Older workers (over 55) are out of work an average of 35 weeks or 5 weeks longer then those workers under 55 year olds. This type of high unemployment rate may have longer term social consequences.
May 2, 2010
Most economists say that jobs have been growing this spring -- estimating that employers have added about 175,000 more workers than they cut in April.
The Labor Department is expected to confirm that growth Friday when it issues its monthly employment report. And that would reflect an encouraging trend, with the number of new jobs rising from 162,000 in March.
Still, a healthy labor market would remain a long way off. With 15 million people out of work, the U.S. economy would have to be adding hundreds of thousands of jobs each month to significantly reduce this year's unemployment rate. The March jobless rate was 9.7 percent -- and economists don't expect much, if any, improvement in the April rate.
For many baby boomers, the labor market remains especially tough. In this recession, the unemployment rate for people 55 and older hit 7.2 percent, the highest level ever recorded in the post-World War II era for workers in this age group.
Although the jobless rate is lower for older workers than the overall population, the duration of unemployment is much longer. Among unemployed people over age 55, the average length of time out of work exceeds 35 weeks. For unemployed workers who are 25 to 54 years old, the time out of work averages just over 30 weeks.
A recent study by the Pew Economic Policy Group showed that nearly 1 out of every 3 unemployed older workers has not seen a paycheck in more than a year. The report found that "once older workers become unemployed, they are more likely than younger workers to stay unemployed for a long period of time."
Because of the difficulty of finding new jobs, many baby boomers are giving up and declaring themselves retired. Government data show that nearly 3 million people started drawing Social Security retirement benefits last year, a significantly higher number than the agency had been expecting.
Boomers include the roughly 75 million Americans born between 1946 and 1964. The oldest members of this cohort are now eligible to collect the minimum Social Security retirement benefits, available at age 62.
The lack of job opportunities for older workers could have a big impact on the federal budget. Typically, older workers are at their peak income years -- and pay their highest taxes. So if large numbers of them switch from paying taxes to collecting benefits, they could widen the budget deficit.
In a conversation with NPR last week, U.S. Treasury Secretary Tim Geithner said government policy can't focus on creating job opportunities specifically for older workers. Instead, it must foster the conditions that can improve the employment outlook for every age group.
"Governments don't create jobs, fundamentally," Geithner said. "What governments do is create the conditions in which you can have a stronger private sector come back and create more jobs."
by Marilyn Geewax: NPR
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