GOOD READS

Behind the Spike in Seniors' Unemployment

In today's story on why older Americans are so happy at work, we focus on the results of a new Charles Schwab study that suggests about one-third of 60-something workers are so content at their jobs that they don't want to retire. In fact, three in four respondents between the ages of 50 and 69 said they are "sticking with their jobs because they want to," and not because they have to for financial reasons. That runs counter to the stereotype of older workers stuck in miserable jobs because they can't afford to retire.

But there's another category of 60-somethings who aren't so happy, and that is unemployed older workers. A new report from the Government Accountability Office zeroes in on the challenges of this group, and finds that many older Americans without jobs face financial instability. And it's often difficult for them to find jobs, even if they want them. Health problems, skill mismatches, and a tough labor market all contribute to the struggles of this group.

While unemployment rates have risen for all age groups, the GAO reports that for Americans age 55 and older, bouts of unemployment can last longer than for other age groups. In December 2007, the unemployment rate for older workers was 3.1 percent; in April 2012 it was 6 percent. Meanwhile, the median length of unemployment for older workers was 35 weeks in 2011, compared to 10 weeks before the recession. One in three unemployed older workers has been unemployed for over a year.

Such long periods of unemployment make it hard to stay financially solvent; many older workers aren't ready to retire, and don't have the retirement savings to do so. When they lose their jobs, they plow through their savings, further diminishing their retirement funds. Even if they are lucky enough to eventually return to the workforce, the GAO estimates that seven in 10 face lower earnings in their new jobs.

So what is keeping older workers from landing and keeping their jobs? After all, the Schwab study shows that older Americans still have much to contribute to the workplace. Focus groups led by the GAO suggest that it might come down to bias against older workers. Participants said they thought employers were reluctant to hire older workers, and that was the main obstacle in their path to finding new jobs. While law prohibits age discrimination, many older workers said they believed it was happening anyway.

The focus groups revealed that employers also fear the high healthcare costs of older workers, as well as the risk that older workers will be overqualified for positions and therefore will not do a good job. Some older workers might also lack technical skills required by computer-heavy jobs, or at least their potential employers might worry that they are not proficient on a PC.

As for the financial ramifications of such extended periods of unemployment, the GAO finds that unemployed older workers often face lower Social Security payments (because of fewer years worked) as well as lower retirement savings. (Social Security retirement benefits are based partly on workers' average monthly earnings over 35 years, and if a person works fewer than 35 years, then zeroes are entered and the entire average is brought down.) And if unemployed workers sign up for Social Security benefits early, at age 62, then they receive lower monthly payments until the day they die.

To counter some of these dismal financial ramifications, the GAO suggests considering temporary subsidies to employers who hire older workers who have been unemployed, or to encourage more training for older workers.

Although the GAO didn't mention it, a Don Draper-style image makeover campaign could also help older workers. If stereotypes about older workers' inability to use computers or eagerness to work are getting in the way of their financial solvency, then promoting the message that older workers are savvy, enthusiastic, and ready to work could help convince employers to take them on. Schwab's survey shows that older workers have valuable and relevant skills to share, and that they can be even happier at work than their younger counterparts.

Twitter: @alphaconsumer



More From US News & World Report

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
1
2
3
4
5
6
7
8
9
10

Latest News

  • Strides surges as Bangalore plant remains U.S. FDA compliant

    Reuters Market Eye - Strides Arcolab surges 6.3 percent after the drugmaker said on Friday its oral drug manufacturing facility in Bangalore continues to maintain compliance with the manufacturing standards of the U.S. health regulator. "U.S. FDA recently inspected this facility as part of GMP compliance audit and raised Form 483 (inspection observations) during the Dec 2013 inspection (which has now been satisfactorily closed)," Macquarie said in a note to its clients. This is a key positive …

  • French companies to continue investing around $1 bn in India

    New Delhi, April 25 (IANS) Expressing confidence in the Indian economy, French companies that are engaged in India will continue to annually invest nearly $1 billion here as they see long-term future in the country's growth potential, a top diplomat has said. "I expect the investment trend of nearly a billion dollars to continue as the French companies are here for the long-term and are setting up their base here and expanding production," French Ambassador François Richier told IANS in an …

  • `India needs over 26,000 independent directors'

    Kochi, April 25 (IANS) India needs over 26,000 independent directors and around 2,500 women directors to fill the boards of companies across the country, an official said here Friday. Lt. Gen (Retd) J.S. Ahluwalia, president of the Institute of Directors, said that despite a handful of high profile female Indian entrepreneurs, the proportion of female directors is a meagre 5.2 percent, which is even below the developing world percentage of 7.2 percent. Ahluwalia's statement comes at a time …

  • India's growth prospects dim regardless of election outcome - Reuters  …

    Prospects for a strong economic rebound in India are dim as industry remains weak, and although a business-friendly opposition party looks likely to form a new government, its ability to pass sweeping reforms is in doubt, a Reuters poll showed. An anticipated victory for the Bharatiya Janata Party's (BJP) at the conclusion next month of an ongoing election in the world's largest democracy has pushed India's stock market to a record high. Anubhuti Sahay, senior economist at Standard Chartered …

  • World shares, dollar struggle on Ukraine anxiety

    Heightened tension in Ukraine pushed world shares lower and lifted safe-haven European bonds on Friday, taking the shine off what looked set to be an earnings and M&A-driven week of gains for European and U.S. stocks. Trouble in Ukraine escalated after Ukrainian forces killed up to five pro-Russia separatists on Thursday and Russia conducted military drills near the border, raising fears it was gearing up to invade. European shares tumbled 0.5 percent in early trading as concerns also rose …

IN-DEPTH ANALYSIS & INTERVIEWS

  • Too good to be true?

    Developers are offering lucrative buyback schemes. But such promises may not be always kept. …

  • Leaderspeak with Vikram Limaye

    Vikram Limaye MD & CEO, IDFC Ltd shares many firsts from his life. …

  • The Greening of the House of Tatas

    How a dedicated team converted a 90-year-old heritage structure into a benchmark for environment-friendly buildings. …

  • Appy Voting

    Mobile and online apps, seeking to inform or influence voters, have been more active than ever before in this election. …

  • In the crosshairs

    Why the future of FDI in multi-brand retail looks bleak after the polls. …

  • Deserving the honour

    How do the winners of the two new banking licences - microfinance lender Bandhan Financial Services and infra institution IDFC Ltd - measure up to the challenges of operating as full-fledged banks? …

  • A Samurai from Chandigarh

    Advertising veteran Sandeep Goyal is disarmingly frank as he recounts his years with Dentsu. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    23.50-0.35-1.47%
    ASHOKLEY.BO
    16.46-0.06-0.36%
    UNITECH.BO
    129.00+8.60+7.14%
    FRL.BO
    75.90+3.60+4.98%
    HDIL.BO
    116.700.000.00%
    IDFCSL.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    12.51+2.00+19.03%
    BIBCL.BO
    548.00+82.00+17.60%
    STRIDES.BO
    31.95+4.10+14.72%
    STOREONE.BO
    163.30+19.60+13.64%
    AGARIND.BO
    261.45+31.40+13.65%
    VIVIMEDLABS.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    -10.95-100.00%
    4THGEN.BO
    -17.30-100.00%
    ALFAICA.BO
    -17.65-100.00%
    AMAL.BO
    -12.31-100.00%
    BORAX.BO
    -29.95-100.00%
    BRADYM.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.