Promoting Economic Advancement for Older Women in the Workplace

This report contains a correction.

Despite recent gains in labor force participation among women ages 55 and older,¹ obstacles remain to their economic advancement. The ability to advance one’s career toward increasingly higher-paid work and better conditions, either by switching jobs or advancing within one’s current job, is an important personal and policy goal not subject to an arbitrary expiration date. Women of all ages deserve opportunities to improve their economic circumstances, including career advancement.

Financial security at older ages not only makes women materially more secure, but also enhances health² and reduces the need for public support. But rather than find a welcoming path forward, women often find their mid- and late-career prospects hindered by long-standing inequities, including occupational segregation; discrimination based on gender, age, race, and disability; lack of access to training, upskilling, or re-skilling; and caregiving responsibilities. New analysis by the Center for American Progress shows the significant ways that women’s experiences in the labor market over their life course differ from men’s. Women’s earnings peak at earlier ages and decline more with age than men’s. Older women are the least likely group of workers to seek out or obtain new jobs, raises, or promotions, even amid a strong labor market. And more than 1 in 3* older women work in low-wage jobs, with the likelihood of low-wage work growing in late career.

Given the U.S. economy’s growing reliance on older women workers,³ targeted investments in workforce development, measures to combat age discrimination, and a higher minimum wage are urgently needed to advance equity, ensure a stable labor market, and grow the economy.

Earnings trajectories over a worker’s life course differ by gender, reflecting disparities in how women’s and men’s work lives unfold over time. Women, at any age, tend to earn less than men, even when restricting the comparison only to those working full time. The gender wage gap widens as people age and progress through their careers.⁴

Earnings for full-time women workers tend to peak at earlier ages and stagnate or decline more rapidly with age compared with those for men. This pattern can be explained to some extent by young mothers working slightly fewer hours than women without children or men.⁵ But over time, the more significant drivers appear to be women’s overrepresentation in occupations with short career ladders and underrepresentation at higher rungs in career ladders where they do exist.⁶ A recent study of the gender promotion gap indicates the proverbial glass ceiling remains firmly intact, with consequences for women’s career advancement and earnings.⁷

Median earnings for full-time women are highest among those in their early- to mid-40s and fall substantially at older ages: Women in their mid- to late-50s have earnings 5.6 percent lower than peak mid-career levels, and in their early- to mid-60s, women’s earnings are 8.0 percent below peak. By contrast, men’s earnings peak later—in the mid- to late-40s—and remain at that peak level for men about a decade older. When men’s earnings eventually begin to decline with age, they do so much more slowly: Earnings for men in their mid- to late-50s are just 2.7 percent below their peak, and in the early- to mid-60s, they are 3.9 percent lower.⁸

The stagnation or decline in earnings that many women experience at mid-career and beyond undercuts their economic well-being at older ages because the damage it does to financial security is cumulative over time. Lower earnings during one’s working years translate into lower Social Security benefits, less ability to save for retirement, and, ultimately, higher risks of poverty and material hardships in old age.⁹ Thus, career advancement as women age is a pressing concern, as it is one way to ward off the economic risks they face.

Given the labor market’s strength, workers looking to advance their economic situations have more options than in the past. Those looking to move ahead economically might seek out raises or promotions in their current job; find a new, better compensated job with a new employer; upgrade their skills via training; or some combination of these options. But older women appear to have a harder time accessing these various avenues to career mobility.

New and troubling data suggest that older women are far less likely to report seeking out promotions, raises, or new employment as compared with younger women or men of any age. Center for American Progress analysis of the Board of Governors of the Federal Reserve System’s 2022 Survey of Household Economics and Decisionmaking indicates that just 1 in 4 women ages 55 and older (25.2 percent) asked for a raise, received a raise, applied for a job, or started a new job in the prior year, despite highly favorable labor market conditions, where employers were competing for talent to fill record high job vacancies.¹⁰ By comparison, 28.8 percent of men ages 55 and older and large majorities of those ages 25 to 54—62.9 percent of women and 68.7 percent of men—reported asking for or receiving a raise, applying for a job, or starting a new job during the same period. But before concluding that older women need to get better at “leaning in,” it is important to note that despite only a 1 percentage-point gap between older men and older women in seeking out new jobs, raises, or promotions, the gender gap in receiving a raise or promotion was about 3 percentage points. In other words, these data, together with evidence on the conditions older women face in the labor market, suggest they face stubborn structural impediments in advancing their careers.

