Between 2010 and 2020, the labor force participation rate for U.S. workers ages 55 and older essentially stayed flat, per the Bureau of Labor Statistics. That rate, which indicates the percentage of people who are working or actively looking for work, hovered around 40% during the decade for those 55 and up. Since the beginning of COVID-19, however, older people in the workforce have taken a major hit.
According to the Bureau of Labor Statistics and research by LaborIQ by ThinkWhy, the labor force participation rate for workers 55 and up has declined by about 2% since the pandemic began. While this drop is the same as the national average for all workers, a drop like that didn’t even happen during the Great Recession, when labor force participation for older workers actually increased by 1% between 2007 and 2009, a Bloomberg columnist recently wrote.
The pandemic has caused many older workers to leave the labor force, for a variety of reasons. Older people have suffered the most deaths from COVID by far, and many have been reluctant to risk exposure to the virus in the workplace. Older workers also may have been laid off or pushed out of their jobs, stepped up their plans to retire, or quit their positions to serve as caretakers or to baby-sit out-of-school grandchildren.
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.
“These people would need to get a new job upon re-entry, and that’s going to be exceedingly difficult. Older workers find employment much more slowly than younger workers,” Wanamaker says. “Losing momentum on the post-65 labor force participation rate means programs like Medicare and Social Security become insolvent more quickly, and we have to actually deal with the aging population issue.”
If Wanamaker is right, talent acquisition professionals may have a harder time filling jobs once taken by older workers, and full economic recovery will take longer than it otherwise would.
According to LaborIQ, there are noticeable differences in labor force participation among four groups of workers 55 and older. (For comparison’s sake, the labor force participation rate for workers 25 to 54 was 81% in February; for the U.S. as a whole, the rate was 61.4%.)
- For workers 55 to 59 years old, the participation rate in February hovered around 72%.
- For those aged 60 to 64, the rate was 57%.
- For workers 65 to 69, the rate was about 31%.
- Workers 70 to 74 had a rate below 20%.
- The rate for workers 75 and older was below 10%.
Workers between the ages of 55 and 64 – there were about 25.4 million of them in 2020, out of a total U.S. workforce of 160.7 million – were employed mainly in education and health services (24%), which includes teachers, physicians, nurses and childcare workers. Others in this age group worked in manufacturing (about 12%), wholesale and retail trade (about 12%) and professional and business services (also about 12%).
Meantime, workers aged 65 and up – there were about 9.8 million of them last year – also were employed primarily in education and health services (20%), followed by wholesale and retail trade and professional and business services, at about 14% each.
Through 2026, LaborIQ expects the participation rate for workers between 55 and 64, the biggest cohort of older workers, to remain steady at just under 65%.
LaborIQ by ThinkWhy forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.