Federal labor statistics show that older Americans are much more likely now to be holding on to their careers—because they can’t afford to retire—while vast numbers of young Americans are failing to get on track in the job market. In the face of losses in home equity and 401(k)s, many older workers are delaying retirement. Meanwhile, the ailing labor market has created a backlog of several years’ worth of recent college graduates who can’t find work, threatening to lock in a “lost generation.” The kicker: Unless American institutions find a way to get more young workers onto successful career paths, there will not be enough people paying into the Social Security and Medicare programs to adequately fund future benefits. How’s that for a bad situation? —KDG
From January 1948 through September 2009, the labor-force-participation rate of older Americans came within 8 percentage points of the rate among younger people in only one month. Since October 2009, the difference between the two groups has been 8 percentage points or less in every month. One side can’t start working; the other can’t stop.
In some ways, the change reflects positive trends. Compared with the first decades after World War II, fewer young people are working partly because more of them are in school. And more seniors are working partly because rising education levels have allowed more of them to find satisfying careers they prefer to continue.
But most seniors extending their careers are doing so from necessity, because “the resources they were counting on to retire just aren’t there,” says John Rother, the policy director at AARP, the giant senior lobby. In the same way, the rapid recent decline in employment among young people hasn’t been offset by a commensurate rise in college attendance.