Labor strategists often talk about the high number of unemployed college graduates trying to enter the job market. Granted this attention is warranted as the student loan crisis, coupled with high competition and low demand, has created a turbulent economic condition for many young workers starting out their careers. What’s not often in the spotlight is the millions of workers over 45 who are unemployed. These are the people who have decades of experience; many of whom have bachelors or master’s degrees and are veterans within their companies, and offices. Electricians, accountants, public servants, they’ve all suffered various levels of unemployment due to the troubled economy. They are a group that’s often overlooked when it comes to unemployment, and their unemployment has a profoundly destructive impact.
As of May 2014, there were 3.1 million unemployed workers aged 45 and older. This is compared to 2.23 million unemployed in the same age group in 2007. Additionally, late career workers who are unemployed are seeing unprecedented durations of unemployment. According to an October 2013 Associated Press-NORC Center for Public Affairs Research poll, “Unemployed people aged 45-54 were jobless for 45 weeks on average, and those 55 to 64 were jobless for 57 weeks.” The staggeringly long absence from work has devastating consequences for experienced workers, and those about to retire.
We might say the numbers look promising based on the slight drop of unemployment, but the fact is that the unemployment rate for this age group remains higher than almost any time in the last twenty years. This is a dangerous time to be unemployed for those nearing retirement, because it has a direct effect on their Social Security Benefits (SSB). When a person retires, their SSB is calculated by average monthly earnings during the 35 years in which you earned the most. Typically workers in this age group are earning their highest level of income in their careers. Reduced employment, or unemployment in these final years before retirement can result in a substantial loss of retirement income.
As of 2010, workers over 50 accounted for 31% of the total labor force, compared with 20% in 1995. This trend is likely to lead to workers 50 and over accounting for 35% of the labor force by 2019. This could have disastrous effects for millions of late career workers if the unemployment level in this age group remains high. Workers over 50 are gaining a larger share of the labor force, and if they are met with record high unemployment before retirement, it will affect not only their cohort, but the economy as a whole in a number of ways. Here are a few examples to illustrate some of the particular challenges of older workers:
Workers in this age group have much more to lose e.g, mortgage, cars, retirement funds
Workers in this age group have much less potential to change careers
Workers in this age group might have to accept a move to a lower pay and status job in order to sustain themselves and their families
They compete with younger workers who will work for less in order to gain experience
They might have children who depend on their parents for income, housing, and college tuition.
Career workers 45 and over are largely earning more than their younger counterparts. They also tend to have much more tied to that income, and more people relying on them for financial security. When that income suffers, so do their children, and their local economies. There are thousands of stories of late career unemployment found on Unemployedworkers.org, like Patrick from Illinois:
“I’ve been unemployed for 21 months. I’m 45 years old, married with 2 children 9 & 1 years of age. I was told over the phone by a staffing agency that employers are skipping over people who have been out of work more than 6 months. Now that makes me think that companies are skipping over me as well.
I worked for 24 straight years until I was laid off from my job. Now I face the prospect of losing everything in 2 months when my unemployment insurance will be exhausted.”
Patrick is just like one of the millions of workers who has gone for months without employment, with a family who depends on his income for financial stability. With two and a half decades of experience, it’s sobering that companies aren’t jumping at the chance to hire him. This however, is a symptom of yet a larger problem.
Why Are Experienced Workers Not Getting Jobs?
While too few in number, jobs are being created. Surely the most experienced workers should be the first to re-enter the workforce. Their skill and experience make them a vital asset to the framework of a company, especially given the productivity and efficiency companies are requiring of their workers. Companies are now doing more with less; less personnel functioning to deliver more results. Experienced workers require less time for training, saving a company time and money. Here is the central question when the job market shows improvement: Why aren’t our nation’s experienced workers getting jobs? Experienced workers are a boon for companies and the economy alike. When they achieve stable employment, they spend more, and they provide for their children who then go on to get an education and gain their own experience, thus completing the cycle of prosperity on which the U.S has built it’s world leading economy.
This post was contributed by Derrick Miedaner