Unemployment Rate for 35+ Year Olds Half of Rate for 20-24 Year Olds

Recent reports reveal the challenge older job seekers face in the current hiring environment, with more than one-third of those 55 and older experiencing prolonged joblessness lasting longer than a year.  However, the situation for older workers is not entirely grim.  In fact, a new analysis of employment trends reveals that this segment of the population is enjoying the strongest job gains of any age group.

The analysis of government labor data by global outplacement consultancy Challenger, Gray & Christmas, Inc. found that job seekers age 55 and older account for nearly 70 percent of the employment gains since January 1, 2010.

Overall, the number of employed Americans has increased by 4,319,000 between January 2010 and May 2012, according to household survey data from the U.S. Bureau of Labor Statistics.  Older job seekers – those 55 and up – accounted for 2,998,000 or 69 percent of the total employment growth.

The remainder of the employment gains occurred among 20- to 24-year-olds and 25- to 34-year-olds, who were able to increase the number with jobs by 980,000 and 882,000, respectively, since January 1, 2010.  Meanwhile, teenagers, 35- to 44-year-olds, and 45- to 54-year-olds each saw employment decline over the last 28 months.

It is true that a growing portion of older job seekers are enduring long-term unemployment.  According to data from the Government Accountability Office, 55 percent of workers 55 and older have been unemployed for 27 weeks, with 36 percent out of work for more than a year.  In contrast, just 23 percent of older workers were jobless for 27 weeks or longer in 2007.

While a larger portion of older workers are experiencing prolonged unemployment, the overall unemployment rate for this group has seen improvement over the last two years, falling from 7.1 percent in May 2010 to a current level of 6.5 percent.

“The unemployment rate among older workers still has a ways to go before reaching pre-recession levels of about 3.0 percent, but the pace at which these job seekers are finding employment compared to younger ones suggests they could reach pre-recession jobless rates before anyone else,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“Older workers may be benefitting from a desire among employers to keep hiring to a minimum.  The economy is still only slowly recovering, so employers have repeatedly indicated that they are only adding workers when absolutely necessary.  In this environment, a seasoned candidate who brings a wide variety of skills and experience to the table is going to have an advantage over younger candidates.  For employers, one experienced candidate is worth two or three younger, greener candidates, in terms of the ability to make immediate and meaningful contributions to output and the bottom line,” said Challenger.

Belying the myth that older workers are finding only low-paying jobs in retail or other service-oriented industries, the latest employment statistics reveal that some of the biggest employment gains for those 55 and older have occurred among managers and professionals.  As of May 2012, there were 6,274,000 Americans 55 and older employed in management, business and financial operations.  That is up 12 percent from 5,581,000 in May 2010.  The number working in professional and related occupations has increased 10 percent from 6,813,000 in May 2010 to 7,494,000 in May 2012.

Helping to drive the employment gains among experienced job seekers is the fact that a majority of companies recognize the value of having these workers on their payrolls.  In a 2011 survey of company executives and benefit administrators by Bank of America about 94 percent said it is important to keep older workers due to their skills.  In order to attract and retain these workers, the survey found that companies are offering customized schedules, education on retirement and health care, and the ability to work from home.

“However, even companies offering such benefits could find it increasingly difficult to convince older workers to stay on board.  Would-be retirees have more options than ever before.  They can go to competitors, they can switch industries and some are even changing careers.  Others may start their own consulting firms or spend their time volunteering for non-profit groups.  Companies that want their older workers to stay will have to ask and ask early.”

Even companies that ask nicely may be rebuffed by older workers looking forward to taking a new career direction in their non-retirement years.  A 2008 Economic Policy Institute study found that 43 percent of workers switch jobs after age 50 and 27 percent change occupations.

More and more older workers are starting their own businesses.  The number of self-employed workers age 55 and older has grown 13 percent from 2,873,000 in May 2010 to 3,258,000 as of May 2012.  Most of the growth occurred among those 65 and older, whose ranks of self-employed increased from 820,000 two years ago to a record high of 1,030,000 as of May, according to data from the Bureau of Labor Statistics dating back to 1976.