A Closer Look At America's Aging Workforce

More older Americans want to work than ever before. There is no question that economic stresses have delayed retirement and driven older people to keep working. But there are other forces at work, and they're part of a sustained change that's been going on for more than 20 years.

Last week's strong employment report showed that the jobless rate for all workers edged down to 7.8 percent last month. Some months, the jobless rate hardly tells the whole story. Discouraged job seekers leaving the workforce can actually drive down the stated jobless rate even though the economy was not getting stronger.

That didn't happen last month. Jobs were up and so were the numbers of job seekers, yet the jobless rate fell. Including prior-month revisions and other data, it looks like the pace of job creation has picked up. Among workers age 55 and older, the unemployment rate last month was 5.9 percent. That's unchanged from August but down steadily from 6.7 percent in September 2011.

These current jobless figures take the headlines, and rightly so. But looking back several decades helps put today's figures in context. In the case of people's desire to find work, the key measure to look at is the labor force participation rate. This is a self-selected category that is measured in regular government surveys that ask people if they want to work. If they do, they're included in the labor force.

U.S. News looked at labor-force participation rates for people age 55 and older, going back to 1950 for the broadest measures, and back to the 1980s for some measures of specific groups of older workers.

Low labor-force participation rates generally mean that people feel fairly well off, but they also can reflect social patterns. Women, by way of a huge example, have posted a sustained rise in participation rates that has lasted decades. The fact that the rate was low in the 1950s didn't mean that women felt well off, but that prevailing social norms did not encourage them to work.

Likewise with older workers, changing attitudes are a likely cause of higher participation rates. So are longer life spans and improved health of people in their later years.

In all cases, the lowest labor-force participation rates among older people were posted 15 to 25 years ago. Since then, there has been a steady increase. It became more pronounced in the past few years and has held up during the slow recovery. Here are the details for the age groups tracked by the government:

55 and older. The lowest participation rate since 1950 was 29.2 percent, which was posted in the third quarter of 1993. The rate was 37.1 percent in the second quarter of 2005 and averaged 40.2 percent for all of 2011. That's the most recent available data according to the U.S. Bureau of Labor Statistics, which provided the information.

55 to 64. A low of 54 percent occurred in the third quarter of 1987. The rate was 62.9 percent in mid-2005 and averaged 64.3 percent last year.

65 and older. A low of 10.7 percent was reached in the first quarter of 1987. The rate was 15.1 percent five years ago and 17.9 percent last year.

65 to 69. A low of 17.8 percent of this age group was in the labor force in the first quarter of 1985. The figure had jumped to 27.6 percent by mid-2005 and to 32.1 percent last year.

70 to 74. Only 9.8 percent of this age group was in the labor force in the first quarter of 1987. By the middle of 2005, the rate had nearly doubled to 17.0 percent. It rose further last year, averaging 18.8 percent for all of 2011.

75 and older. The labor-force participation rate of our oldest employees has also nearly doubled, but from a very small base. In the fourth quarter of 1988, only 4 percent of this age group was in the labor force. By the middle of 2005, that total was 6.6 percent, and it edged up to 7.5 percent last year.

The sustained rise in older workers periodically produces concerns that the job and career prospects of younger workers are being hurt by the slowness of older workers to retire and make room for younger generations. The Center for Retirement Research at Boston College has taken a close look at whether rising numbers of older workers have "crowded out" younger workers and adversely affected their job prospects. It found that keeping older employees on the job actually has the opposite effect.

"The evidence suggests that greater employment of older persons leads to better outcomes for the young—reduced unemployment, increased employment, and a higher wage," the Center concluded in its study. "The patterns are consistent for both men and women and for groups with different levels of education."



Charles Schwab Older Workers & Money Survey 2012