Record number of Americans over age 55 in the workforce.
The number of people 55 and older holding jobs is on track to hit a record 28 million in 2010 while young people increasingly are squeezed out of the labor market, a USA Today analysis finds. The portion of people ages 16-24 in the labor market is at the lowest level since the government began keeping track in 1948, falling from 66% in 2000 to 55% this year. There are 17 million in that age group who are employed, the fewest since 1971 when the population was much smaller.
By contrast, people in their 50s, 60s or 70s are staying employed longer than at any time on record. For example, 55% of people ages 60 to 64 were in the labor market during the first 11 months of 2010, up from 47% for the same period in 2000.
The trend of older people working more and younger people working less is fundamentally reshaping the labor force and slightly easing pressure on government retirement programs. The pattern started before the recession hit in December 2007, partly the result of more women working, and has continued through the slowdown.
“What’s striking about this recession is that people 62 and older — those eligible for Social Security — are increasing their participation in the labor force,” says Richard Johnson, an economist at the Income and Benefits Policy Center of the non-partisan Urban Institute. All groups younger than 55 have declining shares of the population in the labor force.
Johnson says a change in economic incentives — such as raising the retirement age for full Social Security benefits and creating tax breaks — have made it more rewarding to work at an older age.
These trends are especially important because the first of 77 million Baby Boomers — the population bulge that happened from 1946 through 1964 — turn 65 next year.
That will make them eligible for government-financed Medicare and close to getting full Social Security benefits at 66.
Better health, longer lives and less physically damaging jobs have prompted people to work longer. But it’s not all good news.
“Most people work longer because they have to,” says Carl Van Horn, director of the Heldrich Center of Workforce Development at Rutgers University. “Many can’t afford to drop out of the labor market without severe financial implications.”
That can indirectly hurt young workers, he says. “There are only so many jobs to go around,” he says, and older workers have a job advantage that younger ones don’t: experience.
Via USA Today