Men Still at Work: Professionals Over Sixty and on the Job (11 page)

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The Employment Situation for Adult Workers in the United States

Retirement should be voluntary. If work is more fun, keep on doing it.—George E. Vaillant,
Aging Well

Let’s review an essential part of the context for men staying on the job—the employment situation for adult workers in the United States. For that, statistics are in order. This chapter presents the current picture of labor force participation, including long-term unemployment, part-time versus full-time work, and other US labor market conditions, plus up-to-date information on a range of issues related to age and gender, work and retirement.

Labor force participation by older age groups, that is, people age fifty-five and over who are working or looking for work, has been escalating, according to the US Bureau of Labor Statistics (BLS). What’s more, a larger share of people
sixty-five and older
is staying in or returning to the labor force. People in this age group comprised 16.2 percent of the labor force in 2011 (up from 12.1 percent in 1990) and they numbered over 6.5 million (up from 3.8 million in 1990).
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Figure 4.1 shows the steady rise in participation rates of older worker cohorts over the past twenty years. If it is unremarkable that two-thirds of Americans ages fifty-five to sixty-four are in the labor force today, what surely is attention-grabbing are the labor force participation rates of even older age groups, particularly those seventy and older.

Figure 4.1

Labor Force Participation Rates by Age Group, January 1993–January 2013, Selected Years Only (in percentages)

Source
: US Bureau of Labor Statistics, Current Population Survey. Adapted from Sara E. Rix, “The Employment Situation, January 2013: Jobs Added to the Economy but Unemployment for Older Workers Holds Fast,” AARP Public Policy Institute, Fact Sheet 277 (February 2013). Washington, DC. Retrieved February 28, 2013, from
http://www.aarp.org/research
.

There are many possible explanations for these escalating rates of labor force participation by mature workers. First and foremost, the US population is aging. According to the Heldrich Center for Workforce Development, “Demographic trends predict a US population that is made up of a much greater proportion of older adults than in the population today, thanks largely to the size of the baby boom generation—those individuals born between 1946 and 1964—relative to younger cohorts. According to the 2010 US Census, 13 percent of the US population in 2010 was sixty-five or older. By 2030, the Census Bureau projects that the percentage of the population sixty-five or older will have risen to 19.3 percent—or nearly one in five individuals.”
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And this and other demographic trends are reconfiguring the composition of the workforce.

In 2010 the labor force held 30 million workers who were
fifty-five years and older
(19.3 percent of the total). By 2020, the BLS foresees 41.4 million workers fifty-five and older in the labor force (25.2 percent of the total, or one in four workers). In 2011 there were nearly 7 million people
sixty-five or older
in the labor force; by 2050, the number is projected to be nearly three times that, or 19.6 million. In a much shorter time span (by 2022), the number of men and women in the labor force sixty-five years or older will grow by 75 percent, compared to the number of prime-age workers (ages twenty-five to fifty-four), which will grow just 2 percent.
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The labor force is becoming more diverse, as well. The
growth rate
of women in the labor force, which has been “significantly higher” than that of men, is projected to slow by 2020, and the growth rates for men and women will be similar for the 2020–50 period.
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Older men will continue to outnumber older women in the workforce, as they have historically, but the gap will be much narrower. Figure 4.2 compares labor force participation rates by age (fifty-five and older) and gender for selected years.

Figure 4.2

Labor Force Participation Rate, by Age and Gender, 1959–2011, Selected Years Only (in percentages).

Source
: US Bureau of Labor Statistics, Current Population Survey. Adapted from Economic Policy Institute, “Labor Force Participation Rate, by Age and Gender, 1959–2011,”
The State of Working America
,
12th ed
.
(Washington, DC: Economic Policy Institute, 2012). Retrieved February 11, 2013, from
http://www.stateofworkingamerica.org/jobs/figure5L
.

Whites are the largest group in the workforce but their population growth rate is slower than other racial and ethnic groups: Asians (the fastest-growing population) are expected to more than double their portion of the labor force (adding close to 9 million) by 2050; blacks will add 6.4 million, owing to high participation rates of black women; and Hispanics will add 37.7 million (almost 80 percent of labor force growth). In this decade alone, participation of
older
Hispanics in the civilian labor force is projected to increase at a faster rate than any other Hispanic age group.
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There are many and varied reasons for older workers staying on the job. When the American Psychological Association conducted a Workforce Retention Survey to find out why working Americans stay with their current employers, “work-life fit” and “enjoying what they do” topped pay and benefits across all age groups.
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For adults age fifty-five and older, eight out of ten cited “enjoying the work,” more than three-quarters cited “work-life fit,” nearly two-thirds said “feeling connected to the organization,” and more than half said “having an opportunity to make a difference.” (My respondents’ reasons are discussed at length in chapter 7.)

The BLS highlights several reasons for the significant increases in labor force participation rates among older Americans:

■
Longer and healthier life spans are enabling additional years of earned income.

■
Availability of employer-based health insurance is keeping people in the labor force.

