The labor market is slowly recovering, albeit in fits and starts. The current recovery is leaving many older workers behind. They now face the prospect of lengthy spells of unemployment, depleted savings and pressures to retire early with permanently lower Social Security benefits.
The recession hit older workers harder this time than somewhat younger workers. In the first four months of the recession, from March to June 2020, the unemployment rate for workers 65 years old and older averaged 10.8%, compared to 9.0% for workers 55 to 64 years old and 8.6% for workers 45 to 54 years old. That pattern of higher unemployment rates among older workers remained throughout the second half of 2020, although at lower levels, with the group of oldest workers experiencing an average unemployment rate of 6.9%, followed by an average unemployment rate of 6.6% for those 55 to 64 years old and 6.1% for those 45 to 54 years old. Even for the first four months of 2021, the unemployment rate for workers 55 to 64 years old was higher with 5.3% than that of workers 45 to 54 years old, who had on average had an unemployment rate of 5.0%. Workers 65 years old and older had an unemployment rate of 5.1%. In this recession, the unemployment rate was typically higher for older workers than for workers in the middle-age group of 45 to 54 year-olds. This pattern is unusual since older workers had often been more isolated from job losses in past recessions. The pandemic upended this pattern.
Older workers of color experienced much higher unemployment rates than White older workers. From January to April 2021, for example, the unemployment rate for Black workers 54 to 64 years old – a group close to retirement — was 6.3%, that for Latino older workers 8.6% and that of Asian older workers 7.2%. In comparison, the unemployment rate for White older workers near retirement was 4.8%. The pandemic has exposed large racial economic disparities. These disparities persist across age groups and they have lasted well into the labor market recovery.
The pandemic has also exposed large inequities by gender. Women suffered larger job losses and higher unemployment rates than men early on in the recession. The unemployment rate for women 55 years old and older jumped from an average of 2.8% in 2019 to 10.8% in the first four months of the pandemic. In comparison, older men’s unemployment rate increased from 2.6% to 8.6% over the same time. There were several reasons for this initial gender inequality. Women still tend to have more caregiving responsibilities than men and caring for children and older relatives became more difficult to balance with remote work. Many women also worked in occupations with elevated exposure to the novel coronavirus, for instance, in nursing homes and hospitals. And more women worked in industries hard hit by the pandemic such as restaurants, hotels and health care.
The gender inequality in unemployment seemed to change in 2021. Men 55 to 64 years old had a higher unemployment rate on average than older women from January to April 2021, 5.5% compared to 4.9%. Both men and women face increasingly difficult times finding new employment as the labor force participation rates for both groups continue to decline alongside falling unemployment rates. People leave the labor force as they give up looking for a job. Now, this seems to be especially the case for older men.
The aggregate numbers, though, hide differences by race and ethnicity. The labor force participation rate for older Latina women has barely gone up in 2021, for instance, while it has recovered to its 2019 levels for older Latino men. The unemployment rate for older Latino men stood at 9.4% in the first four months of 2021, while that of older Latina women averaged 7.6% during that time. This was the largest unemployment rate difference among any racial or ethnic group of older workers. Older Latino men have returned to the labor market, but have encountered difficulties finding a job. At the same time, older Latina women have not yet returned to the labor market. This gender difference possibly exists because of the various health risks and caregiving demands that older Latina women face. The group of women especially hard hit by the recession may be shut out of the labor market recovery in part because caregiving supports are limited or nonexistent.
The increasing length of unemployment for older workers further underscores the difficulties that older workers face in finding a new job. On average, unemployed workers 55 to 64 years old were out of a job and looking for a new one for 34.4 weeks during the first four months of 2021. Workers 65 years old and older were looking even longer on average with 35.5 weeks. In comparison, workers younger than 55 were looking for a new job for less than 30 weeks.
Older workers, especially older workers of color, encounter greater difficulties in finding safe new jobs in the labor market recovery than is the case for younger workers. Policymakers will need to pay closer attention to the emerging inequities by age as they try to put the recovery on a stronger footing.