How Is the Recession Affecting Older Workers?

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Abstract

With nearly 300,000 Americans age 65 and older out of work, the recession is hitting older workers hard. Old-age unemployment rates are increasing more rapidly than in most previous downturns. This fact sheet provides the latest numbers on the employment situation for older Americans.

How Is the Recession Affecting Older Workers?

The overall unemployment rate, now 6.7 percent, reached a 15-year high in November 2008. More than 10.3 million Americans were out of work last month, according to Bureau of Labor Statistics (2008) data, and 2.2 million private-sector nonfarm jobs have disappeared since the current recession began in December 2007. Some analysts, including those at Goldman Sachs, expect the unemployment rate to reach 9 percent by the end of 2009.

Unemployment Rates at Older Ages Are Growing

• Last month 298,000 adults age 65 and older were unemployed, about 50 percent more than in December 2007. The November 2008 unemployment rate for adults age 65 and older was 4.6 percent, up from 3.3 percent in December 2007 (figure 1).
• By contrast, 12 months into the severe 1981–82 recession—the most recent downturn to have lasted as long as the current one—the number of unemployed older adults had not increased at all.
• The age-65-and-older unemployment rate peaked during the current recession at 4.7 percent in August and September 2008, the highest rate in more than 30 years.
• Unemployment rates are lower at older ages than at prime working ages (25 to 54), partly because older workers often drop out of the labor force when they lose their jobs and thus are not considered unemployed. This gap has narrowed over time, however, averaging 0.6 percentage points between January 2005 and November 2008, compared with 3.4 percentage points 25 years ago (between January 1980 and November 1983).
• The recession has not yet discouraged many older job seekers. Since December, the share of adults not in the labor force has declined at ages 55 to 64 and at ages 65 and older.

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