- Older Americans are struggling to rejoin the workforce, and it's weighing on the economy.
- A new ZipRecruiter study found that ageism, technology gaps, and weak confidence are holding seniors back.
It wasn't just early retirements. Millions of older Americans still want to work, but various hurdles have them stuck on the labor market's sidelines.
Since the US economy reopened after the initial wave of the pandemic, the labor market's rebound has been extraordinarily strong. Yet the Baby Boomer generation isn't feeling the benefits. They're instead being left behind to a degree not seen in decades.
Unlike the previous two US recessions, the share of Americans age 55 and over who are working declined after the beginning of the pandemic and has yet to return to pre-crisis levels. That drop in older workers could threaten the already-shaky economic recovery, according to a report published by ZipRecruiter on Wednesday.
The economy might be at record-high employment, but it still has to make up for two and a half years of lost job growth. Failure to achieve those gains and bring older workers back "reduces economic growth, reduces the number of productive people in the economy, and increases the number of non-working people that the productive people need to support," Julia Pollak, chief economist at ZipRecruiter, told Insider.
Pandemic-prompted retirements pulled many out of the labor force. Roughly 93,000 more workers left their jobs due to retirement in 2020 compared to 2019, according to the Bureau of Labor Statistics. Yet that pales in comparison to the 20 million more older workers who were laid off or discharged in the first year of the pandemic.
"We could be steering toward an iceberg because many of these people have been pushed into retirement early, and we know that when people are pushed into retirement they seldom come back," Pollak said.
Labor demand remains historically strong. Yet as the recovery progresses, a handful of obstacles are keeping older Americans out of the workforce.
The biggest job creators have their sights set on youth
The US boasted 11.2 million job openings at the end of July, according to the Bureau of Labor Statistics. Yet the firms hiring the most in today's economy are the ones with the most interest in young employees.
The arts and entertainment, restaurant and bar, and warehousing sectors have exhibited some of the strongest job growth since the start of the pandemic, yet the median age of their employees is also among the lowest, according to the study. Employers at such firms could be overlooking older workers due to a belief that they won't fit in with a younger staff, Pollak said.
"When you're older, you have fewer years left in the labor market, so it changes the calculus around these hiring decisions," she told Insider.
The public sector has long been a boon for older workers, but hiring in that segment is lagging and likely won't present the same opportunities to seniors as before, Pollak added. Many of the workers it lost during the pandemic were pushed into early retirements. Once public workers go into retirement and start receiving related benefits, it's a "real bureaucratic nightmare" to rehire them, Pollak said.
The job search has moved online, but many seniors haven't
The very nature of the 2022 job hunt also leaves seniors at a disadvantage. Job openings are increasingly found online instead of in-person, as are applications and interview processes. Where that's easily accessible for young workers, older Americans face a steeper learning curve just to compete.
A Pew Research study conducted in 2015 found that only one-in-10 adults aged 65 and older had ever looked for a job online, and only 7% had applied to an opening through the internet. The same figures for Americans aged 18 to 29, meanwhile, were 83% and 79%, respectively. The pandemic and broad shift to remote work likely widened that gap, Pollak said.
Ageism continues to plague the hiring process
Older Americans also report difficulties with avoiding age discrimination in the job search and the workplace. Fifty-four percent of older workers have been laid off or forced out of work early due to their age, according to a 2019 ZipRecruiter survey. Another 18% said they were encouraged to retire before they were ready to, and 61% told ZipRecruiter they were denied a job because of their age.
New kinds of age discrimination cropped up during the pandemic. While the Paycheck Protection Program helped several businesses avoid layoffs throughout the early stages of the pandemic, it also gave hiring managers an opportunity to shuffle their employee base.
"The policies required them not to preserve specific jobs, but the overall headcount. So it did cause some reallocation toward younger and cheaper workers at a time when workers were getting more expensive overall," Pollak said.
Older workers' confidence is dismal
The three aforementioned trends have contributed to a simple truth: older workers are immensely discouraged.
Job seekers aged 65 and older have the lowest confidence in their ability to find work of all age groups, according to a ZipRecruiter survey conducted in August. They also report having the lowest confidence in finding a job they like, and that they'll be able to find a job that pays more than their last one. They also buck the current trend in the current labor market and believe that, despite widespread job openings, it's become harder to find work than before.
"Their confidence has been falling lately, and that really does shape their behavior. It causes them to exclude themselves, not apply as widely, and not sell themselves as much in their applications," Pollak told Insider.
There's still hope that older workers can rebound. Community organizations should develop programs for helping seniors share job openings, practice search skills, and support each other through their job hunts, Pollak wrote. Employers, meanwhile, should commit to "leveling the playing field" and sign up for programs like the AARP Employer Pledge.
Millions of older Americans still want to work but are struggling to rejoin the labor market. Bringing them back can give the economy a shot in the arm just as it teeters on the brink of recession.