Michigan study shows that among aged families who had worked at some time, one-third never earned more than $2,000 a year. More than half such families never earned an income sufficient to meet an adequate budget, much less to assure their comfort in years subsequent to retirement. A study of persistence of poverty in 1963 showed that whereas 55 percent of those aged 25 to 45 remained poor, 71 percent of those 55 to 64 and 80 percent of those 65 years and over remained poor.

Race and age

The incidence of poverty among the aged, as among younger groups, is higher for the nonwhite than for the white. But being white is no insurance against poverty in old age. In absolute numbers there are far more poor aged whites than poor aged Negroes, and the effect of age and presumably retirement, in pushing people over the poverty line, is greater for whites. For many white aged persons, finding themselves to be poor is a new and shocking experience. For many older Negroes, it is an old, unhappy story requiring action. Their poverty today is the inevitable consequence of past inferior education, limited job opportunities, and low-paid irregular employment periods.

Among older persons still in the labor force, disadvantages for older workers generally are doubled when they are also Negroes-discrimination because of color is added to discrimination because of age. The rate of unemployment for Negro male workers aged 55 years or older is more than twice that of older white workers. Nearly half of all older Negroes are laborers or service workers. For men aged 55 to 64 years, median years of schooling is six for Negroes and nine for white. Even when compared with white workers of the same educational level in the same occupation, Negro workers have substantially lower average earnings."

Very recently acquired data shows a severe drop between 1963 and 1964 in labor force participation of nonwhites-from 194 per thousand nonwhite males age 55 and over to 177 per thousand. For white males of this age the rate remained about the same as in the previous year.

The situation of the Negro is presented here as the largest minority group and one for which statistics are readily available. It is representative of other minorities such as Mexican, Puerto Rican, and perhaps worst of all-Indians.

Rural poor

The incidence of poverty is substantially higher for all rural groups when the same income measures are used as for urban groups. To what extent this difference would persist if the SSA index (which sets a poverty level budget on the farm at 30 percent less than for urban residents) were applied is unknown. Among farm dwellers, based on the SSA poverty index, there are only about 400,000 poor persons aged 60 and over. They constitute one-third of all farm people of this age. Their rate of poverty on this basis is no greater than that for persons of this age in the general population. However, there are two or three times as many rural nonfarm poor families with heads 65 and over, as there are rural farm families.

According to "Poverty in Rural Areas", Agriculture Economics Report No. 63, poverty is more prevalent among families headed by persons 65 years old or older. About 1 to 11⁄2 million poor rural families are in this age group. (The study is based on incomes less than $3,000 for families and less than $1,500 for individuals in 1959.)

This report makes an important distinction among poor people. "Some poor people in rural areas are considered to be 'boxed in' and necessarily dependent on assistance in their home communities * * *. Most of the boxed-in families were those with older heads whose potential for retraining and migration to other communities was relatively limited. In this group were an estimated 1,157,000 families with heads 65 years or older, and 1,255,000 with heads 45 to 64 years of age and 8 years of school or less."

The House Committee on Education and Labor in the committee print "Poverty in the United States," has this to say: "It is sometimes claimed that the rural poor have a lower cost of living than their urban counterparts because of their food produced on their land. This is far less the case than it was two decades ago. The majority of nonfarm families grow little of their own food, and even those who live on the farm have become increasingly dependent upon the cities for employment and staples ***. More than 70 percent of rural families with less

2 Further detail on the situation of the older Negro may be found in a publication of the National Urban League entitled "Double Jeopardy."

than $3,000 a year, live in dilapidated houses often lacking indoor plumbing and central heating, and in many cases, running water."

Employment

Participation rates.-Older workers (45 years of age and over) account for nearly two-fifths of the labor force. Participation rates decline and unemployment rates rise with increasing age past 45 years. In the age group 45 to 5990 percent are still in the labor force; at ages 60 to 64-75 percent; at ages 65 to 69-42 percent; at ages 70 to 74-29 percent; at ages 75 to 79-19 percent; at ages 80 to 84-11 percent.

The situation has worsened since 1947, when unemployment was generally lower. In 1947, 48 percent of men 65 and over were still in the labor force; in 1964 only 28 percent. In addition to a substantial fall in participation rates for men 65 and over, there has been a significant decline in participation rates for men 55 to 64. There are now more than 1 million men aged 55 to 64 who are not in the labor force a number much greater than in the 20-year span between 35 and 54 with a much larger total population. The average 55-year-old man has 12 additional years of work ahead of him, or more than one-fourth of the entire work life expectancy for men.

