Senior Unemployment Rate Hits 31-Year High

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Abstract

Unlike most previous recessions, the current economic slowdown has substantially increased the unemployment rate for older Americans. In December 2008, 5.1 percent of workers age 65 and older were unemployed, a higher share than at any time since March 1977. This factsheet provides the latest information on the employment situation of older Americans.

Introduction

The overall unemployment rate, now 7.2 percent, reached a 15-year high in December 2008. More than 11.1 million Americans were out of work last month, according to Bureau of Labor Statistics (2009) data, and 3.8 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 326,000 adults age 65 and older were unemployed, 60 percent more than in November 2007. The December 2008 unemployment rate for adults age 65 and older reached 5.1 percent, a 31-year high .
• The age-65-and-older unemployment rate has increased by 1.7 percentage points since November 2007, the last month before the current recession began.
• By contrast, 13 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.
• 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 December 2008, compared with 3.4 percentage points 25 years ago (between January 1980 and December 1983).
• The recession has not yet discouraged many older job seekers. Since November 2007, the share of adults not in the labor force has not declined at ages 55 to 64 or at ages 65 and older.

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