Older and more tenured workers used to enjoy more job security than younger and newer employees. Companies invested time and money in their career employees and had a lot to loose by laying them off. But that edge may be disappearing during this recession.
The unemployment rate for adults age 65 and older reached 5.1 percent in December 2008, a 31-year high, according to Bureau of Labor Statistics. While that’s lower than the overall unemployment rate, which hovered at 7.2 percent in December, many retirement researchers think that the unemployment rate among older adults will continue to climb because Americans will need to work during the traditional retirement years. Last month 326,000 adults age 65 and older were unemployed, 60 percent more than in November 2007, the last month before the current recession began.
Fewer older Americans can afford to retire now than during past recessions, according to Richard Johnson, a principal research associate at the Urban Institute. The share of seniors age 65 to 69 working or looking for work was 29.7 percent in 2007, up from 20.2 percent in 1982. Workers without traditional employer-sponsored pensions and retiree health plans often need to work until they qualify for Social Security and Medicare. And there are valuable increases in Social Security check amounts for each year a worker delays claiming. Plus, the stock market lost 41 percent of its value between September 30, 2007 and December 31, 2008, including a $2.8 trillion drop in retirement account balances. This further intensifies pressures on seniors to work longer, especially workers who have only a 401(k) or IRA retirement plan. (During the 1981–82 recession, the S&P 500 index fell by only 6 percent.)
Most of the jobs lost so far during the current recession have been in the manufacturing, construction, retail, business, and personal services sectors. Of those fields, the contraction of the retail sector will hit seniors the hardest because retail sales in the largest occupation for workers age 65 and older.
But there are a few relatively recession resistant industries that tend to welcome older workers including health care, higher education, and government jobs. Check out these 10 cities with plenty of job opportunities for older workers. My colleague, Rick Newman, discussed these great places to live and work in retirement with Fox Business Network in New York yesterday.