Sunday, March 17, 2013

Over 50 and Unemployed: Only 9% Find Work

The Boston Fed has found that the job market looks normal for people who have been out of work for less than 6-months, but horribly dysfunctional for people who have been out of work longer than that.

And it doesn't matter how old you are, or what industry you're in --- or even how much education you have --- the only thing that matters, as far as employers are concerned, is how long you have been unemployed. So the long-term unemployed are at the back of the jobs line. And it's quite a long line.

According to the Center on Budget and Policy Priorities, 8.7 million jobs were lost between the start of the recession in December of 2007 and when the unemployment rate had peaked by October of 2009 --- when the unemployment rate was at 10.2 percent --- when a total of 15.7 million Americans were reported unemployed.

Since then, job growth has barely managed to keep pace with natural population growth --- according to the Bureau of Labor Statistics, about 5,400,181 jibs were created --- which is essentially about how many high school and college graduates we've had first entering the work force (about 6 million as of 1½ years ago).

According to a study by the Government Accountability Office released early last year, seniors have especially experienced consistently longer periods of unemployment than younger workers, as employers seek cheaper labor and look to skirt potentially higher health care costs.

The unemployment rate for workers age 55+ more than doubled since December 2007 when nearly two million older workers were seeking jobs. At that time, Americans 55 and older who were unemployed had been seeking work for an average of 51 weeks (I will assume it's been much longer since then).

Economists Dena Baker and Kevin Hassett, in an op-ed piece for the New York Times, reported that while older workers were less likely to be laid off during the recession than younger workers [maybe because of in-house union seniority], if they were laid off, older workers are about half as likely to ever be rehired again --- and they had seen the largest proportionate increase in unemployment during the economic downturn --- when the number of unemployed people between the ages 50 and 65 had more than doubled.

Baker and Hassett also reported that "a worker between ages 50 and 61 who has been unemployed for 17 months has only about a 9 percent chance of ever finding a new job...and a worker who is 62 or older has only about a 6 percent chance". And as unemployment increases in duration, these chances only become dismally worse. Millions have now been unemployed for 3 to 6 years.

Also for these older workers:
  • In addition to lost jobs and low prospects for rehire, their home equity has plummeted: An AARP analysis found 1.5 million people over 50 had lost their homes to foreclosure between 2007 and 2011 and another 3.5 million owed more than their homes were worth.
  • Many older workers have run through their retirement savings: One survey of post 50s found 25 percent had used up all of their savings between 2007 and 2010. Meanwhile, Americans’ confidence in their ability to retire has hit a two-decade low, according to a study by the Employee Benefits Research Institute.
  • Workers who take Social Security at age 62, are stuck at a lower benefit for life. According to the GAO report, someone who exited the workforce at that age would receive a median monthly benefit of $909 – compared to $1,212 for people who wait to take Social Security until age 66.

We always hear about how many new claims there were for Social Security disability benefits since the financial collapse in 2008. One story in the Huffington Post says Social Security Disability Fund A Last Resort For The Unemployed As Benefits Dry Up -- and that over 10 million people were receiving SSDI benefits (but they did mention that this number also included children and widows).

Before the Great Recession began in 2007, there were 7,101,355 Americans receiving Social Security disability benefits*. Since then, and until the end of 2012 (over the past 5 years), 1,726,440 more claims were awarded for a total of 8,827,795 --- that's an average of 345,288 new SSDI claims per year that were actually awarded, out of many more that were only just filed.

* The number of applications is for disabled-worker benefits only and, as such, excludes disabled child's and disabled widow(er)'s benefits. SOURCE: http://www.ssa.gov/oact/STATS/dibStat.html

Year # Claims # Awarded % Awarded Total
2007 - - - 7,101,355
2008 2,320,396 895,011 38.57% 7,427,203
2009 2,816,244 985,940 35.01% 7,789,113
2010 2,935,798 1,052,551 35.85% 8,204,710
2011 2,878,920 1,025,003 35.60% 8,576,067
2012 2,820,812 979,973 34.74% 8,827,795

Other Posts on Unemployed Middle-Aged Workers

  • Only 9% of Laid-Off Middle-Aged Workers are ever Rehired
  • Unemployed Over 2 Years & 50+ Years Old: Only 9% are Rehired
  • Long-term Unemployed Middle-Aged Workers: Good Luck!
  • Only 9% of Unemployed over 50 are Rehired
  • Over 50 and Unemployed: Only 9% Find Work

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