WASHINGTON — Americans have been losing their jobs in droves, yet one group has gained ground in employment during this recession: workers 55 and older.
The reason — economic necessity — says a lot about what aging baby boomers may face as retirement age approaches.
The nation's unemployment rate stood at 9.5 percent in June and is expected to top 10 percent before a sustainable growth cycle ends the recession. Americans of all working-age groups have lost a significant number of jobs in the downturn, but older workers have fared less poorly as a percentage of the work force.
"Everyone is seeing huge increases in unemployment — people dropping out of the labor force across the board — but older workers have seen a big increase in labor-force participation since the start of the recession. And I think it has a lot to do with declining retirement security," said Heidi Shierholz, an economist with the Economic Policy Institute, a liberal research group.
A close look at work force data reveals that when the recession began in December 2007, workers 55 and older constituted 18 percent of the labor market. Today, they make up more than 19 percent. That means more Americans are working well into what would have been retirement, by choice and, increasingly, by necessity. In addition, the jobless rate for that age group is rising more slowly than it is for younger groups.
The economic crisis has condemned many baby boomers — the roughly 75 million Americans born from 1946 to 1964 — to longer working lives.
"For older people right now, the crisis is not jobs, it is wealth," Shierholz said. "They thought they had money tied up in their homes, and that's gone or halved. If they have a 401(k), they've also seen a decline there ... they are simply not leaving the labor force. In fact, they are still coming in."
Older workers are hanging on longer, and the Employee Benefit Research Institute, a clearinghouse for information on all things related to pensions and benefits, put out a study Tuesday that helped explain why. It estimated that the median value of assets in 401(k) plans and individual retirement accounts fell by at least 15 percent from the end of 2007 through mid-June.
The EBRI also surveyed active and retired workers earlier this year and found that only 6 percent of active workers and 13 percent of retirees were very confident that future Social Security benefits will be provided at the same level as today. The numbers were even worse for Medicare benefits, with only 5 percent of active workers and 9 percent of retirees saying they were very confident that current benefit levels will be maintained.
It all explains why older workers are reluctant to take leave of their professions.
"In previous recessions, we tended to see more of a decline in labor-force participation. During this recession, that's much less common, and I think a lot of that is because retirement anxiety is much greater now than it used to be," said Richard Johnson, a senior fellow and retirement researcher for the Urban Institute, a center-left policy research center.
The financial market turmoil last year wiped out about $6 trillion in stock market wealth, according to estimates by JP Morgan Chase & Co.
"I think with the stock market crash, retirements have really slowed," Johnson said. "We don't see as many older people dropping out of the labor force as we used to."
The EBRI retirement survey, published in April, hinted at that.
"They basically lost three years of contributions and (wealth) accumulation. They typically said, on average, they were delaying their retirement, and they told us it was because they need to," said Craig Copeland, an EBRI researcher who conducted the survey.
His study found that about two-thirds of workers who said they were delaying their retirements came to their decisions after last September's financial meltdown.
"They've decided it's better to hold on to the job you've got; you are more certain to have insurance and health care," said Larry White, a senior legislative representative for economic security at the AARP, the lobby for Americans 50 and older. "Retirement isn't as attractive an option as it had been, especially before the downturn."
ON THE WEB
EBRI retirement attitudes survey
Urban Institute statistics on older workers
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