New research by the Schwartz Center for Economic Policy Analysis (SCEPA) sheds light on a critical issue: the hidden and persistent unemployment among older workers.
Despite significant declines in overall unemployment since 2010, this progress has not been uniform across all age groups. Older workers face more persistent unemployment compared to their younger counterparts. According to SCEPA’s inclusive unemployment measure, older workers (those aged 55 and up) accounted for 16 percent of the unemployed in 2010 yet today they comprise 23 percent. This discrepancy indicates that while younger workers have seen considerable improvements in job opportunities, older workers have not enjoyed the same benefits.
SCEPA’s Inclusive Unemployment Metrics Reveal More
SCEPA's approach to measuring unemployment goes beyond the traditional metrics used by the Bureau of Labor Statistics (BLS). The BLS's official unemployment count (also known as “U-3”) focuses on those actively seeking work in the past four weeks, while its broadest unemployment count (U-6) includes discouraged workers who haven’t looked in the past month but have looked in the past year. Since 2010, SCEPA has advocated for the use of its own U-7 unemployment metric, which includes long-term discouraged workers—those who have not actively searched for a job in the past year but report that they still want employment. The revelation? An additional three million unemployed workers today are not included in standard BLS reports, and one million of these people are 55 and older.
Changing and Uneven Unemployment Landscape Over the Years
This SCEPA U-7 research note delves into various forms of unemployment: official, marginally attached, part-time for economic reasons, and long-term discouraged workers. The official unemployment rate only counts people without a job who actively looked for work in the past four weeks. Marginally attached workers are people without a job who want to work but have not looked for work in the past four weeks, yet have looked in the past 12 months. Part-time workers for economic reasons are currently employed people who work less than 35 hours a week due to economic reasons such as slack work or unfavorable business conditions, inability to find full-time work, or seasonal declines in demand. Long-term discouraged workers are people who have reported that they want a job but have not searched for work in the past year. The share of older workers in each category has grown over the past decade, but not evenly. Notably, the age composition shifts since 2010 in official unemployment and long-term discouraged workers are dramatic. While there are now proportionally fewer workers aged 25-54 who have been without a job and actively searching for work in the past four weeks, more older workers are still actively looking for work without having found employment. Equally striking, more older workers today say they want a job but have not looked for work in the past year than in 2010.
The findings of this research note are eye-opening. They reveal that the reduction in unemployment over the past decade stems largely from younger workers finding jobs, while older workers continue to struggle. This more persistent unemployment among older workers affects many facets of their labor and lives. For older workers who are employed, this persistence may decrease their bargaining power with employers as they seek fair wages and decent working conditions. Older workers experiencing unemployment may face significant financial hardship and may start claiming Social Security earlier than they would otherwise to replace their lost wages. This early claiming will reduce their guaranteed lifetime income and increase their financial fragility throughout their remaining years. SCEPA’s new unemployment research highlights the need for targeted policies and support for older individuals in the workforce, ensuring that the benefits of a recovering economy are distributed more evenly across all age groups.