The Job Market Has a Senior Moment
Buried in the latest U.S. jobs report is an unexpected milestone: People age 65 and over are now more likely to be in the workforce than at any time in almost 50 years.
At 19.2 percent, the labor force participation rate for seniors - that's the proportion working or looking for work -- is now the highest since 1964, the year before the creation of Medicare. Fully a third of Americans in their late 60s are in the workforce, the most ever on record.
These changes are part of cataclysmic shifts over the last several years that are unquestionably lousy news for the younger set. In 2007, a 16- or 17-year-old was more likely to be in the workforce than someone age 65 to 69. Now, those seniors are 42 percent more likely to be working or looking for work than teenagers, who face an unemployment rate of 27.5 percent.
Since 2007, about 4 million people of all ages have given up on work as the labor force participation rate dived 2.6 percentage points. "The real legacy of the Obama economy is hopelessness among job seekers," the House Republican Conference said last month when the rate hit a 34-year low.
- Special Report: The Future of Retirement
Are harder-working seniors a silver lining in this labor cloud? Perhaps only for those seniors who really enjoy their jobs and aren't staying put out of fear. Among the other reasons older Americans are staying in the workforce is "higher life expectancy, less confidence in social benefit programs and loss of wealth from the Great Recession," says Bank of America U.S. economist Michelle Meyer.
They may be bringing home a paycheck out of consideration for their unemployed or underemployed children and grandchildren. In a 2011 Ameriprise survey, 93 percent of Baby Boomers said they've provided financial support to adult children. According to Atlanta Fed's Julie Hotchkiss, women, ethnic minorities and people with small children have also stepped up participation in the labor market. The goal of all these groups: "To make up for lost income elsewhere in the household," she writes.
Assuming your career will last into your 60s or 70s can be dangerous financially, as Carla Fried points out. Still, with the younger generations racking up student debt, competing for unpaid internships or filing for disability, seniors might have no choice but to hang onto their jobs for dear life.
This essay originally appeared in Bloomberg.com's weekly personal finance newsletter, Wealth Watch. Sign up here.