More workers are hit with pay cuts than in previous recession

Paul Davidson | USA TODAY

Baby boomers should be hanging it up and kicking back.

Instead, they’re still driving U.S. job growth.

Americans 55 and over made up about half of all employment gains in 2018, according to an analysis of Labor Department data by The Liscio Report, a research publication for investors. That’s an eye-popping share considering that demographic made up only a quarter of last year’s labor force -- which includes people working and looking for jobs.

Of the 2.9 million new jobs recorded by Labor's survey of households last year, 1.4 million were taken by people 55 and over. And in December, 39.2 percent of Americans in that age group were working, the largest portion since 1961, according to the monthly employment report Labor released on Friday.

Among the factors behind the numbers: Older people want to work longer. The low, 3.9 percent unemployment rate provides them more opportunities as businesses struggle to find qualified job candidates. And lots of workers are simply aging into the 55-and-older bracket while many prime age-Americans remain sidelined.

“You have an aging workforce,” says economist Sophia Koropeckyj of Moody’s Analytics.

It’s not that baby boomers aren’t also retiring in droves. An estimated 10,000 a day are calling it quits. It’s just that the group is so large that enough are staying in, or returning to, the workforce to provide a welcome labor supply in a tight market.

After being on Social Security disability for five years, Janene Evans, 55, of Bozeman, Montana, decided to get a part-time job as a Walmart cashier in 2018 to earn some extra money. Although her disability paycheck rose 2.9 percent last year, she also faced a higher health insurance premium.

“Bozeman area employers are having difficulty finding employees,” Evans says, adding that Walmart managers were disappointed that she couldn’t work full-time. “Help-wanted signs are up everywhere.”

After putting in four weeks last spring, she quit the $11.50-an-hour job because it was too physically taxing, she says.

Overall, older workers are changing the dynamics of the American workplace. While their knowledge and skills make many more productive, others may be less adaptable and savvy about new technology, Koropeckyj says.

AARP Vice President Susan Weinstock says older workers bring soft skills “gained over a lifetime of work, like calm under the pressure, ability to solve complex problems, ability to listen and be empathetic. These are uniquely human skills that a computer or a robot can’t replace.”

Why older Americans are accounting for so many job gains:

Choosing to work longer

About a third of middle-aged Americans plan to work part-time and another 4 percent intend to work full-time after age 65, according to an Ipsos/USA Today survey in 2017.

Many baby boomers can do so because they’re healthier and better-educated than their predecessors, allowing them to continue working in white-collar jobs that don’t take a big physical toll, Koropeckyj says.

And since they’re living longer, they’ll need a bigger nest egg to fund their retirements, especially since the number of employers providing pensions has been steadily shrinking, says Jennifer Schramm, senior strategic policy advisor for AARP Public Policy Institute. The Great Recession compounded the problem by hammering the retirement savings of many older workers, Schramm says.

The 2007-09 downturn also left many boomers unemployed. When they finally did get jobs, many had to accept lower-level positions for less pay.

“Many seniors are having a hard time making ends meet and find they have to work when they had not planned to,” says Dean Baker, cofounder of the Center for Economic and Policy Research.

That wasn’t the issue for Gregory Siegelman, 61, who was laid off from his job as a marketing vice president in 2014. Although he couldn’t land another marketing position, he realized he had lost his passion for the field and could afford to retire. But he was bored.

Clinton Lewis

“How much golf can you play?” Siegelman asks. “How many trips can you take?”

“I knew I had more juice left in me,” he says, and so he sought a job teaching marketing at area colleges. He was repeatedly turned down until he finally snared a full-time job teaching marketing at Western Kentucky University that began in fall 2017.

While the position pays about a third of his former salary, it allows him to avoid tapping his retirement savings and delay going on Social Security, a strategy that will increase his monthly Social Security payments.

“I love helping the kids,” he says. “I enjoy being up on stage. I enjoy sharing my knowledge.”

Employers are struggling to find workers

With unemployment at 3.9 percent, it has gotten harder for employers to find qualified workers. In October, there were a near-record 7.1 million job openings but just 6 million unemployed workers, Labor figures show. As a result, more employers are willing to hire and accommodate older Americans by letting them work from home, for example.

That has drawn in more older workers. The share of 55-to-64 year-olds in the workforce increased to 65.5 percent in December from 64.5 percent a year earlier, Koropeckyj notes. And the portion of 65-and-older Americans in the labor force averaged 19.6 percent last year, the highest in decades, according to AARP and Labor.

Lots of baby boomers

The increasing presence of older Americans in the job market can at least partly be explained by the sheer size of the boomer generation. There are about 73 million boomers and many of the youngest ones recently entered the 55-plus bracket. That age group accounted for about half of the total 2.6 million increase in the U.S. labor force last year, according Moody’s and Labor.

Meanwhile, many Americans in their prime working years, age 25 to 54, were laid off during the Great Recession and went on disability or succumbed to the opioid crisis, Koropeckyj says. The share of prime-age Americans in the labor force has edged higher in recent years but remains below prerecession levels.

Holiday hiring

At least part of the surge in older workers last year seems to be related to strong seasonal hiring for temporary jobs in November and December. Employment for those 55 and over increased by 342,000 in that period, the largest two-month total since last spring.