measures to equalize 
health care costs by age. I am not sure that incentivizing 
people to hire older workers would be viewed as fair, like 
making it completely free for the employers to have health care 
but still paying for younger workers, but nonetheless we do 
need to take that out of the equation in some form. But it is 
expensive. I mean, we have not even been able to fix the 
problem that people are waiting for Medicare when they are 
disabled, which I think is a really critical problem right now. 
And that is a much, much smaller amount of money.
    But anyhow, I am sorry to eat up the time, but I was--I had 
a lot to rebut. Thank you.
    Chairman Beyer. Dr. Biggs had the advantage of having many 
Republicans show up to ask questions, and we had Senator 
Klobuchar and Mr. Trone.
    Mr. Arrington, you are welcome to do a second round of 
questions.
    Representative Arrington. I am just going to give Dr. Biggs 
a chance to defend his honor.
    Dr. Biggs. Well----
    Representative Arrington. No, I am kidding. I am kidding. 
This is all love and passion, and I think we all want to 
address the challenges and the problems. We have different ways 
to do that. That is my experience at least, that most folks 
motives are to help our fellow Americans.
    But I will say that inflation--and not to beat up my 
Democrat colleagues on account of the spending--I had a gist on 
that piece, we had a former Federal Reserve President of the 
Kansas City Reserve Bank, Tom Hoenig talk about the easy money 
policies that have contributed to inflation as they did in the 
1970s. And not only is it the most punitive regressive tax on 
everybody, especially the working poor, but it also has 
separated--given a great gap in separation between the haves 
and have-nots because those who have assets have seen their 
asset values go up. So the rich got richer and those that did 
not have asset ownership in land, stocks and bonds, et cetera, 
they were out of luck.
    So I think that is a double whammy for the folks that I 
think we all want to help the most in this country. I am 
particularly concerned about, when we talked about retirement 
security, the unfunded liabilities that are in the State 
pensions. I know in 2010, the unfunded liability in the New 
Jersey State Pension was a trillion dollars. And I do not know 
how much in the system there is. I cannot quantify it. I am 
sure, Dr. Biggs, you have looked at it, as have others, but 
what do we do with this?
    It maybe a bit of a crisis if it is not addressed. I 
thought the Butch Lewis legislation, and the moneys in ARPA 
that went to bailing out the union pensions was horrible not 
because we do not have to spend some money to solve the 
problem, but because we never addressed the underlying causes 
so that we do not have to repeat it.
    So I guess what do we do about the underlying causes so we 
do not create more hazard? But then how do we address it to 
give that sense of--not just ``sense,'' but real retirement 
security for these folks who are depending on it?
    Dr. Biggs. Well if I could answer, Congressman, it is a 
great question. I have done a lot of work on State and local 
pensions, including a recent report on New Jersey. I was 
appointed to the Financial Oversight Board for Puerto Rico 
which is bankrupt, in part because of my background on State 
and local government pensions.
    Those are a big problem. And a comparison to Social 
Security is helpful. When we talk about the Social Security 
Trust Fund, REAL and all that, if the Trust Fund runs out, 
there is a legal implication to it. But financially, for the 
Federal Government as a whole, it does not matter very much.
    If a State pension trust fund runs out, if you are New 
Jersey, or Illinois, if their pension fund runs out, that stays 
bankrupt because that is real money from outside of the 
government they are using to pay their pension benefits. And if 
it is gone, they have got a real problem.
    Puerto Rico went bankrupt in part because they ran their 
pensions into the ground. One point that I would make on that 
is that when ERISA was passed, ERISA is the Federal legislation 
that regulates pensions. At that point there was some 
discussion of putting State and local government pensions into 
ERISA so they would be regulated, as well. But the thought at 
that point was, you know, the states--you know, pensions are 
not that big a deal for them. States are good actors. They are 
not going to shortchange their workers, and all that. All of 
that turned out to be false. The State pensions are--if they 
were federally regulated, you would be shutting these pensions 
down, because they are very, very poorly funded. And if you 
think that the Federal Government having to bail out the Multi-
Employer Plans was a problem, when the Federal Government said 
we are going to bail out those plans, for which it had zero 
responsibility, dollars to donuts if Illinois or New Jersey or 
Connecticut, or one of these states goes under, that is a 
systemic threat to the state's economy, to the whole region, 
the Federal Government will bail those out. And they should 
simply be federally regulated the same as private pension 
funds.
    Representative Arrington. Chairman Beyer, thank you for 
letting us have another round. I just really appreciate all the 
insight. I meant to say all that about the Federal Reserve 
monetary policy and the contribution to the inflationary 
effects, and that whole greater income gap as a result. I said 
that to mention to Dr. Ghilarducci that I like that idea. I 
need to dig in, but I like the idea especially on the lower 
income, of encouraging work but giving people a piece of the 
action and ownership in our country, and a benefit like the 
folks at the higher income, to just have that exponential 
benefits to half sets in ownership.
    Dr. Ghilarducci. That's right on. I will follow-up with you 
on that.
    Representative Arrington. Perfect. Thank you so much. And 
Chairman Beyer, safe travels.
    Chairman Beyer. Thank you, Congressman. Thank you very 
much. So that concludes our discussion today. I want to thank 
all of you for joining me in this essential conversation on a 
really important topic.
    Older workers are an integral part of our American economy, 
and their participation in the labor market is going to 
continue to grow. However, we know the pandemic has thrown a 
wrench into this trend. It has harmed workers, businesses, and 
the economy, and it has also shed new light on the long-
standing challenges that older workers face.
    As we have discussed today, while many stories have focused 
on financially secure older workers leaving the labor force to 
better enjoy their golden years, a closer look evidence shows 
that this is really not the case for many. For decades, older 
workers have faced weakening bargaining power, poor quality of 
work, sluggish wage growth, and the retirement insecurity, and 
the pandemic has exacerbated these preexisting trends.
    Addressing these challenges requires public policy 
solutions, many of which you have offered today, that improve 
the economic security of our older workers and strengthen the 
labor market for all working Americans. Our shared prosperity 
and economic well-being depends on it.
    So thank you to each of our panelists for their 
contributions. As we do this important work, we will continue 
to rely on your expertise and good faith. And thank you as well 
to my colleagues for being a part of this discussion and 
sharing their wisdom.
    The record will remain open for three business days.
    This hearing is now adjourned.
    [Whereupon, at 4:16 p.m., Wednesday, February 9, 2022, the 
hearing was adjourned.]

