Long-Term Unemployment Trend for Older Workers Is Terrifying

Despite having a lower jobless rate than other age groups, older Americans often face permanent unemployment after a layoff

Apr 6, 2014 at 2:00PM

Source: Flickr / Andreas Klinke Johannsen.

Even as the national unemployment rate has remained elevated compared to its pre-financial-crisis level, workers aged 55 years and older have enjoyed a much lower rate of joblessness when compared with younger Americans.

Unfortunately, this scenario is a double-edged sword. While many employees of the baby boomer generation lucky enough to have secure jobs are continuing to work, often past the traditional retirement age of 65, those who lose their jobs during midlife are not so lucky. Many of these workers are now faced with becoming a special subset of the long-term unemployed: the permanently jobless.

A desperate situation
Being out of work for 27 consecutive weeks will earn you the moniker "long-term unemployed", but for older workers, the situation is more dire. While many younger workers experience loss of employment for about 34 weeks, those over 55 suffer joblessness for an average of 45 weeks.

Why are things so very tough for the older crowd? A few theories exist, all of which have some merit. Some point to age discrimination, noting that complaints filed with the Equal Employment Opportunity Commission have shot up markedly since the onset of the financial crisis. Others note that employers doubt older workers' ability to catch up with workplace technology, or worry that their skills have become too rusty overall.

Another issue is the job search itself. As the authors of a recent Brookings Institution study on long-term unemployment point out, when the longtime unemployed do achieve reemployment, it is generally in the same type of occupation from which he or she was originally laid off. Since the financial crisis, there has been a disconnect between the number of vacancies and the people yearning to fill them – with the latter outnumbering the former. This would also account for the increasing numbers of older workers forced to return to the workforce in low-paying jobs when their job search yields nothing in their field.

Hanging on for dear life
At the same time that so many boomers are experiencing a job drought, others are planning to work well past age 65 due to financial constraints, some brought about by the financial crisis. Those who lost retirement savings, or even their homes, are now clinging to their existing jobs in order to put food on the table. Many of these workers are experiencing health problems, and are extremely stressed.

A recent Gallup poll shows that financial concerns are the likeliest reason for older workers to say that they plan to work past age 65 – with the respondents feeling the least confident about their situation saying that they don't expect to retire until age 73.

Is the problem of the long-term unemployed – particularly those 55 and older – solvable? As long as there are too many people chasing too few vacancies, it seems unlikely. The sunniest scenario, according to Alan Krueger, one of authors of the study for the Brookings Institution, is a robust economic recovery. But even so, Krueger admits, many of the chronic jobless are simply going to be left behind.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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