Economic Trends
The Employment Picture, October 2008—Mostly Grim News for Older and Younger Workers
Research Report
Sara E. Rix, Ph.D., AARP Public Policy Institute
November 2008
Ten million people, including 1.3 million aged 55 and older, were unemployed in October. Workers aged 55 and older experienced one of the sharpest increases in unemployment of any age group between September and October. Duration of unemployment and long-term unemployment also increased, particularly among the older unemployed.
October brought more bad news to the economy and the nation's workers. Nonfarm employment fell by 240,000, with all industries except education and health services and government experiencing a decline (Table 1).
| Industry | September 2008 | October 2008 | Change |
| Nonfarm employment | 137,139 | 136,8992 | -240 |
| Goods-producing** | 21,284 | 21,152 | -132 |
| Construction | 7,118 | 7,069 | -49 |
| Manufacturing | 13,370 | 13,280 | -90 |
| Service-providing** | 115,855 | 115,747 | -108 |
| Retail trade | 15,230 | 15,192 | -38 |
| Professional and business services | 17,815 | 17,770 | -45 |
| Education and health services | 18,981 | 19,002 | 21 |
| Leisure and hospitality | 13,618 | 13,602 | -16 |
| Government | 22,473 | 22,496 | 23 |
| **Includes other industries not shown separately. Source: Bureau of Labor Statistics, The Employment Situation: October 2008, Table A, available at http://www.bls.gov/news.release/archives/empsit_11022007.pdf, p. 2. | |||
Top of Page10 million people, including 1.3 million persons aged 55 and older, were unemployed in October. Unemployment rates rose for all age groups. For various reasons, including the fact that unemployed older workers often drop out of the labor force and are thus not counted as unemployed, the unemployment rate for older persons tends to be lower than that for younger people. This remained the case in October (Figure 1). The October unemployment rate for the aged 55 and older labor force stood at 4.5 percent. It was 5.5 percent for those aged 25–54 and 6.5 percent for the labor force as a whole.
Despite their lower unemployment rate, workers aged 55 and older experienced one of the sharpest increases in unemployment of any age group in October (Figure 2), comparable only to the increase for persons aged 25–34.
Once they become unemployed, it takes older workers longer to find a new job. Long-term unemployment and duration of unemployment both rose in October. Nearly one in three (31.6 percent) unemployed workers aged 55 or older had been without a job for at least 27 weeks, up from 27.5 percent in September, an increase of nearly 15 percent. Long-term unemployment increased by about half as much among those aged 25–54 (from 24.2 percent to 26.0 percent).
Average duration of unemployment for jobless persons aged 55 or older was 25.9 weeks in October, more than four weeks longer than that for unemployed workers ages 25–54. The increase in average duration over September was also greater for the older unemployed—3.6 weeks (or 16.1 percent) longer vs. 1.4 weeks (or 6.9 percent) longer.
Relatively few persons of any age who are not in the labor force are classified as discouraged workers according to the criteria established by the Bureau of Labor Statistics. Younger people are actually more likely than their older counterparts to be discouraged about their job prospects. For example, of all persons interested in a job but not in the labor force, 12.3 percent of those aged 25–54 and 9.6 percent of those aged 55 or older could be classified as discouraged in October. The increase in the percentage of discouraged workers since September, however, was substantially greater for the older segment—from 7.6 percent for those aged 55 and older (a 26.3 percent increase) and from 11.1 percent for those ages 25 to 54 (a 10.8 percent increase).
As bleak as the picture was for both older and younger workers and jobseekers in October, at least one statistic was on the positive side. Even as number without jobs has increased—and especially sharply in the case of older persons in October (Table 2, first panel)—the number of older persons with jobs showed a slight increase as well (Table 2, second panel). This has not been true for younger persons.
| Age | October 2007 | September 2008 | October 2008 | % Change Oct. 07-Oct. 08 | % Change Sept.08-Oct. 08 |
| Unemployed | |||||
| Total,16+ | 7,291 | 9,477 | 10,080 | 38.3% | 6.4% |
| 25-54 | 4,011 | 5,465 | 5,712 | 42.4% | 4.5% |
| 55+ | 841 | 1,162 | 1,276 | 51.7% | 9.8% |
| Employed | |||||
| Total,16+ | 146,016 | 145,255 | 144,958 | -0.7% | -0.2% |
| 25-54 | 100,332 | 99,236 | 98,895 | -1.4% | -0.3% |
| 55+ | 25,960 | 26,856 | 27,048 | 4.2% | 0.7% |
| Source: Bureau of Labor Statistics, Employment and Earnings, November 2008, Tables A-8 and A-9, available at http://www.bls.gov/web/cpseea8.pdf and http://www.bls.gov/web/cpseea9.pdf. | |||||
As Figure 1 highlights, the unemployment rate for U.S. workers has increased fairly steadily over the past 12 months, and it is likely that it will continue to increase, at least over the short run. Many of these workers are collecting or will collect Unemployment Insurance (UI), which provides up to 26 weeks of income support to workers who have lost their jobs. An Extended Benefits program pays benefits for an additional 13 weeks to laid-off workers who have exhausted their regular UI benefits in states experiencing high unemployment.
Although the majority of UI beneficiaries do not collect benefits for the full 26 weeks—the average duration of receipt was 15.3 weeks in the second quarter of 2008—a sizable minority do exhaust their benefits. Just over 37 percent had done so in the second quarter of 2008. This figure has also been rising.
If the economy does not improve soon, growing numbers of workers are likely to exhaust their unemployment benefits before they can find a new job. Therefore, it is critical that Congress extend unemployment insurance protection soon: AARP has recently renewed its call for an immediate extension of unemployment benefits for jobless workers.
Footnotes
1 All employment and unemployment statistics are from the labor force data released by the U.S. Bureau of Labor Statistics on November 7, 2008. Unemployment Insurance data are from the Unemployment Insurance Data Summary produced by the Employment and Training Administration of the U.S. Department of Labor.
2 The employment totals in Table 1 and Table 2 vary. Table 1 refers to establishment data from private nonfarm businesses as well as federal, state, and local entities. Table 2 uses data from a household survey of persons that includes agricultural workers, the self-employed, unpaid family workers, private household workers, and persons on unpaid leave; these groups are not included in the establishment survey. There is no age limit in the establishment survey; the household survey includes persons aged 16 and older. There is no duplication of individuals in the household survey; individuals are counted only once. In the establishment surveys, persons working at more than one job—and therefore on more than one payroll—would be counted for each payroll.
Written by Sara E. Rix, AARP Public Policy Institute
November 2008
©2008 AARP
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