September 21, 2023

Economix: Older Workers Without Jobs Face Longest Time Out of Work

After reaching record highs month after month, the typical length of time a jobless worker in the United States has been unemployed finally fell in April, to “only” 38.3 weeks. But the outlook is looking bleaker for the nation’s older workers.

Sure, older workers are much less likely to be unemployed than their younger counterparts. Here’s a look at unemployment rates by age:

DESCRIPTIONSource: Bureau of Labor Statistics Note: The figures are presented as a 12-month moving average because not all age groups had seasonally-adjusted data available.

As you can see, the older you are, the less likely you are to be unemployed. The unemployment rate for people over age 65 is about 6.5 percent, taken on a 12-month moving average. The unemployment rate for teenagers is nearly four times that.

But if older workers do lose their jobs, their chances of finding another job are extraordinarily low. Here’s a look at the average duration of unemployment (on a 12-month moving average), broken down by age of the unemployed:

DESCRIPTIONSource: Bureau of Labor Statistics Note: The figures are presented as a 12-month moving average to adjust for seasonality.

The average jobless person over age 65 has been looking for work for 43.9 weeks. For someone between the ages of 55 and 64, the typical duration is 44.6 weeks, just a few weeks shy of a year. The average unemployment spells for both of these groups are at record highs.

The average teenager, on the other hand, has been looking for less than half that time, at 19.9 weeks.

Why are older workers more likely to be stuck in a seemingly eternal jobless limbo?

Some of it has to do with the fact that younger workers are more likely to drop out of the labor force entirely if they are unable to find a job after weeks of searching. Some young workers may go back to school, and some may move in with their parents. Wherever they end up, if they’ve dropped out of the labor force, they’re no longer technically counted as unemployed.

Additionally, older workers are more likely to have been laid off from industries in structural decline. Before the Great Recession, these industries — like manufacturing and newspapers — had probably been trying to shrink through attrition, meaning that they hired fewer young people to replace retiring workers, meaning offices and factories got gradually older. As the economy soured, these employers started resorting to more layoffs.

Now their former employees are structurally displaced, and probably less likely to go back to school for retraining or to move across the country where the job market may be better. After all, older workers are more likely to own their own homes, and so are less mobile.

Finally there is the possibility of age discrimination. Nearly every out-of-work American over the age of 45 I’ve spoken with has complained that prejudice is keeping him or her from getting a job.

Age discrimination is hard to prove, especially since employers are unlikely to inform applicants that age factored into the hiring decision. (Plus, as I’ve mentioned before, young people — and whites, blacks, Asians, Hispanics, women and men — also all seem to think that prejudice explains why they’re out of work.)

In any case these long durations of unemployment for older workers are particularly troubling, since the longer workers are out of the work the less employable they become. Lengthening spells of joblessness therefore do not bode well for the country’s ability to ever get displaced older workers back into gainful employment.

When we talk about the scarring effect of unemployment, we’re usually referring to the scars on young people’s careers. But there is also much to worry about the permanent damage that joblessness can wreak on older workers, many of whom feel they’re being summarily kicked out of the labor force.

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