A growing number of older workers are losing their jobs as the economy weakens. And many are having a harder time landing new positions. Please consider Out of a job and out of luck at 54.
Too young to retire, too old to get a new job. That’s how many older workers are feeling these days.
While it’s not easy to land a job in this weak economy, older workers are in a particularly tough spot. Corporate downsizings are hitting this group hard, with many companies looking to shed the higher-paid positions these employees often occupy. Even worse, older job seekers are discovering the search is even rougher as many employers shy away from hiring those closer to retirement than to the start of their careers.
The downsizings come at a bad time for older workers. Not only can’t they afford to retire, but many were counting on beefing up their 401(k) accounts in the years before they exit the labor force.
Older workers are increasingly getting the corporate ax these days. Among the unemployed age 55 to 64, nearly 42% had been fired or laid off, up from 32.2% a year ago, according to federal statistics for April. The figures are even grimmer for those age 65 and older, with 23.5% getting laid off, up from 10.4% in 2007. These older workers saw the largest percentage point increases of any age group during that time period.
My Comment: I talked about this in Demographics Of Jobless Claims. Here is a snip: Structural demographic effects imply that prospects in the full-time labor market will be poor for those over age 50-55 and workers under age 30. Teen and college-age employment could suffer a great deal from (1) a dramatic slowdown in discretionary spending and (2) part-time Boomer reentrants into the low-paying service sector; workers who will be competing with younger workers.
“When the market goes down, the more senior people are the first to go,” said Ellen Gottlich, president of Forty Plus of New York, which helps executives and professionals find new jobs.
After they get the pink slip, older workers spend more time on the unemployment line. Many lack the skills to search for jobs in today’s online world and to craft resumes and cover letters, experts say. And too often, they are told they are overqualified.
Take Dale Booth. Since being laid off from a computer business systems analyst post at National City Corp. in October, the 54-year-old resident of Medina, Ohio, has sent out hundreds of resumes. He’s gone to recruiting agencies and even had his daughter forward his resume to the human resources manager at the hospital where she works.
So far, he’s had only one interview. About 90% of the time, he gets no response and the other 10% he gets a form letter thanking him for applying.
His age, he thinks, is a factor because companies are concerned older workers won’t stick around and have higher medical costs. Also, though he has told recruiters his salary requirement is $50,000 – $35,000 less than he made at National City – Booth thinks employers view him as a costly hire.
My comment: Again this person is in the wrong demographic:50-64. Ironically, older part-time workers (pensioners) remaining in or reentering the labor force will be cheaper to hire in many cases than younger workers. The reason is Boomers 65 and older will be covered by Medicare (as long as it lasts) and will not require as many benefits as will younger workers, especially those with families. In effect, Boomers will be competing with their children and grandchildren for jobs that in many cases do not pay living wages. For more on boomer demographics, please see US and Canada Demographic Time Bomb.
Chuck Dunn knows he can’t afford to retire. The 56-year-old has had no choice but to liquidate his retirement account after losing his product development job with a high-end electronics manufacturer in October. Now he’s considering selling his house before he becomes a foreclosure statistic.
My Comment: Liquidating an IRA to support consumption is an enormous mistake. The proper response should be to immediately cut expenses. If the home had any equity it should have been sold. If not, the home should have been abandoned, and mortgage payments stopped. Finally, it was a huge mistake to not have a year’s worth of living expenses saved up. That should be everyone’s top priority right now.
Pink Slips Pile Up In Florida
The St. Petersburg Times is reporting Pink Slips Pile Up In Florida.
For April, Florida led the nation for the largest month-over-month drop in employment levels. From March to April, the state lost 25,300 jobs. Michigan, meanwhile, shed 18,600 positions over the month.
“It’s certainly not a position we’re used to,” said Rebecca Rust, economist with Florida’s Agency for Workforce Innovation. “We’ve been a leader in job creation for most of the last decade because of the construction boom, which was exacerbated by hurricane recovery. When you’re up so high, you have farther to fall.”
Florida’s dubious honor emerged from state and federal employment reports issued Friday. They showed that while the unemployment rate remained level in Florida from March to April, at 4.9 percent, that’s only part of the story. Month-over-month job loss is another indicator of a state economy’s health or lack thereof.
A spokesman for the state’s jobs agency said year-over-year comparisons are considered more accurate. But there, too, Florida’s showing was poor in April, with a net loss of 64,500 positions since April 2007. Michigan, with its long-suffering auto industry, fared worse by this metric, losing 72,100 for the year. In Florida, the biggest contributor to the job drain was the construction sector, responsible for 63 percent of the loss.
“There are some real structural problems affecting that state and they’ve been in dire straits much longer,” Sean Snaith, an economist with the University of Central Florida, said of Michigan, where unemployment is 6.9 percent. “Our problems are more a cyclical function of the insane real estate market we’ve been in. Once we get out of 2008, things will start to brighten.”
There is almost no chance that housing brightens in 2009. The recession is deepening, everyone who wants a house and can afford one already has one, and foreclosures are going to soar right along with rising unemployment.
Mike “Mish” Shedlock
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