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Thursday, December 3, 2009

Are Older Workers now competing for Jobs with their Grandchildren?

Interns Over 40 News Flash:(Washington DC)

Remember the line:"Its all about Jobs-,Stupid". Finally a Job Summit is underway with President Obama in Washington DC. As Many States continue to struggle with an unprecedented Industry restructuring and Layoffs. In Michigan over 70% of the auto industry jobs having Evaporated helping to create a current unemployment rate of 15.1%. The President meets with industy leaders, state and government officials to discuss how to get Americans back to work.

Questions they are asking and discussing include:
How do you keep and build a manufacturing base in United States?
How do we build long-term growth in Jobs?
What Jobs are for the future?
How do we re-train our workers?

As reported in September on the Whitehouse website from the Office of Management and Budget" the percentage of the population between 2007 and 2009 that is working into their 50 and 60's is increasing. This is putting additional burden on the current severe job shortage.

"Labor force participation among older workers has been on the upswing over the past decade—reflecting a number of factors, including better heath, changes in kinds of work and work patterns, and shifts in employer pensions from defined benefit to defined contribution and a decline in employer-provided retiree health insurance. These factors may be particularly important for the traditional "early retirement" group, ages 62-64.

Second, the current pattern could reflect declines in the value of retirement assets. With the shift away from defined benefit and towards defined contribution pensions like 401(k)s, changes in financial markets have a more direct effect on many workers’ retirement savings. With a smaller nest egg, older workers may thus have decided that they cannot yet afford to retire.

Finally, both the employment rate and the unemployment rate for workers over 65 have increased across the current downturn (this is in contrast to younger age cohorts, who have seen employment rates hold steady or decrease as unemployment has increased). This suggests that not only are older workers working longer, but some older workers are choosing to remain in the workforce through a period of unemployment and search for a new job—perhaps for the reasons discussed above—when older workers in the past may have transitioned out of the labor force. (Since the unemployed are counted as part of the labor force, the rise in the unemployment rate plays an important role in explaining the overall increase in labor force participation among older workers.)

Whatever the explanation, the bottom line is that we expect the overall unemployment rate to remain stubbornly high even if economic activity itself picks up steam. But the interesting differential between older and younger worker participation is one that merits a closer look – and may help us understand better how the labor market works."

So does this mean you are now competing with your grandchildren for jobs? Perhaps!.

1 Post a Comment :

Jim said...

We have to adjust expectations on when retirement starts. With the benefits of higher age expectancy and better health come the responsibilities of being productive longer.

Being "put out to pasture" at 65 used to make sense when that was the extent of life expectancy. Now, retirement at 65 is at least 7-10 years too soon for 50-65 yr olds and 10-20 yrs too soon for those aged 30-50.

Socially and intellectually stimulating work is the greatest hedge against physical and psychological disease. It is also the most effective solution for looming SS/Medicare insolvency, as well.

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