Long-Term Unemployment Trend for Older Workers Is Terrifying

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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Read/Post Comments (12) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 06, 2014, at 6:10 PM, Disgustedman wrote:

    I've got a friend who makes nifty bird houses and feeders for humming birds. He sells them for $20 a pop at the local flea market. 1 sale pays for the table, 4 sales pays his food for two weeks. He plans the next month based on his sales.

    He's never had a really bad week, but a few bad days. Still he's doing good for being 77.

  • Report this Comment On April 06, 2014, at 7:13 PM, exlonghaul wrote:

    and obama & the social security admin changed many rules for folks over 50 to apply for disability

    (SSDI) ,,and this was promoted in 2010 ,apparently they know it's almost impossible for those over 50 to aquire new skills sets & compete ..

    the new disability numbers are over 50 million in 2011,,up drastically from 17 million from 2001 ,,

    and for those who are collecting SSDI before 67 can still work part time ( ticket to work program ) and still work part time ,"depending on state "up to 1,000$ a month without it effecting their monthly allotment ..

    you tell me ?

  • Report this Comment On April 06, 2014, at 7:24 PM, greyhound44 wrote:

    Not at all: I retired 31 Aug 2003 at age 58.75 after having paid Maximum (SS portion of FICA) for 35 + years; took Maximum SS Retirement Benefits (reduced for age) at 62.

    These air head US financial planners are IDIOTS!!

    They have No Clue how to screw the US Government!!

    Get out of the USA!

    Get many assets off shore.

    Get a second Passport.

    Get your IRAs into a whole bunch of legal investments.

  • Report this Comment On April 06, 2014, at 7:34 PM, sabebrush6 wrote:

    I was lucky, I retired at 62, june 1, 2007. Just before Obumbler got his meathooks into the Presidency. Matter of fact, I even bought a new motor home in 07 when gas was $1.84 a gallon. Just think. Bush era gas was $1.84 a gallon.

    And then, and then, and then --- along comes the welfare president and everything went to hell in a hand basket.

  • Report this Comment On April 06, 2014, at 9:05 PM, Bubba49 wrote:

    I'm 50, and I started my own business. I do commercial finance. As I age, I find more and more, there is only one "certainty" in this world that I can totally rely, and that is myself. I know I won't be terminated, laid off, fired, downsized, rightsized, reorganized or anything else. To seniors everywhere, invest in yourself. Its the one investment where you can control the ROI.

  • Report this Comment On April 06, 2014, at 11:33 PM, clearthinker77 wrote:

    I was a teacher. Axe came, and guess whose neck it fell on first. Yes, the oldest teacher at the school, followed with the next oldest. We have another Obama hater above still claiming gas prices were lower under Bush. Jeesh. Can't these fools read charts?

  • Report this Comment On April 07, 2014, at 2:24 AM, keyze wrote:

    Scariest time for workers is over 50. No one wants to hire you because you might have health issues. Your experience is out dated for a lot of jobs.

    If you do have health issues chances of getting disability are very slim. If you do get disability it takes 2 years. In that 2 years you have probably spent your savings on medical expenses. That was my experience. It took the 2 years and $65 thousand in savings for medical and living expenses. List of health issues were debilatating back disease, nerves in arms needed 4 surgeries, Familiar tremors, I use voice to text software and employers do not like that. Even after surgeries still having numb arms and hands.

  • Report this Comment On April 07, 2014, at 9:12 AM, SLTom992 wrote:

    Ze plaun iss almost complete. Ve chall roon Michelle in ze nex elecshon.

  • Report this Comment On April 07, 2014, at 11:53 AM, BillP wrote:

    I am one of those long-term mid-management professional unemployed. Since my last lay-off 2006, I have worked contractually, consulting, real estate, and tried my own business (no funding for start-ups available without significant cash available). People should not blame the current administration for the situation (not that I am lauding it); the downturn in older employment possibilities occurred previously. I am not the only one in my area of my age and situation. There will be economic impacts when we get to "retirement", as we will not be able to contribute to the "consumer economy", focusing instead on staying alive and a roof over our heads.

  • Report this Comment On April 07, 2014, at 1:00 PM, BenHammer wrote:

    The government is achieving economic equality by encouraging wealthy investors to invest in tax shelters instead of productive businesses. The older people who lost their jobs should take satisfaction and happiness from the fact that wealthy aren't making any taxable money either so its fair. In addition, young people also can't find good paying jobs so inter-generational equality with out of work older people is enhanced.

    The answer to the problem (other than fixing the tax system along the ideas of Bowles-Simpson) is for the government to invest directly in the economy since no one else will. They need to hire the very brightest people to pick new industries and then invest hundreds of billions of dollars to create the jobs of the future. This type of managed government investment has never worked before, but maybe next time they will get lucky.

  • Report this Comment On April 08, 2014, at 12:25 PM, downeysoca wrote:

    Wow, Sherlock, nothing get pulled over on you!

  • Report this Comment On April 08, 2014, at 4:17 PM, SLTom992 wrote:

    Ben - I don't think that Liberals get your sense of humor.

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