Recession Accelerating Aging of U.S. Workforce, Survey Finds

By Carlos Torres

Sept. 3 (Bloomberg) -- The worst recession since the 1930s is accelerating the aging of the U.S. labor force as older workers try to rebuild savings and younger Americans, unable to find work, pursue higher education, a survey found.

“The current state of the economy has influenced nearly everyone’s calculations about work to some extent,” according the results of a survey by the Pew Research Center issued today in Washington. “But the recession appears to be having a very different impact, depending on age -- keeping older adults in the labor force and younger ones out of it.”

Almost four of every 10 workers 62 or older said they have extended their careers because of the economic slump, the survey found. Sixty-three percent of those 50 to 61, who are approaching retirement, said they will probably have to postpone their departure from the workforce.

“Many older adults, their retirement nest eggs battered by the bad economy, have already opted to hold on to their jobs,” the report said. “Even more on the threshold of retirement are reconsidering plans to stop working.”

The figures signal the plunge in home values and stock prices that led to a record $13.9 trillion loss in household wealth since the middle of 2007 will force Americans to work longer than they intended before the recession began. A jobless rate projected to reach 10 percent by early next year means younger workers with little experience will find few openings.

Dropping Out

About four out of every 10 Americans aged 16 to 24 said they haven’t succeeded in landing a job even after looking for work, the Pew survey showed.

“Younger adults -- like all adults -- are being hit hard by the recession, and some appear to have become discouraged and dropped out of the labor force,” said the report, conducted by the Pew Research Center’s Social & Demographic Trends project.

The recession is thus magnifying trends that began about two decades ago as older Americans, in better health than previous generations and with a desire to remain active, work past the age of 62, the report said.

Younger Americans, in turn, increasingly feel they need a college degree to get ahead in the workplace. Eighty-four percent of the 16 to 24 age group said a diploma was necessary, compared with almost three-quarters of the general population, the report showed. A similar question posed by the New York Times in 1978 found that only about half of all adults said a degree was a prerequisite for success, the report said.

The labor force participation rate of Americans 16 to 24 years old was 57.4 percent in July, down from a record 69.7 percent reached in August 1989, according to figures from the Labor Department.

The rate for those 65 and older was at 16.9 percent in July, up from a record-low 10.4 percent in January 1985.

The survey was taken from July 20 through Aug. 2 and reflects the responses of 1,815 people interviewed. The margin of error was plus or minus 2.7 percentage points for all respondents except for the 16 to 24 age group, where it was plus or minus 5.3 percent.

To contact the reporter on this story: Carlos Torres in Washington at ctorres2@bloomberg.net