Early retirements.-The dropout from the labor force may be accounted for in part by earlier retirements. To the extent that this reflects the retirement of men 62 to 64 under the optional retirement provisions of the Social Security Act, they are for the most part persons of low income who are compelled to accept low benefits continuing throughout their lifetime. Such a decision is not voluntary retirement to enjoy leisure as a fruit of long years of work, but simply acceptance of the inevitability of a life of poverty.

Lower income.-Difficulty in finding jobs and longer periods of unemployment, more part-time work, larger proportions in low-skilled jobs-all result in lower average incomes among older workers who have not yet reached the usual retirement age. The median income for men steadily declines after age 45. Unemployment.-Older workers are underrepresented in the occupations which have had marked employment increases in recent years, and overrepresented in those which have suffered marked declines. Duration of unemployment rises with increasing age past 45. Of all those unemployed for more than half a year in 1963, one out of four were men 45 to 64 years of age. The average duration of unemployment for those 45 to 64 was more than 20 weeks and for those 65 and over about 30 weeks.

Part-time work. Of those older men who do work, the proportion who work part time steadily increased with age one out of four employed men between ages 65 and 69, one out of three between 70 and 74 and one out of two employed men age 75 and 79 were working part time.

Lesser mobility.-The lower the income the lower the rate of migration for persons 65 years or older. The older the individual, the less likely he is to migrate. At any age, Negroes are less likely to move. Older workers also have much less job mobility than younger workers. When they do change jobs, most do so because of loss of the previous job.

Education. The median years of school completed by individuals age 65 and over in the labor force in 1964 was 8.9 years. Farmers, private household workers, and laborers are the only occupational groups whose median schooling approximates that level. In 1975 about half of those 65 years or older and one-third of those aged 55 to 64 will have 8 years or less of education.

Men 45 years and older constituted almost 40 percent of the male labor force, and women of that age more than 30 percent. More than 25 percent of the unemployed were 45 years or older. But only 10 percent of the male trainees and 12 percent of the female trainees enrolled in institutional projects started in 1964 under MDTA were in this age group.

Employment as a source of income

Although only one out of four persons 65 or over worked during the year and most of these were in the younger ages, employment was the largest single source of income for the aged population as a whole in 1962. It accounted for about one-third of aggregate income, somewhat more than Social Security benefits. The replacement of income now earned by these older men and women would necessitate huge public expenditures for income-maintenance programs. The long-term trend in labor force population and employment has been consistently downward for men of retirement age, and will continue so long as labor supply exceeds labor demand and teenagers have high rates of unemployment.

The challenge is to create more jobs for all ages, as is possible now in service occupations. Achievement of an unemployment rate of 3 percent would go far toward eliminating this problem.

Potentials for employment

The aged are not a homogeneous group. For program planning, it would be useful to know the size of groups of the older poor with essentially the same characteristics with respect to health, family status, education, work experience, housing, and employment potential. A study of old-age assistance recipients showed that two out of three were women and half were more than 76 years old. Many were in poor health. Obviously employment programs would not be the objective for this group, although it is equally obvious that a group of some size even among old-age assistance receipients could be identified as having employment potential.

For the aged poor not receiving old-age assistance, the factors affecting employment potential are likely to be more favorable, and there are two or three older poor persons for every one receiving OAA. Even though a minority could work if jobs were available, it would be a minority of 1 or more million, a number clearly in excess of the job openings which might be available to them in the near future.

Health and housing

Health. Although higher incidence of ill health and the limitations it imposes are associated with increasing age and lower incomes, substantial proportions and numbers of the older poor do not have any chronic conditions or limitations in mobility or in their major activity; only a small proportion have major limitations of activity and mobility. In families with incomes under $2,000, less than one-fourth of persons 45 to 64 and only one in about seven persons 65 and over have no chronic conditions; on the other hand, in the same income class, 65 percent of those 45 to 64 and 44 percent of those 65 and over have no limitations in activity. Of course, limitations of major activity rise with age; only 1 out of 20 at ages 45 to 54, but 1 out of 4 at age 75 and over.