                       SUBMISSIONS FOR THE RECORD

         Prepared statement of Hon. Donald Beyer Jr., Chairman,
                        Joint Economic Committee
                              recognitions
    This hearing will come to order. I would like to welcome everyone 
to the Joint Economic Committee's hearing titled ``Building a Better 
Labor Market: Empowering Older Workers for a Stronger Economy.''
    I want to thank each of our truly distinguished witnesses for 
sharing their expertise today. Now, I would like to turn to my opening 
statement.
                           opening statement
    Without question, older workers are vital to our collective 
prosperity.
    They support families and communities nationwide, and they bring 
decades of earned experience and wisdom to businesses and marketplaces, 
large and small.
    Prior to the pandemic, older Americans contributed 40 percent of 
the national economic output despite making up just 35 percent of the 
population. And over the last 20 years, the share of older workers has 
almost doubled--a trend that is set to continue even after the 
pandemic.
    As the United States continues its strong recovery, a primary task 
before us in Congress must be answering how we can build a stronger and 
more resilient economy, where the benefits from economic growth are 
broadly shared. Key to such an economy is a better labor market that 
ensures all workers, including older workers, have access to quality 
jobs that meet their needs and are free from discrimination.
    Over the past year, the U.S. economy has experienced record job 
growth, with over 6.6 million new jobs created in 2021, and almost half 
a million more in January alone.
    This robust labor market recovery, thought unimaginable in the 
spring of 2020, when unemployment was nearing 15 percent, is a 
testament to the American Rescue Plan, other emergency pandemic relief, 
and the widespread availability of vaccines and testing.
    But even as we recognize the record-breaking economic 
accomplishments of the last year, we must also address the ways our 
recovery has not yet reached everyone--including older workers.
    Older workers have long faced unique challenges in the workforce, 
and these challenges were exacerbated by the coronavirus pandemic. 
Decades of diminished bargaining power, stagnant wage growth, 
diminishing returns from additional years of working, and increasingly 
strenuous and dangerous jobs have contributed to widespread economic 
insecurity among older workers and constricted broad-based economic 
growth.
    The pandemic has also shined new light on the inadequacy of our 
care infrastructure to help older workers navigate work and care 
responsibilities. This has been particularly harmful to older Black and 
Hispanic women, who shoulder significant caregiving responsibilities.
    For example, one-third of home health aides are aged 55 and older, 
yet care industry wages are low and care work is physically demanding. 
This creates an untenable situation for aging providers as they are 
simultaneously less physically able to continue their work but also 
financially unable to save and retire securely.
    Further, more than one in five workers aged 45 to 64 reports being 
a caregiver to a parent. Yet the United States does not guarantee any 
workers the right to paid leave, and older workers are even less likely 
than their younger counterparts to have access to paid sick days. This 
forces many older workers to make the impossible choice between caring 
for themselves or a loved one and getting a paycheck, which harms 
workers, businesses, and the broader economy.
    Today, we are seeing these decades-long trends impacting older 
workers come to a head. Just as companies have historically used 
downturns to prune workplaces of older workers, the same appears to be 
true of the coronavirus recession. At least 1.7 million more older 
workers than expected retired due to the pandemic recession, and the 
effects have been particularly harmful for older Black workers and 
those without a college degree.
    Despite media coverage of high-income older workers choosing 
retirement to spend more time on hobbies and with their families, 
evidence shows this is not the reality for many older workers.
    The reality is that over the course of the pandemic, many older 
workers have been forced out of jobs to live on insufficient retirement 
income. For the first time in 50 years, the unemployment rate for older 
workers was higher than that of mid-career workers, and while rates 
have stabilized, older workers remain overrepresented among those who 
are currently long-term unemployed.
    Because our retirement system has not kept up with the needs of the 
aging workforce, the typical worker in the United States has zero 
retirement savings--that's right, no retirement savings at all. Among 
those that do, the amount is wholly insufficient to sustain a pre-
