Source: U.S. Government Accountability Office
The tough job market has been so hard on some Americans that they have dropped out of the running altogether.
But here’s a surprising twist: Generally, that’s not been true of older Americans.
The labor force participation rate, or the number of Americans who are working or looking for work, has declined in recent years for every age group except those who are 55 and older, according to a report released this week by the Government Accountability Office.
Older Americans generally have a lower labor force participation rate than other age groups, and for good reason: That’s the point in life when most people retire.
But the percentage of older Americans who are choosing to remain in the labor force, or to get back in it, has steadily been rising over the past 20 years and even continued to increase over the course of the recession and recovery.
About 40 percent of workers age 55 and over were working or looking for work in 2011, the GAO analysis found, compared to about 30 percent in 1990.
That’s in contrast to young and prime-age Americans, who have seen declines in labor force participate rates in recent years.
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A closer look at the data shows that the real increases are coming from some of the oldest workers. Phillip Levine, an economics professor at Wellesley University, noted that labor force participation among 55- to 64-year-olds has generally been flat in the last five years, at about 64 to 65 percent.
But for workers 65 and over, labor force participation has increased from 15.5 percent in 2007 to 18.4 percent now. Levine’s analysis was based on the Bureau of Labor Statistics data.
There are a number of potential reasons why the labor force participation rate has increased for people who we traditionally think of as being in retirement age.
One explanation may be that older workers are choosing to work longer to make up for investment losses and other financial woes as a result of the recession. Some people age 65 and older also may be getting back into the labor force because they can’t make ends meet on Social Security and retirement savings.
The GAO report said other factors keeping older workers at work may include better health and life expectancies, the increasing number of older women in the labor force and the need to stay at work to retain health benefits.
That a larger chunk of older people are working doesn’t diminish how tough the recession has been on people aged 55 and over, Levine notes.
Although the unemployment rate for older workers has generally been lower than the broader population, a job loss in that age range can be particularly devastating. That’s because it generally takes older workers longer to find a new job, and that long gap in employment just before retirement age can have a harsh impact on their retirement plans.
The GAO report to the Senate’s Special Committee on Aging focused mainly on the effect of long-term unemployment on older workers.
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In testimony before the committee last week, the National Employment Law Project noted that many older workers face the double-whammy of a big employment gap and a resume that gives away their age. Both can be a turnoff to some potential employers.
Levine, who has done extensive research into older workers and the recession, said many people in that age range are “limping across the finish line.”
“They find some way to make ends meet from whenever they lose their job at 58 or whatever, and finally when they get to 62, Social Security provides them with a lifeline,” he said. “It provides a means of getting by.”
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