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Jobless Rate for Older Workers Dips in October

But long-term unemployment, forced retirement are concerns for out-of-work adults 55 and over

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The unemployment rate for adults age 55 and older dropped to 5.4 percent in October, suggesting that the nation's economic recovery slowly continues, according to data the U.S. Bureau of Labor Statistics (BLS) released Friday. But older workers still face significant challenges finding jobs during the coronavirus pandemic, especially as the ranks of the long-term unemployed continue to grow, experts say.

In September the unemployment rate for this age group was 6.7 percent, which means their jobless rate has steadily declined from historic highs earlier this year, when businesses temporarily shut down to deter the spread of the novel coronavirus. After employers added 638,000 jobs during October, the nation's overall jobless rate was 6.9 percent for the month, down from 7.9 percent in September.

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The decrease in the unemployment numbers is a sign of encouragement for people who are looking for work, but that statistic by itself may not paint a full picture of whether jobs are really returning. For example, the pandemic has already lasted so long that people who lost their positions earlier this year are moving into a group the BLS calls long-term unemployed, meaning they have been out of work for 27 weeks or more. And that group grew by 1.2 million in October — to a total of 3.6 million nationwide.

That number is particularly significant for older adults, who have faced longer periods of unemployment during previous economic slowdowns.

2020 Jobless Rates for Older Workers

The unemployment rate for people 55 and older during the pandemic peaked at 13.6 percent in April and has dropped steadily since then.

  • October: 5.4 percent
  • September: 6.7 percent
  • August: 7.7 percent
  • July: 8.8 percent
  • June: 9.7 percent
  • May: 11.8 percent
  • April: 13.6 percent
  • March: 3.3 percent
  • February: 2.6 percent
  • January: 2.6 percent

"It seems like we are transitioning from a pandemic recession to a typical recession,” says Siavash Radpour, associate research director for the Retirement Equity Lab at the New School's Schwartz Center for Economic Policy Analysis. “I expect a much slower recovery and long-term unemployment, especially for older workers, who have a more difficult time finding new jobs. Our numbers show that older workers are still more likely to lose their jobs compared to midcareer workers."

According to a recent analysis from the Retirement Equity Lab, for the first time in 50 years, older workers lost jobs at a higher rate than people a few years younger. During the first six months of the COVID-19 crisis, workers 55 and older were 17 percent more likely to be laid off than employees between the ages of 35 and 54. If the job-loss rate for older Americans had simply matched that of their slightly younger peers, roughly 1 million older adults would have kept their positions this year.

Long-term unemployment can derail retirement plans

Another consequence of long-term unemployment for older adults is that many of them decide to retire involuntarily simply because they can't get hired.

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"Not surprisingly, the longer individuals remain out of work, the more likely they are to drop out of the labor market entirely,” says Jennifer Schramm, a senior strategic policy adviser at the AARP Public Policy Institute. “The depth of the current downturn looks likely to lead to a sharp rise in long-term unemployment, especially among the 50-plus, and may force some to leave the labor market sooner than planned."

Unplanned early retirement can have a severe impact on the finances of those who would be building their savings if they could continue to work. That means that when older adults worry about the coronavirus pandemic, they may be thinking about more than just their health. In a recent Bankrate survey, 47 percent of Americans ages 50 to 64 said the coronavirus was one of the biggest threats to their personal finances in the months ahead, according to Mark Hamrick, Bankrate's senior economic analyst.

"Many older workers don't have sufficient retirement savings,” Radpour observes. “They didn't have the chance to save enough for retirement and are hoping to work longer to make up for it. Now many have lost their jobs. Not only are they not saving anymore, but they have to dip into their savings to survive."

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