Occupational segregation

Gender-based occupational segregation occurs when individuals are sorted into jobs by sex, resulting in women being overrepresented in a narrow range of often low-paid jobs. This clustering contributes to the gender wage gap and undermines women’s economic security. Older women experience occupational segregation to a greater degree than younger women,¹¹ and this is one reason why the gender wage gap is the most significant among older women.¹²

Research finds that low-wage work is sticky, or difficult for workers to leave, and has limited development opportunities—altogether detracting from upward advancement.¹³ CAP analysis of the prevalence of low-wage work demonstrates that low wages are a problem for large shares of women across the age spectrum and that older age is associated with a heightened risk of low-wage work for women that older men do not share to the same degree. More than one-third (35.1 percent) of women ages 55 and older earned low wages, defined as $17.37 per hour or less.¹⁴ Although this is far lower than the 73.6 percent share of young women (ages 16 to 24) who earn low wages, it is notably higher than the proportion of women ages 25 to 54 who earn low wages (28.9 percent). By comparison, low wages are less common among men at any age. The youngest men are nearly 10 percentage points less likely than their female peers to earn low wages (63.8 percent versus 73.6 percent), a gender gap that only grows with age. And unlike the case for older women, the share of older men earning low wages (21.2 percent) is not appreciably higher than the share of men ages 25 to 54 (20.5 percent) who do, suggesting that men achieve greater and more durable wage gains over time. Low wages are typical for older women of all races and ethnicities, but more so for many women of color ages 55 and up: 41.2 percent of older Black women and 52.0 percent of older Hispanic women earn low wages, as compared with 31.2 percent of older white, non-Hispanic women and just 16.9 percent of older white, non-Hispanic men.*¹⁵

Occupational segregation can also crowd older women into jobs characterized by less career mobility, as measured by the likelihood that workers move to higher-paying jobs when leaving the occupation, compared with others at a similar wage level. To illustrate, consider seven job clusters where women ages 55 and older work in large numbers: office support; retail; teaching and child care; nursing; direct care work, defined by the U.S. Bureau of Labor Statistics as nursing, psychiatric, home health, and personal care aides; food preparation/service; and cleaning jobs. These seven clusters alone employed more than 4 in 10 women (42.9 percent) in this age group in 2022. Even more striking is the degree to which, except nursing, these occupations tend to pay low wages (retail, food preparation/service, child care), have limited upward wage mobility (office work, teaching), or both (direct care and cleaning occupations). This means that for many older women, seeking out new employment may not a reliable way to boost earnings even in a tight labor market, limiting their economic security and career advancement.

Age discrimination

Age discrimination involves bias against a job applicant or employee because of their age. The Age Discrimination in Employment Act (ADEA) prohibits age discrimination and harassment against individuals ages 40 and older in hiring, firing, pay, job assignments, promotions, layoffs, training, benefits, or other conditions of employment.¹⁶ Although illegal, age discrimination remains pervasive¹⁷ and has outsize impacts on women.¹⁸ Age discrimination limits older women’s career advancement and often intersects with other forms of discrimination based on gender, race, disability, and more.¹⁹

Older women are particularly aware of the pervasiveness of age discrimination.²⁰ They therefore may face a different risk-reward trade-off than younger workers when it comes to seeking promotions, asking for a raise, or looking for and finding new jobs as ways to boost their pay. Polling from AARP exposes how concerns about age discrimination specifically impede older workers from seeking out new employment. Fully half of all older workers with annual household incomes of less than $50,000 reported that they felt unable to change jobs because of their age. The problem hits Black, Latino/Hispanic, and Asian workers even harder than white workers; half of older African Americans of any income level, 44 percent of older Hispanic workers, 43 percent of older Asian Americans, and 42 percent of older white workers feel trapped in their present job because of age discrimination.²¹

The phenomenon of discrimination-fueled job lock reflects workers’ awareness that although job switching can provide opportunities for career advancement, it can also entail risk. Job changes do not always pan out. When they don’t, workers can find themselves back in the labor market searching for a new position or even facing unemployment, which is particularly hazardous for older workers. Data on displaced workers²² show that despite the strong post-pandemic labor market, older workers, including women, have experienced greater difficulty becoming reemployed and are at higher risk than younger workers of dropping out of the labor force entirely after losing a job. In January 2022, just 62.3 percent of women ages 55 to 64 and 30.4 percent of women 65 and older were successfully reemployed after losing a long-term job, compared with reemployment rates of 67.8 percent for women and 75.9 percent for men ages 25 to 54.²³ This reality may lead many women to conclude that leaving a job to seek greener pastures, even when possible, may not be worth the risk if things do not work out.²⁴