■
Hikes in eligibility for collecting Social Security benefits are encouraging delayed retirement and rewarding older workers for each additional year of employment.
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■
The shift from defined benefit to defined contribution pension plans (i.e., from employer “pay out” to employee “pay in”) means benefits accrue with additional years of work.

■
The Age Discrimination in Employment Act (ADEA) has eliminated most mandatory retirement ages.

■
Labor market participation rates are higher among better educated citizens.

■
Negative consequences of the financial crisis induce older workers to remain in the labor market.
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For an older adult nearing retirement age, such as a baby boomer, those negative consequences of the financial crisis might include: wage or salary stagnation, the loss of value in his home (or loss of the home through foreclosure), and diminished investments and savings, coupled with responsibility for a growing share of health-care costs. Although economic factors loom large, they are not the only drivers of working in the later years. Another array of influences on the retirement decision partially overlaps the previously referenced BLS list and adds the following: incentives, such as employers offering phased retirement options or reduced hours; status of physical and cognitive health (one’s own and one’s family’s); availability of disability and unemployment insurance programs; and individual preference for leisure versus
employment.
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An increasing number of even younger boomers have lost confidence in their ability to retire with sufficient financial security, and they, too, are opting to delay retirement. A 2012 Conference Board survey of 15,000 individuals found nearly two-thirds of Americans between the ages of forty-five and sixty saying they plan to delay retirement, and this was more than 20 percent higher than the response to the same survey item in 2010.
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Similarly, MetLife’s 2012 study of boomer attitudes regarding retirement found them “wearily eyeing working beyond the age of sixty-five.”
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(Despite their professed intention to delay retirement, it is entirely possible for boomers to change their mind when decision time arrives, as Sloan Center economist Kevin Cahill and other researchers point out.)
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A 2012 retirement readiness survey by the Aegon Group of nine thousand current workers in the United States, France, Germany, Hungary, the Netherlands, Poland, Spain, Sweden, and the United Kingdom found only 15 percent of respondents were confident that they are “on course to achieve the retirement income they need.” Sixty percent expect to keep working in some manner beyond their retirement age. They did not want a traditional “retirement cliff” experience (i.e., going straight from working life into full retirement), a retirement cliff apparently having as little appeal as a “fiscal cliff.” Across all nine countries participating in the Aegon survey, some form of
phased
retirement was preferred, such as changing to part-time status for a little while or changing to part-time status and continuing to work longer, or starting one’s own business. Aegon sees phased retirement becoming the norm because people are living longer yet are less prepared for retirement financially.
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Retirement researchers Alicia Munnell and Steven Sass address the economic arguments for continuing to work past the traditional retirement age, asserting that “the economic dynamics currently in play . . . are unlikely to provide today’s workers with economic security in their old age.” With Social Security’s retirement age for collecting full benefits moving from sixty-five to sixty-seven, higher health-care costs, rising tax rates, and weak-to-nonexistent retirement savings, they advise older workers who are healthy and willing to stay in the labor force, add to 401(k) accumulations, decrease the projected years in retirement, and leave more income for later years.
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New York Times
economic reporter Eduardo Porter also makes the case for delaying retirement for at least a few years. Doing so would not only increase one’s income in retirement—annual Social Security benefits would increase along with each additional year in the workforce—the income taxes paid would also augment and take some strain off the government’s social insurance programs. Porter points out that lower-wage workers would have the most to gain from additional years of work (although it has been shown that low-wage earners tend to exit the labor force earlier than higher-wage workers). Continued participation in the workforce would also help to offset slow growth in the labor supply, which the Congressional Budget Office expects to contract even more in the coming decade.
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To be sure, the United States is not alone when it comes to a shrinking supply of younger workers. With longevity increasing apace in Japan, a government report warns the country “to harness the skills of its graying workers,” for “the nation’s economic prospects depend on making them productive.”
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Promoting employment of mature workers is also a priority for European Union member countries. As Netherlands professor Annet de Lange reports, in the twenty-seven countries in the European Union as a whole, the rate of participation in the labor force for the population age fifty-five to sixty-four was 47.4 percent in 2011. Rates of participation by that age group vary widely from country to country in Europe. At one end of the spectrum is Sweden’s high rate of 72.3 percent, with Germany, the Netherlands, and the United Kingdom close behind, and at the other is Belgium’s rate of 38.7 percent the same year.
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In Germany, one of the European countries experiencing marked population declines, the government is inducing older workers to postpone retirement by raising the retirement age gradually from sixty-five to sixty-seven, and companies are offering flexible hours and redesigning assembly lines to minimize bending and lifting.
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Luxembourg’s National Employment Administration is considering a national policy to extend the careers of older persons—both by keeping them employed and by facilitating “reinsertion” (or reentry) into the workforce—through personnel training and guidance geared to job market requirements and favorable working conditions. The European Social Fund and the Ministry of Labour in Luxembourg are supporting the development of a “scorecard” intended to change the image of workers age fifty and older so companies won’t be so quick to lay them off when they turn fifty-five.
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In Australia, too, the government is urging employment of “mature age” workers and encouraging them to prolong their work lives by raising the eligibility age for the Age Pension and promoting tax-based incentives for employers and employees to contribute to retirement funds.
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