Is the U.S. Labor Force Losing Our Most Experienced Talent?

July 14, 2020
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Author: Glenn Hunter

The number of workers aged 65 and over has dropped about 10.0% since the coronavirus pandemic began, according to the U.S. Bureau of Labor Statistics (BLS). While 11,206,000 of these workers were in the labor force in February, that number had plummeted to 10,095,000 by May before recovering a little in June, to 10,289,000. For other age groups, the decline was much smaller in percentage terms, and the June rebound was more robust. The labor force participation rate for workers 65 and over fell as well, from 20.8% in February to 18.9% in June.

The novel coronavirus pandemic has forced many older workers into early retirement.

There could be several reasons for the churn among these older workers, who represent roughly 7.0% of the U.S. workforce. Chief among them is the fact that people 65 and older account for about 80.0% of the nation’s deaths from COVID-19. That puts older workers in jeopardy in one of two ways: either being laid off or furloughed along with other workers because of the pandemic, or going into their workplace every day and risking exposure to the virus and becoming seriously ill.

Mari Madlem is a case in point. Madlem, a 69-year-old cosmetics saleswoman at a Portland, Oregon department store, is worried about getting back to work in the midst of COVID-19. Madlem will need to return to her job, hopefully later this summer, because she can’t work from home, and her monthly Social Security benefit isn’t enough to live on. Even so, she frets about whether her customers and co-workers will take safety measures like wearing masks seriously. “I really have a lot of contact with people,” Madlem told USA Today. “If I don’t go back, I’m out of work.”

She isn’t alone with her concerns for her job. While about half of U.S. workers are now working from home because of the coronavirus, a study by the Center for Retirement Research at Boston College found that only about 45.0% of older workers are in professional-office occupations that allow remote work. In contrast, workers 65 and above account for significant shares of occupations demanding an on-site presence, including the likes of school bus drivers, dentists and doctors, security guards and janitors, the Brookings Institution says.

Related: More Women Than Men Are Losing Jobs During the Pandemic

Christine Garland, vice president of workforce development at the Center for Workforce Inclusion, points to BLS figures showing that the unemployment rate for those 55 or older fell to 9.7% in June, compared to just 2.6% in February. “There have been a lot of layoffs, and older workers are concerned they won’t be the first hired back” in a competitive environment once the economy recovers, Garland says. Age discrimination, or the perception of it, may be causing some of that concern, she adds. At the same time there may also be voluntary “self-selection” occurring, Garland says, with older workers exiting the workforce intentionally due to safety concerns about the virus.

Maura Porcelli, managing director of the Senior Community Service Employment Program at the National Council on Aging, generally agrees. “The concern is that as we reopen, employers may be hesitant to hire older workers because of their higher vulnerability to COVID-19,” Poricelli says. Adding to their woes, older workers who were laid off during prior recessions took much longer than younger workers to find new jobs, she says, and only about 10.0% who did find new work earned as much as before.

Perhaps with that in mind, plenty of older workers are happy to stay put when they can. Chas Humphreyson, a CEO Coach at Vistage Worldwide, says the chief executive of one 22-person company he works with has four employees who are 65 or older, and all of them are continuing to work.

A Changing Landscape

The novel coronavirus pandemic has led to early retirement for many older workers.

The nationwide drop-off in older workers stands in sharp contrast to the trend before the pandemic hit. The BLS says workers aged 55 and older made up the smallest segment of the labor force from 1970 to the 1990s, but during that decade they began increasing their share relative to younger workers. Due to more education, longer life expectancies and the need to save money following the Great Recession, workers aged 65 to 74 were expected to have a labor-force growth rate of 55.0% between 2014 and 2024. For those aged 75 and up, the growth rate was expected to be 86.0%. And by 2026, a U.S. Senate report said in 2017, aging workers were expected to make up nearly 25.0% of the labor force.

Now, though, the pandemic has changed the landscape.

Dr. Marianne Wanamaker, an associate economics professor at the University of Tennessee and a member of ThinkWhy’s Executive Advisory Board, believes the fall-off in older workers will be permanent. “All of the action is from labor force participation in February, to ‘retired’ in May,” she says. “Folks rarely come back from being ‘retired.’”

Meantime, Garland of the Center for Workforce Inclusion was asked whether the virus-induced fall-off could affect that prediction about older workers making up 25.0% of the workforce by 2026. “It’s hard to tell how work is going to change between now and then, because we’re only in the first few months of this,” she replied. “But if it goes on, it very well could.”

ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations and businesses across the U.S.