Moreover, reemployment rates do not capture the issue of job quality for those who do regain employment. As noted previously, large shares of older women earn low wages, making them more susceptible to working paycheck to paycheck. Because women have fewer savings²⁵ and less access to unemployment benefits due to more frequent part-time work, caregiving responsibilities, or following a spouse who moves for a new job,²⁶ many lack the financial backstop that would enable them to engage in retraining after becoming unemployed, or even to undergo a more rigorous and lengthy search to find the best job offer. As a result, even those who can secure new positions may not achieve greater economic advancement. Women breadwinners with family members depending on their earnings may face more pressure to accept the first job offer that comes along, even if it means there is limited or no upward potential.²⁷

Impediments to career advancement mean that older women have fewer opportunities to contribute to the nation’s productivity gains. When older women get stuck in jobs that are not the best fit for their skills and experience, potential contributions to economic growth go unrealized.

By impeding productivity and labor market mobility, job lock and other impacts of age discrimination pose costs to individuals and the economy to the tune of more than $850 billion in 2018.²⁸ Thus, any plan that seeks to grow the economy needs to prioritize combating age discrimination.

Access to training, upskilling, and re-skilling

Older women, as well as men, frequently desire training to upgrade their skills and boost their earnings, but often, they are not offered these opportunities equitably. Whether these disparities stem from inaccurate perceptions about the willingness or ability of older women to participate in training or from barriers that impede access to training, employers and policymakers need to address such disparities, and not for reasons of equity alone. Over the next decade, 42 percent of the growth of the labor force will come from individuals ages 55 and older, with most of this growth coming from women in this age group.²⁹

Contrary to age-biased stereotypes, polling indicates that large majorities of workers, regardless of age, prioritize professional development and training offerings when accepting a new job. But according to a 2021 survey, smaller shares of Baby Boomers (those born 1946 to 1964) and members of Generation X (born 1965 to 1980) report receiving the skills training needed to maintain or grow their careers from their employers, as compared with Millennials (born 1981 to 1996) and Generation Z (born after 1996).³⁰ The issue of access also extends to the U.S. public workforce investment system, where participation in training also declines with age.³¹ Part of the reason may be that state workforce agencies are disincentivized to serve older workers, because of performance evaluation metrics that emphasize rapid reemployment.³² As discussed, reemployment may not be achievable by older workers on the same basis as younger workers, due to the prevalence of age discrimination in the labor market and other factors.³³

Caregiving

Another factor affecting access to training, upskilling, and promotion is the unequal caregiving and family responsibilities that older women bear, far beyond what are typically thought of as the child-bearing and child-rearing years. Women ages 55 and older may be caring for children, grandchildren, or another adult.³⁴ They are five times more likely than men of the same age to have caregiving affect their employment status.³⁵ Women ages 55 to 64 spend twice the number of hours providing care for family members or others compared with similarly aged men, and for women ages 65 to 74, the ratio is about 1 1/2 times. At the same time, older men enjoy about 10 percent more leisure hours as compared with older women.³⁶ Because caregiving remains a central feature of women’s lives as they age, they may not be in the position to pursue training, upskilling, promotion, or new employment opportunities on an equitable basis without additional supports.

These trends are disappointing not only because they harm women’s financial security, but also because older women are becoming an increasingly important segment of the labor market, so barriers to their career mobility are a problem for the economy. When older women are mired in jobs with few prospects for growing their human capital and productivity, they are not being deployed to their full productive potential in the labor market. Policymakers need to strengthen protections against age discrimination in hiring and advancement, as well as consider the specific needs of older women in workforce development policy, creating targeted supports that address the disparate burdens older women face in achieving employment or reemployment. Additionally, raising the federal minimum wage would provide an immediate boost to the many older women currently working in low-wage jobs.

Strengthen age discrimination protections

Despite the legal protections of the ADEA, age bias remains rampant in the workforce, with more than 3 in 5 older workers (64 percent) believing workers face age discrimination in today’s workplace and 2 in 5 (41 percent) reporting experiencing ageism at work in the past three years.³⁷

In addition, the U.S. Supreme Court exacerbated the difficulties faced by workers experiencing age discrimination with its 2009 decision in Gross v. FBL Financial Services, whereby workers claiming age discrimination now must meet a higher standard of proof in making those claims, as compared with those who experience discrimination based on other protected classes under Title VII of the Civil Rights Act.³⁸ This higher burden requires employees to prove that age was the deciding factor in the adverse action they experienced, such as a layoff. In contrast, prior to Gross, workers could successfully prove discrimination by showing that age was at least one of the motivating factors, which made it easier for individuals to make successful claims in court when they are harmed by discrimination. The bipartisan Protecting Older Workers Against Discrimination Act would help by restoring the ADEA to the pre-Gross standard, once again allowing for mixed-motive claims and giving victims of age discrimination equal footing to challenge unfair treatment.³⁹

