June 29, 2012
Graying workforce: more older workers, fewer young ones
If Junior can’t get a job, blame Grandpa.
Battered retirement investments have led older workers to stay in, or re-enter, the workforce. And the situation has contributed to a shift in the average age of workers, with the percentage of young people employed dropping to the lowest level since the U.S. Bureau of Labor Statistics (BLS) started keeping track in 1948.
The percentage of people ages 65 or older in the workforce is at its highest rate since 1965, with almost 2 million older workers entering since the start of the Great Recession.
There are now almost 7.7 million workers 65 or older, making up 18.5 percent of the workforce. That’s 2 million more than workers in their teens.
It’s not just the younger seniors who are still punching the time clock. The number of workers 75 or older has never been higher; 7.8 percent of that age group, or 1.4 million people, are in the workforce.
Job woes for older teens
Employment of 18- and 19-year-olds is at historic lows. Ten years ago, half of all people that age had a job. This year, slightly more than one in three is working. The unemployment rate in May for those older teens who wanted a job was 23.5 percent; it was 7.6 percent for those 20 and older.
Dennis Jacobe, chief economist for Gallup Inc. in North Carolina, says his organization has been tracking the same trends and working to understand what’s going on.
“There are a couple of different factors,” he says. “After the recession and financial crisis, a lot of older Americans lost their retirement nest eggs.” Those workers don’t have the time needed to recover their investments, so they have to go back to work.
“Retirement, in a way, has changed,” Jacobe says. “The old way was: You clip coupons, sit on the beach and enjoy your retirement.”
Now more people are healthy later in life and able to work, so their retirements are spent working part-time jobs that leave them able to take time off to travel but also give them something to do and a paycheck when they return home.
The part-time jobs they desire, though, are a hot commodity with younger workers. In a recent Gallup survey, the company found that 32 percent of 18- to 29-year-olds were underemployed in April.
The BLS reported that the percentage of the youngest workers, ages 16 to 19, who are working or even trying to get a job, fell to 31.8 percent in April. That’s down from an annual rate of 41.3 percent in 2007. And the percentage of teens working is far off the annual rates of 51 to 57 percent that the country saw in the 1980s and 1990s.
Some of that might be by choice. In the upper socioeconomic groups, a summer job isn’t as important as it once might have been, says John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas Inc.
In past decades, teens would mow lawns or work a retail job for pocket money. Now, he says, “Many teens don’t want that. They want to go to camp or a summer program or take an internship.”
Challenger says there is more pressure to build a resume for college applications, so teenagers are looking for experiences that have a cachet that a summer job does not.
Those who are trying to find work may be running into difficulties. In April, teenagers had an unemployment rate of 23.2 percent, without seasonal adjustment. That was higher than any other age group and nearly double the rate for people ages 20 to 24.
For young people who want to work, many traditional venues such as municipal jobs at community centers, parks or pools don’t have the funding to hire teenage help.
“They’re also being crowded out by competition from others,” Challenger says.
The 20-to-24 demographic is taking jobs that were once the province of teenagers. Those were the jobs, he says, that taught young people the foundations of working, such as showing up on time and being reliable.
“It’s a tragedy,” Challenger says. “If you don’t have those beginning jobs, it’s harder to build a working life foundation.”
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