Housing.-2,700,000 units, or 30 percent of all units in which the head of the household is 65 or over, are classified as in deficient condition-that is, they are lacking in some or all facilities, deteriorating or dilapidated. Although persons 65 and over were only 10 percent of the population, they occupied 22 percent of all deficient housing. About 40 percent of these deficient units were occupied by persons who had incomes of less than $1,000, and another 29 percent by persons with incomes of $1,000-$2,000. These totaled about 2 million households.

More than half of all old Negroes live in housing either dilapidated or lacking essential plumbing as compared to one in eight of all white older people.

III. CAUSES OF POVERTY AMONG THE AGED

For the aged, as for other poor, poverty is often a condition persisting from early years. The University of Michigan study indicated that more than half of the families whose head was 65 or over had either never worked at all or had never earned more than $2,000 a year. Obviously, little could have been set aside for retirement years.

Not born poor but made poor

There is also evidence that existing trends are creating a class of older people who did not always live in poverty. A Bureau of Census study shows that men who were age 65 and over in 1959 had suffered a decrease of one-third in real income, as compared to their income 10 years earlier, whereas the income of men 34 to 44 in 1959 had increased by one-third. Most of these older men had not retired.

It is apparent that retirement in itself is sufficient cause for poverty, since OASDI benefits represent only about 30 percent of average factory earnings, and a large number of beneficiaries have little or no cash income aside from their benefits. In 1962 about one-third of the unmarried beneficiaries received less than $150 of money income other than benefits during the year, and one-fifth of the couple had less than $300 in addition to their benefits. In addition to prior low incomes, among the causes of poverty in middle age and later years, are reduced labor force participation, high rates of unemployment, discrimination because of age or race, limited education and limited opportunities for retraining, lower rates of migration and lesser job mobility, prior incidence of ill health,

lower earnings when employed-including a greater frequency of part-time employment. Some of these factors are the same as those affecting younger people. Born Too Soon.-There are other factors which do not appear in current statistical analyses. Nevertheless, they have strongly affected the conditions which older people find themselves in today. First, when these older people were young, families were large, and the father was the only breadwinner; when they were young or in their prime years, a higher proportion of families were poor than is true today. And poverty persists.

Lived Too Long.-Second, there is a great likelihood that those who live long enough will encounter misfortunes, sudden or gradual, from which some individuals will not recover-such as loss of jobs when firms or industries contract, business failures, illness, widowhood. The impact of such events is particularly to be anticipated among people who have lived through the unsettled times which have been characterized in the lives of older people—war, depression, recession, inflation. These are blows felt in the past. The clock cannot be turned back. In the present, just at a time when older persons have increased in both numbers and in proportion, there is the persistence of substantial unemployment.

IV. STRATEGY TO COMBAT POVERTY AMONG THE AGED Large-scale reduction of poverty could be achieved by (1) economic growth to a level which would offer opportunities for employment for older persons comparable to that during World War II, and (2) very substantial increase in income-maintenance program, specifically the public programs under Social Security. It is unlikely that changes in the rate of economic growth or in the level of income-maintenance payments will occur to a degree which would substantially affect great numbers of the aged poor in the near future.

The Social Security Amendments of 1965 provide highly significant aid to the older poor through health insurance benefits. It also provides a 7-percent increase in OASDI benefits, and smaller increases in public assistance payments. However, in gross amounts, the greater benefits go to the more prosperous of the beneficiaries and only $4 to those at a minimum level. Even this amount will not always be available to the aged poor, since they would be well advised to permit a deduction of $3 toward supplementary voluntary health insurance benefits. Further, for those whose OASDI benefits are supplemented by old-ageassistance payments, the increase may simply be deducted from welfare budgets. Increases of similar size may be anticipated from time to time. In view of the impact on payroll taxes, substantially more generous benefit rises are not too likely. Further, the principle of wage relatedness in Social Security benefits means that the poor are affected less by these increases.

In any case economic growth and public income maintenance programs are the primary responsibilities of agencies other than the Office of Economic Opportunity especially the Council of Economic Advisers; the Health, Education, and Welfare Department; Commerce, Labor, the Treasury and most of all, the Congress of the United States. OEO, in carrying out its responsibility under Title VI (B) for coordination, has an opportunity of which it should avail itself to stimulate, assist and support progress along these lines.

It also has direct and immediate responsibility to use its authorities and resources under the several titles of the Economic Opportunity Act to help the large proportion of the poor who are middle aged and aged. OEO can do this through programs and activities which would serve three general objectives: (1) to increase earnings and opportunities for employment; (2) to improve the standards of living possible under very limited incomes through subsidized services and by income-stretching devices; (3) to improve the quality of their lives by assuring that needed social services are available where they live, are known to older persons and their families, and do in fact reach older persons who need help.