Current law may also inadequately protect older individuals when it comes to hiring. Two federal circuit court decisions over the past five years—Villareal v. RJ Reynolds Tobacco Co. and Kleber v. CareFusion Corp.—ruled that some provisions of the ADEA applied only to current employees, not job applicants.⁴⁰ The Protecting Older Job Applicants Act would clarify that the ADEA explicitly includes job applicants—an important step considering how important job changes are to economic advancement as an avenue for mobility.⁴¹

Improve and support workforce development efforts

Research has established that educational attainment is an important predictor of economic mobility.⁴² Because older women are much less likely than younger individuals to hold college degrees,⁴³ they face a heightened risk of falling into so-called dead-end jobs with little opportunity for decent pay or career advancement. But increased college degree attainment for older workers may not be the most effective solution, given the cost of higher education and the existing growth in student debt burdens for older adults.⁴⁴ Rather, solutions such as skill-based hiring, where there is less emphasis on formal credentials and more on workers’ competencies and skills, could advance equity for older workers as well as others.⁴⁵ Government at all levels could emphasize skill-based hiring and promotion in the public service workforce.⁴⁶ In addition, the federal-state workforce development system could target resources to help older workers document their competencies and skills and more effectively sell these to employers, or clients in the case of the self-employed. Considering reports that private sector employers are taking a more expansive view of job qualifications in response to the tight labor market,⁴⁷ this approach holds promise.

More broadly, the federal-state workforce development system often fails to meet the needs of older women because no special programs exist to serve them, despite their unique needs. Reauthorization of the Workforce Innovation and Opportunity Act (WIOA) presents an opportunity to address these shortcomings by centering the needs of older women workers in the workforce development system, promoting targeted training, job search, and wraparound services that directly address barriers facing older women seeking new skills. Additionally, adjusting performance standards to account for age discrimination and other structural barriers facing older workers in becoming reemployed would also help to make the workforce system more age inclusive.

Apart from the WIOA, policymakers also have an opportunity to shore up the U.S. Department of Labor’s Senior Community Service Employment Program (SCSEP), both through the annual appropriations process and through the Older Americans Act reauthorization. The SCSEP is the only federal job training program targeted to low-income, older adults. It presently serves more than 42,000 individuals who face multiple barriers to employment.⁴⁸ About two-thirds (65 percent) of program participants are women, with 12 percent reporting Hispanic, Latino, or Spanish origin and 44 percent identifying as Black or African American.⁴⁹ A recent study identified program effects that go beyond helping individuals to obtain employment, by promoting broader financial, physical, mental, and social well-being.⁵⁰ As recently as 2005, the SCSEP reached 100,000⁵¹ individuals annually. Still, funding has failed to keep pace with the growth of wages in the economy, much less the increase in the size of the older adult population. This is despite the importance of the program to those who face the greatest barriers to finding work and the greatest need for earnings from employment. Restored funding would enable the SCSEP to serve more individuals who qualify for the program but cannot currently be served due to limited capacity.

Raise the federal minimum wage

The federal minimum wage has remained unchanged for nearly a decade and a half and stands at just $7.25 per hour. Since the minimum wage was last increased in 2009, its purchasing power has fallen 30 percent.⁵² One result of this policy inaction is the fact that 6.4 million individuals were classified as “working poor” in 2021.⁵³

The Raise the Wage Act of 2023 would gradually increase the minimum wage from its current level to $17.00 per hour by 2028.⁵⁴ It would also index the minimum wage to inflation in the future to ensure that its purchasing power keeps pace over time.

Boosting the minimum wage would have many positive economic effects, from growing the middle class to reducing the gender wage gap.⁵⁵ Older women would especially stand to gain from an increase in the minimum wage considering their overrepresentation in low-wage work.

Economic inclusion must also prioritize economic opportunity over the life course. Fortunately, policymakers have ready opportunities to ensure that career advancement remains possible, regardless of a woman’s age. Strengthening protections against age discrimination, modernizing workforce training to meet the needs of older women, and raising the minimum wage are pressing issues for women and the U.S. economy today and tomorrow. These actions will help to ensure women’s economic prospects are not limited by an arbitrary expiration date.

The authors would like to thank Bela Salas-Betsch for her research assistance and Sara Estep, Rose Khattar, Lily Roberts, Hailey Gibbs, Jared Bass, and Emily Gee for their contributions to this report.

*Correction, January 18, 2024: This report has been updated to accurately reflect the hourly earnings of workers considered in this analysis.