A casual reader of the news in late May might easily conclude that the concern about unemployed older workers has lifted: Two studies from widely respected institutions both reported that labor participation rates rose among people 65 and older.
Both statements are absolutely correct — the numbers were crunched by the Urban Institute for 2008-2011 and the Government Accountability Office for 2007-2011. However, when you dig deeper, you discover that there are more older workers now because they need the money after the values of their homes and retirement savings plummeted. It also takes them much longer to find a job which often pays much less than their previous position.
The data confirm what AARP and AARP Foundation have been saying since the economy tanked in 2008. Older workers who lost their jobs spent a lot more time looking for work than any other age group. Nearly half of the unemployed ages 25-34 found a new job within six months, and those 35-49 within seven months. But it took more than nine months for those 50-61 to find work.
There are other ominous findings, too. In a comparison of men who had been on the job the same length of time, those in their 50s were more likely to lose their job than those in their late 20s and early 30s. And when workers ages 50-61 did find a job, their median hourly earnings were 21 percent lower than in their previous job.
People 62 and older who lost their jobs fared the worst. Just a third found a job within a year of becoming unemployed, and only 41 percent found a job after 18 months. One reason these numbers are so bad is that when people out of work turned 62, about half of them gave up their job search and opted for early Social Security benefits instead. That might sound like a lifeline, but if you get Social Security when you're 62, you get 25 percent less than you would if you waited until you reach the full retirement age of 66. Over the average American's increasingly long lifetime, that lost 25 percent can make a real difference in quality of life — especially for the 23 percent of the population for whom Social Security is their only income.