retirement standard of living.
    As those who have been forced into early retirement may look to be 
rehired, research shows they will experience significant barriers.
    Particularly in recessionary periods, older workers face 
discrimination and stigma from periods of long-term unemployment, both 
of which limit their re-employment opportunities.
    No worker should be forced into early retirement. And at the same 
time, no one should be forced to work long into their golden years 
because of insufficient retirement savings.
    As members of Congress, addressing these challenges in order to 
help build a better labor market for older workers and create a 
stronger economy is central to our work.
    I look forward to this discussion and learning from our witnesses 
today.
                               __________
          Prepared statement of Hon. Mike Lee, Ranking Member,
                        Joint Economic Committee
    Older Americans are the bedrock of our communities. It's hard to 
overstate their role. We rely on our grandparents for everything, from 
helping to care for our children to building our churches and 
volunteering at our local charities.
    Increasingly, older Americans also make vital contributions in the 
workforce. More of America's seniors are choosing to work because they 
find work to be a source of engagement and meaning in the transition to 
their golden years.
    Tad Greener is a fellow Utahan who was missing the social 
connections and professional satisfaction of work after being out of a 
job for the past two years due to his health. Like so many other older 
Americans, when he started looking for a job again, he thought he'd 
never get a leg up navigating the endless changes brought on by the 
pandemic.
    That's when Tad saw a story about Return Utah--a new program 
created by Utah's Lieutenant Governor Deidre Henderson to help Utahans 
who are looking for work after an extended absence. Tad applied and was 
surprised to find that the Utah Office of Energy Development needed 
someone with his technical skills. Although the position was temporary, 
after just two months into the job, he was made a permanent team member 
and is now able to put his years of experience to use.
    Tad's story is inspiring for the millions of American workers who 
are still on the sidelines, and it's instructive for us today as we 
seek to understand the barriers older Americans face. As many choose to 
work longer, a strong labor market with rising wages for all is the 
most effective way to create new opportunities and support older 
Americans.
    The good news for us today is that older Americans are doing better 
than they ever have before. Thanks to improved health and less 
physically demanding jobs, many older Americans are remaining in the 
workforce longer, and more employers are benefiting from their 
reliability and experience.
    Older Americans who choose to retire are also better set up for 
economic security than ever before. Americans have never saved more for 
retirement or had higher incomes in their golden years. Poverty among 
seniors is lower than among any other age group, and the preliminary 
data indicate that those who left the workforce during the pandemic did 
so because they can better afford to retire.
    Older workers are doing remarkably well. What older workers don't 
need are new, special-interest programs and policies cooked up in 
Washington and delivered half-baked by bureaucrats from thousands of 
miles away.
    First, let's fix what's broken.
    Government spending has stoked the highest inflation rate this 
country has seen in four decades, and it's hurting all Americans, 
including our seniors--many of whom live on fixed incomes. Government 
programs intended to care for seniors often punish those who want to 
stay connected to the workforce longer. And the threat of vaccine 
mandates continues to hang over our country, cruelly forcing Americans 
to choose between the freedom to make their own health decisions and 
their jobs.
    Ultimately, a thriving, unencumbered economy is the best way to 
allow older Americans to make the choices best suited for themselves 
and their families--whether that's spending more time with the kids and 
grandkids, volunteering in a local congregation, maintaining a long 
healthy working life, or all of the above. I look forward to hearing 
from our witnesses on how we can foster this type of prosperity. Thank 
you.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Response from Dr. Teresa Ghilarducci to Question for the Record
                      submitted by Senator Warnock
      The number of defined benefit plans has decreased over 
the last 20 years whereas the number of defined contribution plans has 
increased. What impact does placing the burden of retirement on the 
worker have on lower income workers? How does it impact workers of 
color?

