More Older Workers Making up Labor Force
September 5, 2012
Millions of workers in their prime have dropped out of the labor market in recent years, but many older Americans are delaying retirement and being added to the workforce in record numbers, says the Los Angeles Times.
- Nearly 1 in 5 Americans ages 65 and older are working or looking for jobs -- the highest in almost half a century.
- The labor participation rates for other age groups have slid since the recession began at the end of 2007, most sharply for younger adults but also for people in their prime working years, their 30s to 50s.
The contrasting employment paths of seniors and other age groups reflect a long-term population and lifestyle shift intensified by the recession. The trend has significant implications for the broader economy.
- Having more older workers in the job market helps the country's precarious fiscal situation; by working, they're paying Social Security and other taxes rather than drawing public retirement and Medicare funds.
- The share of seniors claiming Social Security benefits fell last year to the lowest level since 1976.
- But there is a trade-off: In this lackluster economy, the increasing employment of seniors means fewer jobs for their younger counterparts.
- Apart from the direct financial hit to individuals, the shift represents a big collective loss of purchasing power.
- Young adults and prime-age workers spend comparatively more money because they are more apt to move, start families, send children to school and buy the latest gadgets.
- Consumer spending accounts for about two-thirds of the economy, and it has been sluggish during this recovery.
Seniors still make up a relatively small share of the total workers in America. But senior employment has jumped 27 percent in the last five years, surpassing 7 million in July, while adults ages 35 to 54 with jobs has fallen 8 percent during the same period.
Reasons seniors are delaying retirement include uncertain future income from 401(k)s and underwater mortgages. In addition, some seniors see working as a healthy way to stay active and productive. And better educated, older workers will have more opportunities to keep working than earlier generations, suggesting that their labor force participation will keep growing in the years ahead.
Source: Don Lee, "More Older Workers Making up Labor Force," Los Angeles Times, September 3, 2012.
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