The objective of increased earnings has been mentioned first, but it cannot have the emphasis it has in most OEO programs, which are heavily youth oriented and based primarily on the concept of education and training as instruments for breaking the cycle of poverty. Education and employment programs are essential to the middle aged and should be vigorously pursued. But they

3

* Keyserling in "Progress or Poverty" says: "While we need enlarged education and training, we should reject the slogan that 'I never knew an educated man who was poor'; most college-trained people acquired the advantage because their parents were not poor, and many senior citizens with college degrees are poor. Millions of the poor due to old

age or disabilities, cannot in the main be accorded jobs at good pay."

offer only partial solutions for many persons of the usual retirement age. For most persons aged 65 and over, preparation for jobs other than by short-term, on-the-job training, would be unrealistic. The long-term trend of employment for those 65 and over has been steadily downward. A large proportion of their employment is part time. Even with sustained and massive efforts, it is doubtful that more than 1 out of 5 or 10 of the older poor, not now employed, could find jobs.

Although the aged are not a homogeneous group-and a significant number have employment potential-for far greater numbers, other programs must be sought. These would ameliorate and improve their living conditions and make life more tolerable despite continued limited cash incomes. They include consumer education, self-help and mutual aid programs, health programs, housing and home management, and a variety of social services.

For youth, the major goal is to break the cycle of poverty from generation to generation. To be poor when old is part of the life cycle for many. For youth measures sought may be long range, starting even in infancy. For the old, measures adopted must be directed toward results in the immediate or near future. Many will continue to live on very limited incomes, but they should be able to live in greater decency and dignity.

V. POTENTIALS FOR ACTION AND PRESENT STATUS

A. Present titles of Economic Opportunity Act

Title I. For older poor persons, all titles of the Economic Opportunity Act, except title I offer potentials for service which have not yet been fully explored. Actual use of the resources of the act to benefit middle-aged and older persons has been minimal. Probably less than 1 percent of the funds available this year have been directed toward activities which may be identified with this segment of the population. It is unnecessary for purposes of this report to document this conclusion since in testimony on June 16, 1965, before the Senate Special Committee on Aging, the Director of the Office of Economic Opportunity clearly demonstrated that he was well aware of this situation and stated that OEO was seeking "ways to make a contribution to the alleviation of poverty in the aged groups."

Title II (A). General community action programs: Title II(A) especially offers many and varied opportunities and has no age restrictions. Communities, public and nonprofit private agencies are eligible for programs in such fields as employment, job training and counseling, health, vocational rehabilitation, housing, home management, and welfare-in effect, any action program which can show promise of concrete progress toward elimination of poverty or causes of poverty. All the programs and projects recommended in chapter V could be funded under title II (A). Possibly because of a widespread impression that OEO programs are exclusively youth programs, CAP projects related to the elderly are not as yet a significant proportion of the total program.

Title II (B). Adult basic education provides for programs of instruction for persons age 10 or over whose inability to read or write impairs their ability to find employment. Although the act seems primarily directed at raising the level of ability to get or retain employment, its stated purpose includes making people "better able to meet their adult responsibilities." This may be construed to apply to the level of literacy necessary for the usual demands of living and civil responsibilities. The report on the bill referred to "personal growth opportunities" and the "larger life of the mind and the spirit" made possible through the acquisition of the tools of reading, writing, and arithmetic. Funds may be used to meet the costs of local educational agency programs for adults. This part is administered by the U.S. Office of Education through State education agencies. Title III. Special programs to combat poverty in rural areas has for its purpose to raise the income and living standards of low-income rural families. Many of them can be rehabilitated on the farm if they are assisted in improving their living standards. Loans up to $2,500 can be made to improve farm operations, to participate in cooperatives, and to finance nonagricultural enterprises to supplement income. In view of the high proportion in rural areas who are poor and aged, and limited in education and mobility, this aid could prove most helpful. It is administered through local farmers home administrative offices. Title IV. Employment and investment incentives: This authorizes loans not to exceed $25,000 to strengthen very small and marginal farms and to assist qualified persons to establish such concerns. It is directed at retailing and service businesses employing three or fewer persons-luncheonettes, filling stations,