    Dear Senator Warnock,

    Thank you for your question. Defined Benefit plans (DBs) were 
better for workers of color, especially in unionized situations, than 
are 401(k)-type plans. But voluntary employer pensions subsidized by 
Congress are inefficient and primarily help those at the top of the 
earnings distribution.

    The change in the dominant pension design from a DB to a Defined 
Contribution (DC) structure worsened disadvantages for workers of 
color. Workers of color have lower retirement savings because they have 
relatively lower earnings, less secure jobs, less access to 
professional managers, are more risk averse, and have less access to 
retirement plans. Also, workers of color are more likely to have 
relatives who need financial help. This means that, in a DC situation, 
a worker of color who is more likely to earn low pay can't save in a 
401(k) and thus forgoes their employer's contribution, invests instead 
in low-return safe assets, and withdraws their money when changing jobs 
or at the request of an economically fragile relative. In contrast, an 
employee with a DB plan is covered by the plan regardless of income, is 
provided with a professional diversified account, is not paid out in a 
lump sum, and does not have the option to take an early withdrawal or 
loan.

Congress Worsened the Retirement Savings Gap

    The Federal Government is responsible for much of the inequality in 
retirement wealth and the decline in DB plans. Because employers 
voluntarily provide retirement plans, the Federal tax code must try to 
incentivize savings. But it does so with deductions rather than 
refundable tax credits, meaning that government subsidies are skewed 
toward high-income earners.

    High Federal tax expenditures for retirement savings, which totaled 
over $250 billion in 2019 and will likely exceed $1.5 trillion over the 
2019-2023 period, are skewed toward high earners who are less likely to 
be workers of color. About 4 percent of workers in the bottom income 
quintile receive retirement tax benefits, compared to 78 percent in the 
top income quintile. The average subsidy from retirement tax 
expenditures stands at around $6,700 among beneficiaries in the top 
income quintile and $13,800 among the top 1 percent, compared to around 
just $400 among beneficiaries in the bottom quintile.

DB Plans Are Better Invested

    We were not in great shape when DB plans were dominant as they 
didn't cover the entire workforce and they were not always well-funded. 
But ERISA, the Federal law that regulated them, and DB plan design 
features meant that every DB dollar was invested in a well-diversified 
portfolio and the payments were in the form of lifetime income. 
Meanwhile, every DC dollar went into a self-directed account paying 
retail fees and was paid out in the form of a lump sum.

    In 1980, Congress and the Treasury Department started to promote 
and privilege 401(k)-type plans with the hope that shifting risks to 
individuals would make employers more likely to cover workers in a 
plan. It didn't work. There is lower coverage in workplace plans now 
than there was then and employees in DC plans bear coverage risk, 
investment risk, financial management risk, withdrawal risk, and the 
risk that they will spend the money before they die.

    It was thought that workers were not mobile because they were 
reluctant to change jobs and stop accruing in their DB plan. There were 
also concerns--not supported by research--that being just 5-10 years in 
a defined benefit plan would not result in good security. However, 
being in a defined contribution plan for 10 years yields completely 
different results when compared to being in a defined benefit plan for 
10 years. The DB accrual is always preserved while the DC accrual can 
leak out--and it's likely that the defined contribution accrual is not 
there for all but the highest-income workers who did not have to draw 
from the plan before retirement.

    Also, workers who join a defined benefit plan 10 to 15 years before 
their retirement can benefit greatly from a lifetime of secure income. 
For example, many women find employment in the public sector, and 
spending even a few years in a DB plan greatly increases their chance 
of not being in poverty during retirement. In contrast, DC retirement 
assets are owned by employees who bear the responsibility for their own 
financial security.

DC Plans Magnify Racial Differences in the Labor Market and in 
Retirement Wealth

    Participation in workplace retirement plans is poor for all 
workers, but employees living in households headed by a worker of color 
are less likely than their White counterparts to participate in plans. 
Only 31 percent of Hispanic or LatinX workers, 46 percent of Black 
employees, and 55 percent of White employees participate in employer-
sponsored plans. This means that the typical Black or Latino household 
has no dedicated retirement savings, even among near-retirees, in 
contrast to the typical retirement savings of $29,000 among White 
households ages 55-64. And savings of $29,000 for any near retiree 
means, in all practical terms, reliance on Social Security, for which 
the average benefit is about $1,100 per month.

    It is important to note that lower participation rates in 
retirement plans are strictly the result of lower access to retirement 
plans for workers of color than White workers, for whom access is also 
inadequate. For example, for a given level of earnings, when offered a 
plan, Black workers contribute more and more often.

