Independent Work Offers Hope for Financial Security for Women 50+

This op-ed is part of a series about Forgotten Women—financially insecure women between the ages of 50 and 65—and policy solutions that can offer them hope. Learn more about the Hope Agenda from Independent Women’s Voice here. Originally appeared in RealClear Health.

New polling from Independent Women’s Voice finds that 89% of women want policymakers to find financial solutions for people who can’t find new work but can’t afford to retire. One way to help these forgotten women with real financial fears is to clear bureaucratic hurdles that restrict flexible work and entrepreneurship.

Unfortunately, the Biden administration is about to make these fears worse and even more justified through onerous regulations on small business owners and increased restrictions or outright bans on independent contracting, to name a few.

Self-employed individuals in California who’ve lost their livelihoods due to AB5 (Assembly Bill 5) know all too well how anti-independent contractor policies disproportionately harm Americans closer to retirement age. On March 11, 2024, California’s cautionary tale will spread to all 50 states when new draconian, anti-choice regulations from the Department of Labor (DOL) restrict independent contracting nationwide.

Mirroring AB5’s strict “ABC” worker classification test, the new DOL rule, which imposes a six-factor worker classification test under the Fair Labor Standards Act, could impact more than 64 million Americans who choose self-employment as a career or a side gig.

Just as with AB5, older professionals will find themselves directly in the crosshairs of the DOL rule, given they are more reliant than ever on self-employment to address workforce challenges such as ageism.

A licensed pharmacist with a doctorate, Nancy Hall enjoyed a thriving, decades-long independent career inspecting pharmacies across California. Hall, in her sixties, lost her career overnight after AB5 was implemented in January 2020.

“I was gainfully supporting myself pre-Social Security,” said Hall, “and then AB5 struck and forced me to start taking withdrawals out of my IRA and take my Social Security retirement benefits four years early. This cost me compound interest and big reductions in Social Security. More importantly, it took away my ability to work flexibly part-time. I tried to get other jobs but I struggled to get hired because of my age.”

Although age discrimination in the workplace should be unlawful, many older workers say they’ve experienced it, according to a 2023 AARP survey.

Freelance writer JoBeth McDaniel recalls being told by a university administrator a few years ago that he would not hire anyone older than 34.

“He was in his 50s and he claimed anyone that age would be inept at new technology, except for him, of course,” said McDaniel. “I have friends who are struggling in retirement because they lost good jobs at age 50 and could never find another career position despite years of job searching.”

A 2017 field study bears this out. Conducted by the Federal Reserve Bank of San Francisco, the study revealed a 47% lower callback rate for older female applicants than young female applicants aged 29 to 31 years. For sales jobs, the callback rate was 36% lower for older female applicants.

Because independent contracting is vital to keeping pre-retirement women attached to the workforce, it defies logic that legislators insist on stifling the very independent career opportunities that help these women supplement their income, stay active, and maintain a sense of purpose.

Instead, lawmakers should protect worker freedom and flexibility for all independent professionals. This means eschewing the approach of AB5 and the forthcoming DOL rule. And it also means making it easier for Americans to start and run their own small businesses by decreasing barriers to entrepreneurship and work.

As Patrice Onwuka, director of the Center for Economic Opportunity at Independent Women’s Forum, testified before a Congressional committee, many of these barriers are government-imposed:

“Too many Americans face obstacles to building capital associated with high startup costs to launch a business,” she said, “not to mention credentialing challenges including occupational licensing and the unique challenges military spouses face in meeting each state’s requirements for a given occupation. All this unnecessary red tape can make business ownership a challenge for Americans of both sexes and any age. Restricting the use of independent contractors will only make it harder for women to start and run businesses and support themselves and others.”

If policymakers want to get serious about offering hope to the 89% of women who want pathways to greater financial security, they should focus on making it easier, not harder, to work independently. This holds particular benefit for many women who are approaching retirement age, who may find it hard to find or keep a traditional 9-to-5 job. The Biden administration shouldn’t forget women in this predicament, but instead, offer them real solutions. 

Karen Anderson is a visiting fellow at Independent Women’s Voice (iwv.org) and the founder of Freelancers Against AB5.