If Junior can’t get a job, blame Grandpa.
Battered retirement investments have led older workers to stay in, or re-enter, the workforce. And the situation has caused a shift in the average age of workers, with the percentage of young people dropping to the lowest level since the U.S. Bureau of Labor Statistics started keeping track in 1948.
At this point, the percentage of people older than 65 in the workforce is at its highest rate since 1965, with almost 2 million older workers entering since the start of the Great Recession. There are now almost 7.7 million workers older than 65, or 18.5 percent of the workforce. That’s 2 million more than the teenage cohort of workers.
It’s not just the younger seniors who are still punching the time clock. The number of workers older than 75 has never been higher, with 7.8 percent of that age group in the workforce, nearly double the percentage from 1987, when the government starting keeping track. There are now 1.4 million people 75 and older in the workforce.
Dennis Jacobe, chief economist for Gallup Inc. in North Carolina, said his organization has been tracking the same trends and working to understand what’s going on.
“There are a couple of different factors,” he said. “After the recession and financial crisis, a lot of older Americans lost their retirement nest eggs.” Those workers don’t have the time needed to recover their investments, so they have to go back to work.
“Retirement, in a way, has changed,” Jacobe said. “The old way was you clip coupons, sit on the beach and enjoy your retirement.”
Now more people are healthy later in life and able to work, so their retirements are spent working part-time jobs that leave them able to take time off to travel but also give them something to do and a paycheck when they return home.
The part-time jobs they desire, though, are a hot commodity with younger workers.
In a recent survey by Gallup, the company found 32 percent of 18- to 29-year-olds were underemployed in April.
The Bureau of Labor Statistics reported that the percentage of the youngest workers, ages 16 to 19, who are working or even trying to get a job, fell to 31.8 percent in April. That’s down from an annual rate of 41.3 percent in 2007, before the most recent recession. And the percentage of teens working is far off the annual rates of 51 to 57 percent that the country saw in the 1980s and 1990s.
Some of that might be by choice.
In the upper socioeconomic groups, a summer job isn’t as important as it once might have been, said John Challenger, CEO of the Chicago-based outplacement firm Challenger, Gray & Christmas Inc.
In past decades, teens would mow lawns or work a retail job for pocket money, but now, he said, “Many teens don’t want that. They want to go to camp or a summer program or take an internship.”
He said there is more pressure to build a resume for college applications so teenagers are looking for experiences that have a cache that a summer job does not.
The 20- to 24-year-old demographic is taking jobs that were once the province of teenagers. Those were the jobs, he said, that taught young people the foundations of working, such as showing up on time and being reliable.
“It’s a tragedy,” Challenger said. “If you don’t have those beginning jobs, it’s harder to build a working life foundation.”
While young people may need jobs to learn responsibility, employers still struggling in a tough economy often aren’t in the mood to teach them.
Older workers, Jacobe said, tend to be more reliable.
“From a business point of view, you’re getting a person with more experience,” he said.
Older employees already know that they have to be at work on time and do the work.