Job Instability Is Particularly Bad for Holders of DC Plans

    Workers of color generally have more job insecurity, face higher 
levels of job loss, slower rates of return to work, lack of access to 
cash and credit in emergencies, and have low rates of homeownership. 
These realities do not mesh well with a patchwork system of individual 
retirement accounts that depend on employers providing coverage, 
providing a match, and investing well, and on employees not withdrawing 
funds before retirement.

    The Joint Committee on Taxation did not analyze the effect of 
leakage by race in their substantial April 2021 report on preretirement 
account leakages, which showed that employment shocks are a major cause 
of early withdrawals from retirement accounts. Someone with an 
employment shock spends more time between jobs and dipping into 
retirement savings. Someone with an employment shock also is eligible 
to participate in workplace retirement plans for fewer years since 
waiting periods are usually 1 year.

    One can't leak out of a DB plan.

Having Financially Fragile Relatives Is Bad for Holders of DC Plans

    Since workers of color are more likely to have financially fragile 
relatives, a comprehensive approach to retirement security requires 
policies that reduce financial risks across generations. But, let me be 
clear--policies that expand Social Security, raise the minimum benefit, 
create a system in which no one on Social Security is poor, and expand 
ways for people to safely save for emergencies would help workers 
regardless of skin color and subaltern status.

Accumulating Retirement Assets is Complex--A DB/DC Hybrid Would Work 
Best

    The buildup of retirement assets is a complex process that varies 
with earnings, family, job and health shocks, individual choices, and 
fluctuations in bond and stock prices. Policymakers were warned that 
the significant shifts in pension provisions to more individualistic 
and contingent frameworks would affect workers' retirement well-being 
in different ways. But we let DB plans slowly fade away with unions in 
the private sector. Policymakers continued to encourage higher 
participation rates and sounder investment choices within DC plans with 
ineffective tools: promoting financial education and boosting tax 
expenditures that mostly benefit people at the top of the income 
distribution.

    Equalizing retirement wealth by race and ethnicity in an era of 
programs that rely on voluntary and self-directed financial 
accumulation for retirement must consider the different realities that 
workers of colors face compared to Whites. There are many risks borne 
primarily by workers of color face that impede their chances of 
accumulating retirement savings, even with the same education level and 
concern about retirement security.

    We need a way to improve retirement income for low-and middle-
income elderly people, who increasingly risk poverty in old age as 
pension systems collapse and 401(k) plans fail.

    A hybrid plan would be the best. Many workers change jobs so a 
defined benefit plan linked to an employer may lead to a lot of gaps in 
coverage. But self-directed and voluntary participation in plans 
disadvantage people who aren't good investors and are likely to have an 
employer who doesn't offer a plan. I have proposed a plan that gets 
most people into the hybrid Federal employees' Thrift Savings Plan, 
with some kind of government match. This is especially good for those 
in the bottom half of the income distribution.

    Federal employees, workers in large union companies, and State and 
local workers are among the last group of workers with a reliable 
pension plan. If you work for the U.S. Government, you are 
automatically enrolled in the Thrift Savings Plan. Five percent of your 
pay goes into the plan, matched by the government. The assets are 
invested on a pooled basis in one of five plan options, and the 
management fees are almost nonexistent--about 0.04 percent compared to 
around 1 percent for conventional individual retirement accounts.

    If others could join the Thrift Savings Plan, with government 
matching contributions, nearly everyone could have retirement accounts 
well into six figures by the time they hit retirement age.

    My co-author on this plan is Kevin Hassett, a well-established 
conservative economist who chaired for President Donald Trump's Council 
of Economic Advisers.

    Even with the incentive of a government match, most working people 
simply have no spare money to save. Therefore, the plan needs the 
government to reimburse individual contributions to these plans, using 
refundable tax credits, for people with incomes up to $40,000.

References:

Racial Gaps in Retirement Wealth and Retirement Risk

    Oral and Written Testimony of Teresa Ghilarducci. ``Where Typical 
Americans Have Their Wealth.'' United States Senate Committee on 
Banking, Housing, And Urban Affairs, Hearing title: ``Does Wall Street 
Always Win? GameStop, Robinhood, and Retail Investors'' (March 9, 2021)

    Ghilarducci, T., Radpour, S., and Webb, A. ``Social Security 
Reduces Retirement Wealth Inequality.'' Schwartz Center for Economic 
Policy Analysis and Department of Economics, The New School for Social 
Research, Policy Note Series (2020).

    Munnell, A., Hou, W. and Sanzenbacher. G. ``Trends in Retirement 
Security by Race/Ethnicity.'' Center for Retirement Research at Boston 
College (2018).

    Survey of Consumer Finances. Board of Governors of the Federal 
Reserve System. (Various Years)

    Bhutta, Neil, Andrew C. Chang, Lisa J. Dettling, and Joanne W. Hsu. 
``Disparities in Wealth by Race and Ethnicity in the 2019 Survey of 
Consumer Finances.'' FEDS Notes. Washington: Board of Governors of the 
Federal Reserve System, (September 28, 2020).

