"The concept of sitting in a rocking chair and retiring just doesn’t exist anymore"
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So says Barbara Rice, a former school teacher who now works at Borders in what she calls a "hobby job."
In fact, while the 20-40 year old set has increasingly been dropping out of the work force (NiLF), this older crowd has been the only thing preventing a total crash of the Labor Participation Rate:
"While many retirees are still focused on leisure activities, a growing number are returning to the work force. A recent study by Putnam Investments estimated that seven million previously retired people, or about 10 percent of the work force over the age of 40, are now back at work or looking for jobs.
And among those, the number of older retirees returning to work is growing quickly. Today, nearly one-fourth of all people in the 65-to-74 age group hold jobs, compared with just one in six just two decades earlier, according to the Bureau of Labor Statistics. Putnam’s study found that the number of workers in the 65-to-74 group grew three times as fast as the overall work force last year."
About one-third of those surveyed said they were returning to work because they needed the additional income to survive financially.
The Putnam Survey is very consistent with our prior look at labor force participation rates : Look Who’s Dropping Out of Labor Force.
Given the post-crash damage wrought on 401ks — now jokingly referred to as 201ks — by the popped tech bubble, its no surprise that Babyboomers and Retirees are going back to work. But the way the demographic trends have been running, it is somewhat disconcerting to see Students, Child Rearing Women,
and Over-qualified mid-level employees bailing out of the labor pool.
Time will tell if this is a short term phenomena, or an ongoing major shift . . .
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Source:
The Golden Years: Travels, Hobbies and a New Job, Too
ANNA BERNASEK
NYT, January 29, 2006
http://www.nytimes.com/2006/01/29/business/yourmoney/29reti.html
Graphic courtesy of NYT
Been meaning to point out–I haven’t seen the stats broken down by gender, but some of those dropouts may be child-rearing *men*. My husband is one. I happened to have the job with health insurance.
Anecdote: My mom, in her 70s, continues to work as a nurse doing at-home healthcare. Typical of her patients is the man who told her, “I have to keep working, or I couldn’t afford my medicines.” He is 91 years old and drives a hearse.
One thing you might want to look at when examining the 20-40 ‘dropouts’ is the fact that wage growth has been so stagnant in recent years. Seniors, who by and large are looking for supplemental income, not ‘career’ wages, may not be as bothered by flattened wages as younger folks.
For example, childbearing women (or their spouses) who want to re-renter the workforce have to find jobs whose wages will cover their new childcare expenses on top of normal work expenses. I’ve seen several friends discover that at the end of the day, their job was not doing much more than breaking even in the family finances. “Why bother?” they thought, and exited. In a market with stronger wages that might not be the case.
fiat lux: I have heard the same argument made in Germany about 10 years ago. A good-earning software engineer complained that with the cost structure of child-rearing and daycare, the family would come out about the same whether his wife worked or not, so they were about to decide why bother scuttling back & forth to the office and putting stress to yourself every day. I don’t know what they finally did.
But typically such calculations are made on a current cashflow basis, leaving out the difficult to value effect of social security entitlements and other fringe benefits, like social contacts for kids & moms.
What an overwhelming detail, George: the 91yr old hearse driver keeping his job so that he can pay for his medicines.
Proof that the system works!
Who could take this man’s job away and send him to the box in the back? [Not those younger stiffs obviously.]
Please refrain from such seductive anecdotes –no one will remember the substantial remarks if you don’t.
fiat, the seniors (generally) have a history of frugality and decades of experience that have landed them in a position of owning rather than renting. So it comes down to the 91yr old hardware salesmen who will work for less because his needs are less. Ok, until he drops and health care costs allow that pesky 88yr old newbie to take over.
The kids, as you say, are not impressed.
“Who could take this man’s job away”
IBM could. Turn 53 and watch how fast you fly out the door. And this returning to work baloney? Borders, get real. What is the point of someone who loses their real job and then works at Borders for $6 per hour?
Is this a hint of the long term solution to the declining demographic trend? Oldsters taking the $7 an hour jobs that teenagers used to do? Why not — they are more reliable, more friendly, and tens of millions of them will need the cash.
At the same time there is talk of a serious know-how deficit in the basic manufacturing and tools area. Mechanics and plumbers and HVAC guys retiring with no one reliable to replace them. A lot of cutting edge machine shops are offering their own training programs. Maybe high school shop class will make a comeback.
So is it all part of a greater conspiracy to ensure that most of us wage slaves never reach a financial condition where we might be able to retire without a sense of total dread?
I’d humbly suggest that one major reason most of these seniors and aging boomers are returning to work is *fear*. Fear that they won’t be able to make ends meet as their health, benefits, and spending power deteriorate.
So now we not only have to suffer global wage arbitrage, but wage arbitrage from people who merely need to supplement their retirement benefits. We’re slowly working our way down the economic ladder to the lowest common denominator.
There may be something to the ‘work ethic’ argument about the older generation… but that assumes the younger generation has had the opportunity to prove whether or not they have a good work ethic as well.
I believe there is a similar trend in the 55-65 age group. I’m wondering how much this is just a demographic phenomenon (in the sense that there are so many boomers — “motivated” by a need for additional income or employer-sponsored benefits — that teenagers and 20-somethings are simply crowded out of low-rung positions).
Humm social darwanism at its finest.
Hurry up with my latte gramps I ain’t got all day.
I have often said ‘a job for everyone that wants one’ will be solved by ensuring no one does. We are well on our way to pretending to get paid for pretending to work. All jobs will become ‘hobby jobs’ offering what little pay that their occupants need to survive. Those that require more from their jobs, in power, in control, and in pay, will simply drop out. The enterprising will start their own businesses, and businesses will complain as always they can’t find any good workers to fill their competitive positions.
I suppose this would be a great time for seniors to discover their ‘inner writer’. they say that when writers get hungry, they write. Seniors often have the best stories to tell — and Hollywood is always looking for the next big story. LOL