Even when they do find new jobs, mature workers often make significantly less money than they did before. Schmitt found that 38 percent of older men and 44 percent of older women take cuts of at least 20 percent from what they previously earned. Many find themselves caught in a conundrum—they are unable to retire but lack the time it takes to start over again. "There's a line that steelworkers use," says John Russo, codirector of the Center for Working-Class Studies at Ohio's Youngstown State University: " 'We're too old to work and too young to die.' "
For 30 years, Virginia Dinah Russell, 63, worked at a textile mill in Kannapolis, North Carolina. Born and raised in that century-old town, where everyone's fortunes were somehow tied to textile manufacturing, she operated machinery to produce towels, never doubting the security the factory gave her. "We were thinking that mill was going to be there forever," she says. But in 2003 her employer, Pillowtex, declared bankruptcy and shut down all its plants, throwing 4,800 North Carolinians out of work—the largest mass layoff in the state's history.
For two years Russell applied for different jobs, but the market was flooded with Pillowtex workers. She was eligible to get federal retraining money but felt it was too late to start in another career. "I worked in textiles all my life," she says. "That's all I knew." Robert Trumble, director of the Virginia Labor Studies Center at Virginia Commonwealth University, says Russell's reaction is common for many older workers. "When you're young and you lose a job, it makes sense to retrain and work yourself up," he says. "It makes less sense if you have only a few years left before retirement."
To pay the bills, Russell dipped into her 401(k) plan. She also occasionally accepted money from her daughter. When she turned 62, she applied for an early—and consequently reduced—Social Security benefit. And she began collecting a small Pillowtex pension.
Today Russell gets by, but barely. At times she cuts back on food and other necessities, and she depends on a free clinic for her diabetes and blood-pressure medications. "If I hadn't had to touch my 401(k), I would have had pretty good savings," she says. Her plans to see California and visit a cousin in Texas, she says, will have to wait.
It's not just finances that take a hit when older workers lose their jobs. Their health suffers, too. Bill Gallo, a research scientist at the Yale University School of Medicine, has extensively studied displaced workers between 51 and 61. "We've discovered that people who lose their jobs are more likely to have higher rates of depressive symptoms," he says. They are also twice as likely to suffer heart attacks and strokes.
Till von Wachter, an assistant professor of economics at Columbia University, and Daniel Sullivan, chief economist of the Federal Reserve Bank of Chicago, have examined the life spans of thousands of employees who experienced mass layoffs. Their research shows that laid-off workers have a 15 to 20 percent higher death rate in the two decades following their dismissal. Employees in traditionally high-wage sectors, such as manufacturing, are particularly vulnerable. "Workers who have the highest losses of earnings are also the ones who experience the largest increases in mortality," says von Wachter.