The job market for older workers is even tougher than commonly believed.
That’s the word from the Schwartz Center for Economic Policy Analysis at the New School for Social Research, which has begun issuing “Older Workers at a Glance,” a report of key labor market statistics for workers over 55 as a supplement to its monthly analysis of market trends.
According to the report, the Bureau of Labor Statistics reported a historically low headline unemployment rate for older workers of 3.5 percent in August, a figure used as evidence bolstering a claim that people can continue to work if they have inadequate retirement income.
However, it says that the official unemployment rate overstates the strength of the labor market for older workers. It points out that “an increasing share of older workers are in ‘bad jobs’” that pay less than two-thirds of the median wage, which stood at $880 per week in August. In July of 2016, the report said, 29.1 percent of older workers held such “bad jobs,” compared with 27.0 percent in July 2006.
Median wages for older workers “have been flat for decades,” the report said, and stagnation “makes it harder to save for retirement because workers wanting to increase saving must cut current consumption rather than merely forego increases in consumption.” That makes saving difficult even if employers offer retirement plans.
There’s also the factor of labor force participation, which has increased “substantially” for women aged 55-64 in the last several decades, according to the report. However, the labor force participation of men in that age category “declined until the early 1990s and then increased somewhat” — but that increase has obscured the decrease of labor force participation among older men who lack college educations. That pushes them out of the labor force with retirement savings that are inadequate to pay their expenses during retirement.
In addition, the report said that 51 percent of older workers have no pension and that “[a]t any point in time, less than half of full-time private sector workers participate in a retirement plan, mostly because their employer does not sponsor a plan."
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