If the value of his house and his stock portfolio weren’t so shaky, Orville Teising, 67, wouldn’t be out looking for work.
Having retired after a career in sales but with a nest egg shrinking significantly, “my wife, Rochelle, and I don’t have enough money to stay in our house indefinitely,” says Teising, who lives in Mill Valley, Calif. “Those savings, which we were planning to live on in our 80s, declined by 30 percent last year, so my wife’s now back to work as a psychotherapist, and me, I’m out looking. But it’s not that easy.”
In fact, the unemployment rate for Americans over 55 is at a record level. Thousands of older Americans are losing their jobs, and many others want to either keep working or get back in the job market as their financial insecurity soars.
Sara Rix, a policy analyst for AARP, said the organization’s recent research shows that workers are pushing back their expected retirement because of market losses. Many who once expected to retire at 62 now expect to work until at least 65.
A survey by the Conference Board, a nonprofit research group, shows that Americans over 55 have had their confidence in the economy shaken. In January 2008, its index measuring how confident Americans over the age of 55 felt about the future stood at 84.6. By last February, that figure had plummeted to 22.1, although it has since recovered some ground.
This sense of insecurity is making older Americans willing to work longer. In March 2001, before the first signs of the collapse of the Internet stock bubble, 32.8 percent of Americans above the age of 55 considered themselves part of the labor force—either working or seeking work. Today the comparable rate is 40.2 percent.
Over-55 Unemployment Rate Up
But the figures also bring more discouraging news. The Labor Department reported this month that the unemployment rate for people 55 and over in June was 7 percent, more than twice what it was a year ago. For men in that age group the jobless rate leaped to 7.7 percent, up from 7 percent the previous month; for women it was 6.4 percent, a sharp rise from May’s 5.8 percent.
Older Americans are not only losing jobs, but also finding it harder to get new ones. People ages 55 to 64 needed an average of 30.3 weeks to find a new job, longer than any other age group, according to the June employment report.
Yet even as older Americans increasingly scour the marketplace for jobs, economists have been surprised by the rapid pace at which employers have sliced the labor force. Many economists expect the national unemployment rate to soon top 10 percent.
What’s Behind the Surge in Unemployment?
Gad Levanon, senior economist at the Conference Board, cites these factors for the dramatic rise in joblessness:
• Increases in productivity allow employers to cut the number of workers more swiftly.
• There’s a growing trend of hiring temporary employees, who easily can be laid off or furloughed.
• The “cultural barrier” to layoffs is much lower than it used to be.
Economist Mark Zandi of Moody’s Economy.com notes that massive layoffs began last fall when, in the midst of a financial panic, many U.S. firms feared their companies would go bankrupt. “Literally, they felt it was a matter of survival,” he says.
Another reason unemployment has proved so stubborn is that companies tend not to hire new workers until they see clear evidence the economy is turning around. And the evidence for a strong recovery is not yet obvious.
“Employment is always slow to catch up with what is happening when we come out of the recession,” said John Challenger, CEO of Challenger, Gray and Christmas, a Chicago-based outplacement firm. However, Challenger notes that in the current recession “there really seem to be many, many people over the age of 50 who are stuck right now in the category of ‘long-term unemployed’—without work for more than 27 weeks. They really are struggling to find their way back into work right now, and the jobs just don’t seem to be there.”
Despite the gloom surrounding the job market, Teising isn’t giving up hope. “The market is not to going to recover and make up for the 30 percent we lost,” he said. “So I’m still determined to keep looking.”
Michael Zielenziger writes about the economy for Bulletin Today. He lives in the San Francisco Bay area.