Are Older Workers Taking Jobs From the Young?

High employment levels among older workers make them a target for generational attacks.

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Stubbornly high unemployment rates persist three years after the end of the recession. The problem is acute for younger workers, many of whom carry staggering student-loan debt. During this same period, however, employment of older workers has actually risen. So, isn't it fair to put at least some of the blame on seniors for the employment problems of younger job seekers?

[See The 25 Best Jobs.]

Stringing facts together to "prove" something that's not necessarily true is a popular parlor game. Here's another version of the jobs game:

Older workers are a bigger part of the labor force. But that's because they're a bigger part of the population. The trend of older people to continue working began many years before the recession. So, too, did the trend of reduced participation in the labor force by younger people. In the roughly 15 years before the recession, unemployment rates went as low as 4 percent, even while rising numbers of older workers stayed on the job. How can you say a continuation of a non-damaging trend has now become a burden on the young?

The complex reality of the jobs situation has spawned a cottage industry of economists and others trying to understand what's going on. One major food fight, which has escalated into the Presidential election, is whether the jobs problem is cyclical or structural. Liberal economists tend to think it's cyclical—a consequence of too little consumer demand. When demand recovers, so will the jobs. Conservatives tend to think it's structural—a result of Americans not being properly trained or companies properly motivated to take advantage of economic opportunities.

[See The Outlook for Senior Jobs in 2012.]

The story of older employees has multiple layers as well. The long-term trend toward extended employment among older people reflects inadequate retirement savings, disastrous recessionary investment losses, and soaring healthcare costs. But it is also caused by continued longevity gains among more prosperous and educated employees, who are also the people most likely to occupy so-called "knowledge" jobs that are not physically taxing. For this group, lifestyle decisions as much as financial ones are driving them to keep working.

Meanwhile, the age wave tends to distort efforts to look at age-related employment shifts over time and easily draw conclusions from them. Here are some other facts that also may cloud some pundits' crystal balls. They come from the U.S. Bureau of Labor Statistics and analyses by the Pew Charitable Trusts, the Federal Reserve Bank of Atlanta, and others.

• People out of work more than a year now comprise 4.2 percent of the labor force and would be half again as much if we counted people who stopped looking for work.

• Older workers are more successful in keeping their jobs than younger employees. But if they do lose a job, their chances of finding another one are much harder. Despite lower overall jobless rates, the percentage change in jobless rates among older employees is the largest of any age group.

[See 7 Threats to Your Retirement.]

• During the first quarter of this year, nearly 30 percent of the 13.3 million unemployed Americans had been out of work at least a year—more than triple the rate four years earlier. However, nearly 44 percent of jobless workers age 55 and older had been without work for at least a year.

• Since December 2007, the number of jobs held by people 55 and older has risen by 3.9 million. The number of jobs filled by people under age 55 has dropped by 8.1 million. At the same time, there are 10 million more people age 55-plus now than then, and 2.5 million fewer younger people. The share of people age 55 and older who have jobs is at a 42-year high.

• Baby boomers are leaving the labor force, and retirements thus are clearing the job markets. Such demographic shifts help explain about 40 percent of the decline in labor-force participation rates.

• Of all the people who leave the labor force, only 1.1 percent do so because they are discouraged in their job-search efforts. Another 98 percent leave because they have retired (48 percent), gone to school (18 percent), become disabled (16 percent), or have to take care of household members (15 percent).