Friday, April 15, 2011

No Respite From the Time Clock: A Bleak Future for Older Americans

A startling development has taken place in the U.S. employment picture. According to "Why The Middle Aged Are Missing Out on Jobs" these people (ages 45—54) are having a tough time finding jobs. In itself, that's not unusual as employers are more inclined to hire younger workers (and indeed this age group is experiencing gains in employment) . But the wild card in the deck is that competition is coming from another source: Seniors. Not only are more older employees staying on the job past retirement age, but they are more successful than their middle-aged counterparts in snagging new jobs that have come into existence since 2009 as well.  In other words, middle aged employees as a whole are losing  jobs faster than seniors are finding new ones.

But all this begs the question. Why are older people staying in the workforce beyond retirement age, such that they and their younger—but not that much younger—counterparts are competing with each other for jobs?  According to "Why The Middle Aged Are Missing Out...",  in 2001, 33% of seniors were in the workforce. In 2007, the figure was 39%.  It's unlikely that the size of the increase can be attributed to many more older folks' suddenly enjoying work so much that they don't want to retire.

For some time now middle age employees despite years of experience have faced being undercut and replaced by people in their twenties or early thirties. And as mentioned, when the former are displaced, they often have a hard time finding new positions often not only because of age discrimination but also because they came from a higher salary level than their younger and less experienced counterparts. So wouldn't it stand to reason that still older workers would face a similar hurdle?  Unfortunately, the article doesn't explain this anomaly.

My guess is that seniors are being chosen over middle-aged workers because they will work for less. Many older people  lost their nest eggs assets such as 401(k) investments in the Great Recession or otherwise lack the resources for retirement in the first place. But they do receive social security, which however by itself  is not enough to survive on. Hence they must stay in the labor force to make up the difference. I know if my wife and I had to repatriate, that would be our lot. We would most likely have to keep working until we drop dead in our traces.

However, many older workers, i.e. those in the age range of 55—62 years of age do not yet qualify for social security. But perhaps out of desperation, they are willing to work for less than their slightly younger counterparts. Regardless, it should never have come to the point that two vulnerable groups, the older and middle aged workers should be pitted against each other this way.  And both face the prospect of an uncertain future that people in this age range haven't encountered in many decades, at or near the point in their lives that they should instead be reaping the rewards from their years of service in the labor force..

It's an indictment of the American economic system that such a cruel state of affairs has come to pass.