    Rhee, Nari. ``Race and Retirement Insecurity in the United 
States.'' National Institute on Retirement Security (2013).

    Siavash Radpour and Teresa Ghilarducci. ``Gaps in Retirement 
Savings Based on Race, Ethnicity and Gender.'' Advisory Council on 
Employee Welfare and Pension Benefit Plans (August 26, 2021)

Congress Helps Whites and High-Income People Accumulate Retirement 
Wealth Through the Tax Code

    Ghilarducci, Teresa. ``Future retirement income security needs 
defined benefit pensions.'' Center for American Progress (March 2006).

    Congressional Budget Office. ``The Distribution of Major Tax 
Expenditures in 2019.'' (October 27, 2021)

Disappearing DB Plans

    Barbara A. Butrica, Howard M. Iams, Karen E. Smith, and Eric J. 
Toder. ``The Disappearing Defined Benefit Pension and Its Potential 
Impact on the Retirement Incomes of Baby Boomers.'' Social Security 
Bulletin, Vol. 69, No. 3, (2009).

Racial Gaps in Job Security

    Ajilore, O. ``The Persistent Black-White Unemployment Gap Is Built 
Into the Labor Market.'' Center for American Progress. (2020).

Family Can Hurt or Help Wealth

    U.S. Congressional Joint Committee on Taxation (JCT) ``Estimating 
Leakage from Retirement Savings Accounts.'' (April 2021).

    Dal Borgo, M. ``Ethnic and racial disparities in saving behavior.'' 
Journal of Economic Inequality 17, 253-283, (2019).

    Park, S., Wiemers, E., and Seltzer, J. ``The Family Safety Net of 
Black and White Multigenerational Families.'' Population and 
Development Review. Vol. 45, No. 2: 351-378, (2019).

    Toney, Jermaine and Hamilton, Darrick, ``Economic Insecurity in the 
Family Tree and the Racial Wealth Gap.'' (May 27, 2021).

    Ghilarducci, Teresa. ``How The Burdens Of Family Elder Care Widen 
Socioeconomic Inequalities'' Forbes, Dec 21, 2021.

    Ghilarducci, Teresa and Hassett, Kevin. ``What If Low-Income 
American Workers Had Access to Wealth Building Vehicles Like the 
Federal Employees' Thrift Savings Plan?'' (March 2021)

    Kuttner, Robert. ``Retirement Income for the Poor.'' American 
Prospect, (April 19, 2021)

    Ghilarducci, Teresa, ``How To Fix The Retirement Crisis,'' Schwartz 
Center for Economic Policy Analysis and Department of Economics, The 
New School for Social Research.
                               __________
       Response from Ms. Jocelyn Frye to Question for the Record
                      submitted by Senator Warnock
    Dear Representative Beyer,

    Thank you for convening the Joint Economic Committee's February 10, 
2022 hearing, Building a Better Labor Market: Empowering Older Workers 
for a Stronger Economy. It was my pleasure to testify before the 
committee. This letter is in response to a question for the record 
submitted by Senator Reverend Raphael Warnock.

      Some studies have shown that as income increases, Black 
families more likely to provide financial assistance to friends and 
family to cover basic expenses when compared to White families of 
similar income. How does the kin networks and social dynamics of 
different demographic groups affect the employment and retirement of 
their older workers?

    The lack of comprehensive care supports for workers means that many 
older workers are on their own when taking on caregiving roles for and 
making economic contributions to their families, risking longer term 
harm to older workers' employment stability and economic security. Kin 
networks can play an important role in this environment and are often 
textured by many intersecting factors including economic circumstances, 
personal and community histories, health and caregiving needs, and 
more. In addition, the pandemic has deepened and reshaped families' 
care needs, with women of color especially likely to experience 
increased health and family caregiving challenges and disruptions to 
their employment.\1\ For many Black families, kin networks are crucial 
to their overall stability, frequently filling in the gaps left by the 
absence of strong policy interventions and responding to the diverse 
needs of extended and chosen family members. Identifying concrete 
policy solutions to address the care needs of families, especially as 
workers get older, is crucial for all families but particularly for 
many families of color disproportionately living on the economic 
margins.
---------------------------------------------------------------------------
    \1\ Mason, J., & Molina Acosta, P. (2021, March). A Racially Just 
Recovery Demands Paid Family and Medical Leave. Retrieved 23 February 
2022, from National Partnership for Women & Families website: https://
www.nationalpartnership.org/our-work/economic-justice/reports/called-
to-care-a-racially-just-demands-paid-family-and-medical-leave.html.

