Monday, March 14, 2005

Older Workers Taking Most of New Jobs: Follow-up

In a couple of follow-ups to Dean Baker's findings about older workers increasingly taking up jobs, Sue Kirchhoff writes in USA Today that "as striking, the percentage of individuals 65 and above in the workforce is the highest since 1970" and Seth Sandronsky writes for Political Affairs Journal that "increasingly, workers bear the risk for their retirements."

Kirchhoff notes that baby boomers, by aging into the over-55 group, are pushing up the numbers. However, it notes two separate trends. On the one hand, the 2001 stock market drop, which hurt stock portfolios, and reductions in pension and retiree health benefits mean some might have to keep working for financial reasons. On the other hand, surveys show many plan to keep working because they want to, even if they can afford to retire. According to Marisa DiNatale, economist at Economy.com, "the trend was there even before the economy went into recession; it's more of a structural shift," since the numbers continue a pattern of rising participation rates for older workers since the mid-1990s.

Sandronsky suggests that "economic insecurity is driving older Americans back into the labor market." He points to declining defined pension benefit plans and increased health care costs as two of the drivers. To avoid market risks, "employers are rushing to make employees bear the brunt of stock market investments for their retirements" and, "employers are increasingly choosing not to provide retirees with health insurance coverage" forcing retirees to spend more income from pensions or savings on health care. "For them, earnings from entering the labor market can help with rising health-care spending."

Sources: "Over 55? Get Back to Work!" Political Affairs Magazine (March 14, 2005); "Share of older workers increases" USA Today (March 13, 2005)

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