The Bureau of Labor Statistics (BLS) on Friday reported a 2.8% unemployment rate for workers age 55 and older in October, which reflects no change from September. The headline rate remains near a record low, as it has for a year.
Read the October jobs report
Despite reports of a hot job market for older workers, older Americans are not being lured back to work. At a time when economists would expect new entrants to the labor force to be increasing, the share of new workers in the older workforce fell last month by over half from the beginning of 2018, from 2.5% in January to 1.0% in September.
The drop in new entrants could mean the labor market has absorbed almost all the older people who want a job. That would be good news, but our evidence points in another direction. The share of older people who want a job but don’t have one (ReLab’s U-7) has not recovered to prerecession lows. At 7.4%, U-7 is 0.8 percentage points higher than the prerecession low of 6.6%. Even for the college educated, U-7 is 6.8%.
There are two main reasons why older workers are not entering the labor market.
First, older Americans, especially older women, face age discrimination in the hiring process, which discourages job search.
Second, most jobs created in the recovery have been low-paying, low-quality jobs, including contingent and alternative jobs.
This evidence does not support the belief that the retirement crisis can be solved by working longer. To ensure workers can retire in dignity, policy makers should expand Social Security and create Guaranteed Retirements Accounts (GRAs). GRAs are universal, secure retirement accounts funded by employer and employee contributions throughout a worker’s career paired with a refundable tax credit.
Read: It’s prime time for Americans 25 to 54 years old
These policies will help prevent downward mobility in the event of involuntary retirement.
Teresa Ghilarducci is a labor economist and expert in retirement security. She is the Bernard L. and Irene Schwartz professor of economics at The New School for Social Research and the Director of the Schwartz Center for Economic Policy Analysis (SCEPA) and The New School’s Retirement Equity Lab (ReLab). She is co-author of the book “Rescuing Retirement,” with Tony James.
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