Older workers carry a large burden. These days, many are hoping to save for retirement and also help younger loved ones find their economic footing. It’s a lot to take on. But could things be looking up for older workers?
The unemployment rate for workers over the age of 55 was just 3.1 percent as of June of 2018. And, in May, it was a remarkably low 2.8 percent. What does this say about the current job market for older workers? Does it indicate that things are looking up economically for this group? Or are there are other hidden factors to consider? Let’s take a closer look at a few different indicators in order to try to round out the picture.
1. The unemployment data is promising
There’s no doubt that the current unemployment data for workers over the age of 55 seems promising. The current overall unemployment rate for this demographic is 3.1 percent, and for women over 55 it’s just 3.0 percent. This unemployment rate hasn’t been higher than 3.3 percent for at least a year. This statistic, in and of itself, is a positive indicator of a thriving job market for older workers.
However, In 2018, workers in their late 50s almost don’t feel as though the even fit the demographic of “older workers.” People are retiring later than they used to because life expectancy has improved but also because it’s increasingly difficult to put away enough money for retirement. Therefore, it’s important to examine employment data for workers in a slightly older demographic too.
The unemployment rate for workers over the age of 64 is slightly higher than it is for their younger counterparts, but not by much. In June of 2018 it was just 3.3 percent for workers age 65 and older with no disability. And it was 4.2 percent for persons in this age group with a disability. These numbers feel more than a little positive. In fact, the Bureau of Labor Statistics projects that workers over 65 will experience the fastest rates of labor force growth by the year 2024.
2. The retirement age is on the rise
It’s important to consider the fact that there are a growing number of workers who are employed well beyond traditional retirement age. They’re trying to save enough to retire, which is harder to do these days as the number of companies providing defined benefits fades. Many also want to help to support younger friends and family members in their education or just help them to make ends meet. As a result of all of these factors, the annual growth rate in the labor force of workers between 65 and 74 is 4.5 percent. It’s 6.4 percent for people 75 and older.
It’s important that these workers have a thriving labor market to work with given the fact that many feel that they want, or more often need, to work later than the generations that came before them.
3. Many companies and industries value older workers
There is some evidence to suggest that many companies and industries value the skills and contributions that older workers bring to the table. A tight labor market is also helping to create this demand for older workers. But there’s more to it than that.
“They bring so much experience to the table,” Lydia Greene, chief Human Resources officer for Tufts Health Plan where individuals over the age of 50 make up 34 percent of the company’s workforce, told CNBC. “They’re very stable and very reliable and help us develop and mentor our younger workers.”
Companies’ impulse to hire and sustain older workers is best evidenced by the low unemployment rate for folks in this demographic.
4. There are hidden factors
The Economic Policy Institute warns that while these unemployment rate headlines seem promising, they might not accurately reflect reality. There are other hidden factors that must be considered. For example, folks only count as unemployed if they’ve sought employment in the last month. How many older workers have opted out of the labor market because they couldn’t find work? It’s hard to say. The EPI has dubbed these folks the “hidden unemployed.”
Additionally, the EPI affirms that when you factor in the number of older workers who are employed part time when they’d really like to be employed on a full-time basis, the rate increases to 8.2 percent. This underemployment has an especially devastating impact on the 14 percent of older workers in low-paying jobs as well as the 62 percent who lack retirement plan coverage.
The employment picture for older workers may be looking up according to some data, but those figures alone likely don’t paint a fully accurate picture. It’s an area of the job market, and the economy, that is especially complex and ever changing.
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