For many older workers, a new job comes with a pay cut

Unemployed businessman
Ghislain & Marie David de Lossy | Getty Images

With nearly a quarter million new jobs filled each month, it's a great time for most people to look for work.

Unless you're older and have been out of work for a while.

In that case, you can expect to spend a lot more time finding a job. And you can expect to earn less when you find one.

Those are some of the conclusions from a survey of long-term jobless works by AARP, which found that half of older workers—those between 45 and 70 years old—who have been out of work over the past five years are still not working.

"As the economy continues to recover and the unemployment rate falls, there are still far too many people struggling," said Debra Whitman, chief public policy officer for the AARP. "Many Americans want to work as long as possible but our survey confirms that, once unemployed, it can take a long time for older workers to find a quality job."

Some older workers give up. About a quarter of the long-term jobless in the survey said they've stopped looking and dropped out of the workforce altogether.

Many are taking pay cuts to get back to work. Of those in the survey who said they'd found work, half said they are earning less than in their last job.

But some older workers reported that even as their income went down, their job satisfaction went up. About half reported better working conditions in their new jobs.

"When they got re-employed, many people seemed to think their job quality was better," said Dean Baker, an economist and co-director of the Center for Economic and Policy Research. "They seem to like their jobs but they're not getting paid for them."

Pay cuts were more common the longer workers were out of a job: Nearly 60 percent of those out of work for six months or more took a pay cut to go back to work, compared with 41 percent who were jobless for less than six months.

Finding work was harder for those who took a break before looking and those who remained jobless for longer periods. Researchers discussing the results said that may be partly because of the emotional and psychological toll of long-term unemployment.

"Essentially being a year unemployed means a year of being told, 'No, no, no, no, no,' " said Ofer Sharone, a career development professor at the MIT Sloan School of Management. "The toll of that 'no' is particularly difficult because our hiring system is highly personalized."

401(k) a failure?
401(k) a failure?   

The roughly 2,500 people surveyed by AARP also reported that age discrimination presented a significant hurdle. Half said that age discrimination hurt their chances of getting a job, more than their unemployed status (25 percent), race (13 percent), sex (8 percent) or sexual orientation (4 percent).

"If you apply online, what you overwhelmingly get is a black hole," Sharone said. "This is especially true for older, long-term unemployed workers. They get screened out systematically."