Older workers returning to work faster than their younger counterparts

WASHINGTON (TND) — Workers getting close to retirement age are reentering the labor force as the health risks from the pandemic recede at a time when businesses can’t hire employees fast enough.

When the coronavirus pandemic hit, millions of older Americans lost their jobs and caused economists to wonder how many would eventually come back.

The U.S. job market is booming as employers continue to add workers and boost incentives to get people in the door. Businesses have added at least 400,000 jobs for twelve consecutive months, unemployment is hovering around record lows, and a record two jobs are available for every unemployed American.

As the breakthroughs in treatments and the effectiveness of the vaccine have made people feel safe to return to some form of pre-pandemic activity, workers 55 and up have returned to work.

Almost 64% of adults between 55 and 64 were employed in April, almost matching the same rate from before the pandemic hit in February 2020. Younger sections of the labor force have mostly returned to work but have not quite reached pre-pandemic levels.

Older workers who may have been considering retirement once the pandemic took them out of the job market have had to reevaluate their financial positions as inflation has taken away some of their spending power and the cost of living has increased.

A tight job landscape creates more flexibility and favorable terms for older workers who may otherwise have been comfortable to remain sitting out.

“What's interesting about what COVID has done to the workforce permanently is it's changed the way we view work,” said Dr. Nicole Smith, chief economist at Georgetown University's Center on Education and the Workforce. “The flexibility of jobs — which most people are indicating that they really have no interest in going back to the status quo to have a 9-to-5 and a physical location — after two years of remote work, remote learning, we really are in a situation where this is kind of (schedule flexibility is) like the new norm.”

Maximum opportunity creates more options for a segment of the labor force that can traditionally have a difficult time finding employment due to their age, especially when they have extended time being unemployed like many did during the pandemic.

The condition of the labor market being very tight, there is more demand for workers than there usually is,” said Geoff Sanzenbacher, associate professor at Boston College. “A lot of time when the labor market is tight, we do see older workers tend to come back just because there's the opportunity to do so and it's easier to do so when there's a lot of job openings.”

Early retirements among workers 55 and up at the beginning of the pandemic also created a knowledge gap for the people left behind.

“When they left the workforce initially in March and April of 2020, it was a huge giant vacuum of talent, training, and information that was just in the blink of an eye, seems to be lost permanently and there (were) some locations that weren't able to ramp up the upcoming cohort quickly enough to take the place of those who left,” Smith said.

Historical recoveries indicate older workers tend to come back to the same career field they left but to positions that offer more flexibility and less day-to-day responsibility. It’s too early in the recovery to make that determination yet but the influx in experience could help companies get the next generation trained and ready to take over.

The recovery of workers aged 55 to 64 has helped fill a gap in the labor shortage but is not going to be enough to alleviate it.

“It certainly makes a difference,” Sanzenbacher said. “I just don't think it's enough to really like completely alleviated the shortage unless there's a complete change in what we've seen historically.”

As businesses and policymakers look for a way out of the shortage, they will also have to combat a changing U.S. demographic that will see a shrinking pool of people within the working age range.

It's not a 20-, 30-year problem anymore. It's in the next decade or two problem,” Sanzenbacher said.

Without being able to rely on current workers or those fresh into retirement coming back, people who are deciding to permanently sit out will need to be brought into the fold.

“We have to get the long-term unemployed in the labor market,” Smith said. “We have to make sure we train them; we have to make sure we find ways of educating and training people so that they can come to the labor force.”

Another pool of workers also exists abroad. U.S. immigration rates plummeted during the pandemic and still have not recovered, leaving another shortage of people in a growing economy.