Younger Workers, Older Workers and the Recession

Sylvain Schetagne and I have been looking at key changes in the job market over the past two years of recession and partial recovery using the Labour Force Survey data for October 2008 and October 2010.

The full analysis will be in the next issue of the CLC’s “Recession Watch.”

There have been some rather striking developments among both younger and older workers.

The employment rate for youth — that is, the proportion of the age group 15-24 who are working — has fallen very sharply over the past two years, by five percentage points, from 59.5% to 54.5%. And the proportion of  young workers who are part-timers has risen, from 44.9% to 47.9%.

The youth unemployment rate has jumped from 12.1% to 15.0%, and would be even higher if the youth participation rate (that is, the proportion either working or actively looking for work) had not fallen sharply from 67.7% to 64.1%. The participation rate has likely fallen as young people have given up the search for work or decided not to work while in school.

Meanwhile, the participation rate for workers aged 55 to 59 has risen from 72.2% to 74.0%, and, for workers aged 60 to 64, it has jumped very significantly, from 48.8% to 52.2%. It has also risen, but from low levels, from 10.5% to 11.8% for workers aged 65 and over.

For workers aged 60 to 64, the participation rate of men has risen from 57.1% to 58.3%, while it has risen extraordinarily rapidly, from 40.8% to 46.4%, for women.

There has been a small increase in the unemployment rate among older workers, but the employment rate (the proportion with jobs) has increased almost in line with the participation rate.

While the rate of increase in full-time employment has been somewhat less than that for part-time employment for workers aged 60 to 64, more than three in four (76%) of those employed in this age group were working full-time in October 2010.

It would seem that the age of retirement — which normally takes place between ages 60 and 64 — has jumped, especially for older women. While this is, no doubt, partly a matter of choice, it also seems likely that the hit to retirement savings caused by the fall in the stock market and very low interest rates is also a factor.

The large baby boom age cohort is now entering the normal years of retirement in large numbers, so a rise in the age of retirement could have a significant impact upon the job market over the next few years.

It is ironic that the decision of so many baby boomers to remain in the workforce is part of the reason why their children are having such a hard time finding jobs.

One implication is that we should worry a lot more about unemployment today, and a bit less about the spectre of labour shortages tomorrow.


  • Mary Ann Sherman

    It is disheartening to see two leading researchers offer such a thin, and I suspect, inaccurate conclusion from their own research: that experienced workers who continue to be employed are taking jobs from their own children! It reminds me of the 70’s when men said women were taking their jobs, and the 60’s when whites said their jobs were being taken by blacks.

    Your discussion of employment rates for the age groups in your study compares the proverbial apples and oranges. Do you truly believe that a large percentage of white collar jobs, given up by 55-year-olds, would go those aged 15 to 24?

    Your conclusion is ageist. Minorities have high unemployment rates as well. Are older workers taking jobs away from them, too? Why not simply say that high unemployment rates are the result of people who are employed holding on to their jobs?

    For several years before the collapse, corporations were trying to figure out how to keep older works on the job because they felt that the coming tidal wave of retirements would leave them with openings for which there would not be enough qualified workers. The CEO of an international consulting firm restarted that discussion at the most recent Davos conference.

    It’s the economy; not the workers.

    Mary Ann Sherman

  • I think there is evidence that entry level jobs normally taken by youth are now being accepted by displaced older – and not so old but experienced – workers.

  • a sign that senior poverty and inadequate pensions are becoming a huge issue.

    Also creating upheaval in the youth employment situation, that inadequate post secondary funding and student poverty combined can effect educational opportunities. You are talking to a guy who had to work pretty much full time all the way through university, and if were not for that job AI would never have made it through.

    Two huge issues that amazingly come through in the life cycle approach to labour markets. A theme I was just writing about.

  • and yes the participation rates of workers 65 and older are climbing. Of course the neo cons will tell us, it is merely to give these retirees something to do. Tell that to my son’s retired from the construction industry and is now a school bus driver at age 67, who makes less than 15$ an hour with no benefits working for a private contractor.

    Or how about the several retired friends i have working in retail selling shoes, and other such stuff at the local mall, because they do not have enough pension income. Or how about my singing retired friend who sings with the NAC but is now retired and delivers newspapers at 3:00am in the morning because money is tight.

    YEs Andrew you and Sylvain have uncovered a new and growing labour market issue. As tuition rises and pensions are attacked and reduced like both are occurring, you will see this trend grow.

  • Mary Ann has a point. Capitalist labour markets tend to pit workers against workers: native born vs new immigrants, men vs women, unionized vs non-unionized, Canadian workers vs American workers and so on. This is especially the case where there does not exist a robust training regime and a macro-economic policy paradigm dedicated to full employment.

    That neoliberalism intensifies these conflicts within labour markets is an established fact by now.

    In Solidarity!

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