    Many Black families have a network of extended family that they 
rely on in their everyday lives. For example, a 2021 survey found that 
33 percent of Black adults and 45 percent of Hispanic adults were 
living in a multigenerational household, compared with 19 percent of 
white adults.\2\ Child care and elder care needs were each cited by 
one-third of adults as a reason for living in a multigenerational 
household. (Pre-pandemic data estimated nearly three in ten Asian and 
Pacific Islanders lived in multigenerational households.) \3\ These 
adults are especially likely to have family caregiving needs, and to be 
members of the so-called ``sandwich'' generation, caring for children 
and adult family members at the same time. Pre-pandemic Census data 
show that an estimated 2.7 million children--nearly one-quarter of whom 
are Black--live with grandparents who are providing most or all of 
their basic care.\4\ With more than 140,000 children having lost a 
caregiver due to the pandemic,\5\ it is not yet known how grandparent 
care may have increased. Workers of color who are LGBTQ and/or disabled 
are also more likely to need to care for, or need care from, chosen 
family members.\6\
---------------------------------------------------------------------------
    \2\ Generations United. (2021, April). Family Matters: 
Multigenerational Living Is on the Rise and Here to Stay. Retrieved 23 
February 2022, from https://www.gu.org/app/uploads/2021/04/21-MG-
Family-Report-WEB.pdf.
    \3\ Cohn, D., & Passel, J. S. (2018, April 5). A record 64 million 
Americans live in multigenerational households. Retrieved 23 February 
2022, from Pew Research Center website: https://www.pewresearch.org/
fact-tank/2018/04/05/a-record-64-million-americans-live-in-
multigenerational-households/.
    \4\ Advisory Council to Support Grandparents Raising Grandchildren. 
(2021, November 16). Supporting Grandparents Raising Grandchildren 
(SRRG) Act: Initial Report to Congress. Retrieved 25 February 2022, 
from Administration for Community Living website: https://acl.gov/
sites/default/files/RAISE_SGRG/SGRG-InitialReportToCongress_2021-11-
16.pdf.
    \5\ National Institutes of Health. (2021, October 7). What 
opportunities and challenges do you envision for the economic justice 
team's policy advocacy in the current political landscape, and how 
would you navigate these opportunities and challenges? Retrieved 25 
February 2022, from What opportunities and challenges do you envision 
for the economic justice team's policy advocacy in the current 
political landscape, and how would you navigate these opportunities and 
challenges?
    \6\ Mahowald, L., & Boesch, D. (2021, February 16). Making the Case 
for Chosen Family in Paid Family and Medical Leave Policies. Retrieved 
23 February 2022, from Center for American Progress website: https://
www.americanprogress.org/article/making-case-chosen-family-paid-family-
medical-leave-policies/.

    Many working people and their families to turn to their kin 
networks when other sources of support fall short. But the data suggest 
that such economic transfers tend to function more often as a safety 
net for lower-wealth and lower-income families, which are 
disproportionately families of color,\7\ and a ladder for wealthier 
families. About one-quarter of households (26 percent) report providing 
financial assistance to someone outside their household in the previous 
year, and about one in eight (12 percent) receiving financial 
assistance from outside their household.\8\ Black households were more 
likely than white households to give financial support, and among those 
giving financial support, both Black and Hispanic households were more 
likely to say it caused financial strain than white households. Low-
income households are most likely to receive assistance to pay regular 
expenses, while high-income households are more likely to receive kinds 
of assistance that build wealth and income, such as help buying a house 
or paying for educational expenses. Black and Hispanic households also 
tend to receive lower amounts in transfers.\9\ Over a lifetime, such 
differences are a significant contributor to racial wealth gaps.
---------------------------------------------------------------------------
    \7\ Kent, A. H., Ricketts, L. (2021, January 5). Wealth Gaps 
between White, Black and Hispanic Families in 2019. Retrieved 18 
February 2022, from https://www.stlouisfed.org/on-the-economy/2021/
january/wealth-gaps-white-black-Hispanic-families-2019; National 
Partnership for Women & Families. (2021, June). Making a Fortune for 
Others: Causes and Consequences of the Black Wealth Gap. Retrieved 18 
February 2022, from https://www.nationalpartnership.org/our-work/
resources/economic-justice/fair-pay/causes-and-consequences-of-black-
wealth-gap.pdf.
    \8\ Pew Charitable Trusts. (2016, March). Extended Family Support 
and Household Balance Sheets. Retrieved 18 February 2022, from https://
www.pewtrusts.org/-/media/assets/2016/03/fsm_kinshipbrief.pdf.
    \9\ McKernan, S., Ratcliffe, C., Simms, M., Zhang, S. (2014, June). 
Do racial disparities in private transfers help explain the racial 
wealth gap? New evidence from longitudinal data. Demography, 51(3), 
949-974. doi: 10.1007/s13524-014-0296-7.

