The ongoing pandemic continues to put a heavy burden on older workers. Many lost or left jobs amid the winter surge in the winter of 2021. Jobs are only slowly coming back and long-term unemployment stays high. Retirement is often not an option as many older workers have little or no wealth outside of Social Security. As a result, many older workers have trouble paying their bills, while they look for a new job amid an ongoing public health crisis.
The job market recovery has been a roller coaster ride for older workers throughout the pandemic. Workers 55 years old and older old saw a sharp drop in the chance of being employed in the spring of 2020, followed by a strong recovery through October 2020. In the fall and winter months, employment declined again before gradually recovering in the spring and summer of 2020. Workers from 55 to 64 years old saw much larger down and up movements than workers 65 years old and older (see figure below). More than a year and half after the recession started, the employment to population ratio of workers 55 to 64 years old was 0.9 percentage points lower than in February 2020, just before the pandemic started. The respective decline was 1.6 percentage points for workers 65 years old and older. There were one million fewer workers 55 years old and older in September 2021 than in February 2020.
Off And On Again Employment Recovery Has Left a Jobs Hole for Older Workers
Calculations Based on Bureau of Labor Statistics, Current Population Survey
But, the older population also grew during this time. We are living in an aging society after all. All in all, 1.9 million fewer workers 55 years old and older had a job in September 2021 than in February 2021 if the employment to population ratio had remained the same since then.
Many older workers did not just disappear into retirement. Many stayed and kept looking for jobs. The unemployment rate shot up especially for workers 65 years old and older at the start of the pandemic. The unemployment rate for workers 65 years old and older averaged 10.8% from March to June 2020, when the first wave of job losses hit hardest. Workers 55 to 64 years old had an average unemployment rate of 9.4% then. Things have improved since then, but workers 65 years old and older still had a slightly higher unemployment rate with 4.9% in September 2021 than workers 55 years old and older, who had an unemployment rate of 4.6% then. These age differences are especially remarkable since unemployment rates have traditionally been lower for older worker than somewhat younger workers since older workers would often retire early rather than continue looking for another job.
The length of unemployment increased over time as many older workers continued to look unsuccessfully for a new job. For the past six months, the average length of an unemployment spell lasted 40.5 weeks for workers 65 years old and older with no apparent trend towards improvement. The average length of unemployment has trended upwards for workers 55 to 64 years old during that same time and stood at 40.1 weeks in September 2021. Unemployed older workers are now out of job and looking for a new one for about three quarters of a year on average.
Social Security data also show that older workers did not start to collect benefits in droves. In fact, the number of new beneficiaries collecting Social Security retirement benefits steadily dropped relative to the same period in 2019 at the start of the pandemic. It nosedived in the winter of 2021 and was below the levels of 2019 before returning to the average numbers of 2019 in the spring and summer of 2021 (see figure below). Importantly, the comparison to 2019 understates these differences since the population of potential new retirees increased at the same time. Retirement simply was not in the cards for many older workers amid an ongoing health and economic crisis.
Number Of New Retirees Often Below 2019 Levels
Calculations Based on Social Security Administration, Monthly Statistical Update
Black women had an especially difficult time getting new jobs. The employment-to-population ratio for Black women aged 55 to 64 years old averaged 51.6% for 2021, down from 54.2% in 2019, the last complete year before the pandemic. This is the largest such drop for any group of men or women during this time period. Older Black workers were also more likely than White workers to delay collecting Social Security benefits amid the pandemic, both because and despite of a lack of wealth, even though they had a harder time getting new jobs than White workers did.
Many older workers needed to stay in the labor market, even amid a once-in-a-century crisis that put their physical health at risk when they had a job. They simply did not have the financial resources to withdraw from the labor market and often struggled financially. People 65 years old and older had a 19.4% chance of having trouble paying their expenses in October 2021, according to the Census’ Household Pulse Survey. This is an increase from 16.2% in April 2021, when many households received additional relief checks. People 55 to 64 years old were in worse shape than older people, as they had a 28.8% chance of being unable to pay all of their expenses in October 2021. This marked an increase from 26.3% in April 2021. Current levels of financial difficulties for people 65 years old and older are not far below the levels of October 2021, when they had a 20.7% chance of not being able to pay all of their bills. At that point last year, the labor market started to slow, expanded unemployment insurance benefits had stopped and many people had exhausted their initial relief checks from the start of the pandemic. Many older workers are always living close to the financial edge.
Financial troubles are especially pronounced among older workers, who had lost a job during the pandemic. They had a 57.2% chance of being unable to pay all their bills in October 2021. Again, retirement was often not an option. Working longer was the retirement plan for many older workers to overcome their lack of savings all along, until it wasn’t.