A Bloomberg columnist highlighted what we’ve been seeing in the job market, but no one wants to openly talk about: “people 55 and older [are] leaving the labor force.”
The number of people over the age of 55 who are participating in the workforce is down by 2 million, compared to pre-pandemic levels. The Great Recession of 2008 didn’t even result in this huge of a loss of senior, experienced workers.
What’s worse is “many older workers that lost jobs during the pandemic won’t be back.” During the dark, early months of the outbreak, over 20 million Americans lost their jobs in a few months’ time. As the economy tortuously tried to claw back jobs over the last 10 months, the United States has added “2.7 million jobs for workers under the age of 55,” since August and a meager 28,000 people over 55 years of age and older.
Interestingly, the loss of this segment of the populations skews the real unemployment data. As older workers are pushed out of the job market due to lack of opportunities, there are less workers, which makes the unemployment rate look better.
There is a trend, which started prior to Covid-19, that has picked up momentum during the pandemic. People who are in their mid to late 30s and older appear to be victims of ageism. To be fair, it’s complicated. The compensation factor comes into play. Seasoned employees tend to earn more money than their younger co-workers. In a belt-tightening environment, companies desire to cut costs and save money. It’s expedient to achieve this goal by letting go of a 55-year-old and hiring a person in their 20s or early 30s, who would be paid far less money.
There are other corporate trends that serve to harm older workers, including the culling of middle-management positions. As mid-level jobs are cut, higher-paid workers find themselves unemployed. A large segment of this population are workers with more than 20 years of experience who are generally in the 45-years and older category. These positions are restructured to attract younger, less compensated workers. This process of juniorization of jobs has squeezed out older people in favor of the young.
Anyone who’s been actively searching for a job has likely noticed that advertisements call for candidates with only about three to five years of experience. It’s rare to read a job listing that specifically calls for an applicant with more than 30 years of relevant experience. The liberal usage of lower-end titles, such as “associate” or “analyst,” coupled with the requirements of certain technologies, software and systems, seem to say that veteran workers need not apply.
Jobs have steadily been moved to lower-cost states in the U.S. and to other countries. It’s a salary arbitrage. The position that was once based in New York City or San Francisco is now located in a city or country that is less expensive. The salary offered would be much lower. An experienced person may elect not to move her family across the country to take a job that’s about 40% lower compared to what she’s earning. Eventually, her job would be eliminated and replaced by a lesser-paid person in the other location.
Remote work has become standard during the pandemic. Seizing an opportunity, major corporations, like Twitter and Facebook, have said that they’ll hire talent from anywhere. The reality is that it’s highly likely that they’ll look for the best people who happen to live in inexpensive places and are younger, so that they could pay them less compared to their older peers.
The cruel confluence of corporate cost-cutting, relocating positions, juniorizing roles and downgrading job descriptions, coupled with unspoken ageism, creates a crisis for older workers.
Baby Boomers have had a great run. In their post-World War II era, America was the dominant economy in the world, as countries—particularly in Europe—were rebuilding from the carnage and destruction caused by the war. With a high school degree in hand, you were able to get a solid job with benefits, pension and accessibility into the middle class. It was a prime time for the American Dream—a nice suburban home with a white-picket fence, couple of cars and a steady, secure job and paycheck.
The 1987 stock market crash, dot-com boom and bust, aftershocks of Sept. 11, the Great Recession and current pandemic have wreaked havoc on the finances of many of the Baby Boomers. According to MarketWatch, “Millions of Boomers in their 60s still want or need to work, and are having a hard time finding jobs.” It is reported that “some 21.2 million Americans in their 60s are no longer in the labor force.”
To add insult to injury, many older people lack the money needed to sustain them in retirement, especially as life expectancy has increased. The Federal Reserve Bank reports roughly 44% of Americans say their retirement savings are not on track and 25% aren’t financially protected with pensions or sufficient retirement savings.
The absence of company-sponsored pensions, along with insufficient savings to retire, questions surrounding the long-term viability of Social Security and accusations of bias against older workers all point to a scary, uncertain future for older workers.
Since we will all one day reach this age demographic, it seems logical that attention should be paid to this important growing dilemma.