    The impacts of caregiving on caregivers' employment and financial 
security are significant, yet access to the workplace supports 
necessary for caregivers is rare and uneven. In the private sector, 
about one in three workers does not have access to a retirement plan at 
work, nearly one in four does not have paid sick days, three in ten are 
not offered health insurance, nearly six in ten do not have paid 
medical leave through employer-provided temporary disability insurance, 
and nearly eight in ten do not have paid family leave. There are 
significant racial and ethnic inequities in access to these basic 
supports, and access is especially rare among the lowest-paid 
workers.\10\ In other words, those with the least extra income to save 
for an emergency--much less for retirement--are also least likely to 
have essential protections and supports to maintain their income and 
employment when a family crisis arises.
---------------------------------------------------------------------------
    \10\ U.S. Bureau of Labor Statistics. (2019, August). Access to and 
Use of Leave (Table 2). Retrieved 23 February 2022, from https://
www.bls.gov/news.release/leave.t02.htm; Artiga, S., Hill, L., Orgera. 
K., & Damico, A. (2021, July 16). Health Coverage by Race and 
Ethnicity, 2010-2019. Retrieved 23 February 2022, from Kaiser Family 
Foundation website: https://www.kff.org/racial-equity-and-health-
policy/issue-brief/health-coverage-by-race-and-ethnicity/; Rhee, N. 
(2013, December). Race and Retirement Insecurity in the United States 
(Figure 1). Retrieved 23 February 2022, from National Institute on 
Retirement Security website: https://www.shrm.org/ResourcesAndTools/hr-
topics/employee-relations/Documents/
race_and_retirement_insecurity_final.pdf.

    Research drawn from an invaluable survey conducted by AARP and the 
National Alliance of Caregiving reveals that six in ten family 
caregivers report at least one significant impact on their employment, 
including cutting days short or taking time off (53 percent), reducing 
work hours (15 percent), turning down a promotion (7 percent) or even 
giving up working (5 percent) or retiring early (4 percent).\11\ About 
one in five caregivers report high financial strain related to 
caregiving, and nearly half report at least one financial impact, 
including stopping saving money (28 percent), taking on more debt (23 
percent) or using up short-term savings (22 percent). These negative 
impacts were higher than average among caregivers with household 
incomes under $50,000 and caregivers age 50 to 64.\12\
---------------------------------------------------------------------------
    \11\ AARP and National Alliance for Caregiving. (2020, May). 
Caregiving in the U.S.: 2020 Report (Figure 69). Retrieved 23 February 
2022, from https://www.caregiving.org/wp-content/uploads/2021/01/full-
report-caregiving-in-the-united-states-01-21.pdf.
    \12\ Ibid. (pp. 57-59).

    In terms of race and ethnicity, the survey data show that 
caregivers are similar to the population overall: About six in ten are 
white, 14 percent are Black, 17 percent Hispanic, and 5 percent Asian 
American. But the limited data available indicates that their 
experiences are not all alike. Caregivers of color tend to be younger 
on average, and a larger share of Black and Hispanic caregivers have 
incomes below $50,000, compared to white and Asian American 
caregivers.\13\ Black and Hispanic caregivers also report more 
financial impacts of caregiving on average.\14\ More data is needed, 
for example, to better understand the experience of Native American 
caregivers and other caregiving experiences within communities of 
color. Greater investments in comprehensive, disaggregated data, 
collected more regularly would help policymakers better understand 
caregivers' experiences and needs, and which communities are facing the 
most acute challenges.
---------------------------------------------------------------------------
    \13\ Ibid. (Figures 87 and 88)
    \14\ Ibid. (Figure 61).

    To support the employment and secure retirements of older women 
workers of color, and to help them strengthen their families and kin 
networks, we must invest in the policies and supports they need. This 
includes investing in a robust and comprehensive care infrastructure, 
with inclusive national paid family and medical leave, affordable, 
high-quality child care and home- and community-based services; 
improving job quality by passing the Healthy Families Act, Raise the 
Wage Act, Schedules that Work Act and PRO Act; and strengthening and 
supporting robust enforcement of labor and civil rights laws, including 
passing the Pregnant Workers Fairness Act and Paycheck Fairness Act, 
significantly increasing funding for the Equal Employment Opportunity 
Commission, Department of Labor and Department of Justice to support 
increased enforcement of civil rights and employment discrimination 
laws. This is also an important and timely moment to empower a 
commission or interagency working group to further investigate the 
factors holding back women in our economy, especially older women, 
develop a robust evidence base for future policy development, and 
recommend concrete action steps that should be taken in the short- and 
long-term to improve employment opportunities for older women workers.
  

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