Recent estimates indicate that as artificial intelligence evolves, a significant number of white-collar jobs—perhaps even half—could vanish. But how are older white-collar workers handling this shift? In light of prior economic downturns, such as the Great Recession in 2008, we’ve been looking into the experiences of baby boomers who faced similar job losses.
Our recent publication, “American Idol: Unemployment of Late Caregivers in the Neoliberal Era,” features interviews with 62 baby boomers impacted by another crisis in the job market. Back then, many expressed sentiments like, “I’m too young to retire, but too old to start over.” Interestingly, Gen Xers today find themselves facing comparable hurdles.
The financial aftermath of the 2008 layoffs, however, varied greatly. Some boomers had what we might call “hard falls,” facing long-term unemployment and having to rely on food pantries or government assistance to make ends meet. Others experienced a “soft landing,” enduring relatively minor economic effects.
Several factors contributed to these soft landings. Many interviewees enjoyed years of job stability, which translated into lucrative retirement packages. Others had access to defined-benefit pension plans that provided a reliable income stream, allowing for early retirement, albeit under unexpected circumstances. Financial support from spouses or affluent parents also played a significant role.
It’s worth noting that evidence suggests Gen Xers are generally more vulnerable to financial difficulties than their baby boomer counterparts. This gap suggests a need for structural changes, potentially including a universal basic income.
Initially, during their entry into the workforce, boomers were rewarded with job security and steady finances. In contrast, today’s workers are often encouraged to seek new opportunities, which can fracture their retirement benefits. Frequent changes in employment lead to reduced retirement income, and while many soft landers had pensions, Gen Xers entered a world where those were largely replaced by 401(k) plans.
With these plans, employees must contribute a portion of their earnings, increasing risk due to market fluctuations and personal investment choices. Moreover, low-wage earners often lack employer-supported retirement options, which complicates their financial stability.
As a result, Gen X’s collective net worth is significantly lower than that of boomers, partly due to high debt levels. This reduces their likelihood of retiring comfortably, compounded by lower homeownership rates that prevent them from reaping long-term property benefits.
Additionally, there’s an increasing demographic of older individuals living alone, resulting in financial disadvantages when faced with job loss. The absence of spousal support often means that a layoff can have devastating consequences.
While there’s a possibility that AI may not drastically lead to widespread job loss, the reality is that many workers—including around 900,000 in the private sector and 300,000 in federal roles—have already lost their jobs. White-collar positions are under heavy threat.
Older workers might need to consider safeguarding their finances during these uncertain times, as our findings point out. Preparing for prolonged unemployment matches seems daunting, especially with age discrimination lingering in hiring practices.
Targeted education and training initiatives can assist unemployed Gen Xers in sectors expected to see job growth. Furthermore, the development of a universal basic income program deserves our attention, especially since many may still be too young to collect Social Security benefits. Notably, similar experiments in other nations have shown promising results, enhancing both happiness and employment opportunities.
In various cities across the U.S., there are already trials of limited basic income programs, offering financial support with minimal strings attached. This could be crucial for white-collar Gen Xers in their job search—potentially leading to softer financial transitions or, conversely, harsher economic downturns.
