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 CLCâ€™s â€œRecession Watch.â€
There have been some rather striking developments among both younger and older workers.
The employment rate for youth â€” that is, the proportion of the age group 15-24 who are working â€” has fallen very sharply over the past two years, by five percentage points, from 59.5% to 54.5%. And the proportion ofÂ 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 â€” which normally takes place between ages 60 and 64 â€” 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.