By Anne Tergesen
Pinched by falling asset values, older Americans are returning to the labor force—or clinging to the jobs they already have.
According to the Bureau of Labor Statistics, 16.5% of Americans 65 and older were employed in July, up from 15.5% in 2007. More specifically:
* Among those ages 65 to 69, 29% are employed now, versus 28.7% in 2007.
* Among those ages 70 to 74, 17.5% are employed now, versus 16.6% in 2007.
* Among those ages 75+, 7.2% are currently employed, compared with 6.6% in 2007.
Moreover, the percentage of unemployed people age 65 and older has jumped sharply—from 3.3% in 2007 to 6.7% in July, according to BLS data. “In July, older workers had an average duration of unemployment of” 52.7 weeks, compared with 20.2 weeks in Dec. 2007, according to AARP Public Policy Institute, which looked at job seekers 55 and over.
“There is no question but that the impact of this recession on the unemployment rate of older workers has been far more dramatic than in previous recessions,” says Sara Rix, a policy analyst at AARP. “We have sustained rates of unemployment for the older workforce that are far higher than at any time in the past 60 years.”
“In contrast to previous recessions, more older workers are staying in the labor force longer as unemployed because they really do want and need a job,” says Ms. Rix.
What people may not realize is that participation in the labor force by older workers has been increasing steadily since the 1990s. Among the causes of the long-term trend are:
* A shift towards less physically demanding jobs.
* Steady gains in life expectancy
* Reductions in defined benefit pension plans
* Cuts in Social Security, including the increase in the full retirement age that’s being phased in through 2022
Yet another factor is the rising skill level of those at retirement age. In contrast to past retirees, economists say, today’s have the same level of education as entry-level workers do—with lots more experience. As a result, in comparison with previous generations, they are more attractive to employers.
With Congress contemplating further reductions in Social Security, as well as cuts to Medicare benefits, the trend towards working later in life is here to stay.
As a recent Wall Street Journal article reported:
“More than three in five U.S. workers in their 50s and 60s plan on working past 65 — and 47% of that group say they’ll do so because they’ll need the money or health benefits, according to a 2011 study from the nonprofit Transamerica Center for Retirement Studies.”