The latest employment data show that many older workers, who face pressures to work longer because they have little in savings, also encounter obstacles to working longer in the labor market. The overall labor market outlook for older workers is improving. But older workers in population groups that typically face greater insecurity in retirement, and thus may need to work longer, are also the ones that face greater obstacles to finding a job and working longer.
The good news is that on average the employment situation for older workers is improving. The unemployment rate for workers 55 years old and and older stood at 3.1% in August 2018, the same as in the previous month, and slightly down from the 3.2% in August 2017. The employed share of older workers, those 55 years old and older stood at 38.9%, the same as last month and slightly up from the 38.8% recorded for August 2017.
Unemployment rates for older workers, though, paint a misleading picture. Older workers after all tend to stay unemployment much longer than younger workers and as a result may give up looking for a job all together. The average length of unemployment for people from 55 years old to 64 years old was 34.5 weeks and for people 65 years old and older it was 29.8 weeks. In contrast, workers younger than 35 years, for example, had an average length of unemployment of less than 20 weeks. The fact that older workers remain unemployed much longer than younger workers also suggests that many older workers will simply give up looking for a job, thus masking the true labor market struggle for older workers.
Digging further below the surface, the data also show substantial differences in older workers’ labor market experiences by race, age and gender. The unemployment rate for African-American workers 55 years old and older, for example, was 4.7% compared to 3.1% for whites – a gap of more than 50%. Similarly, workers from 55 years old to 64 years old had an unemployment rate of 3.0%, while workers from 65 years old to 69 years old had an unemployment rate of 4.2% in August this year. In fact, the unemployment rate for workers from 65 years old to 69 years – presumably one of the groups most likely to face pressures to work longer due to low savings – saw their unemployment rate increase from just 3.0% a year earlier. And, while women and men 55 years old and older had similar unemployment rates with 3.1% for women and 3.0% for men in August 2018, only 33.7% of women in this age group were employed compared to 45% of men.
More older workers are working, but many remain unemployed or underemployed. Those workers, who typically have disproportionately less wealth and thus may feel pressures to work longer, typically face greater obstacles in the labor market than those who are on average better prepared for retirement. Working longer, therefore, is still not an adequate solution to the retirement crisis.