The novel coronavirus pandemic has hit the American job market hard as it has gone from being the strongest in decades to a very weak one. And those who are finding it most hard to negotiate this job market are the older workers who have lost their jobs this year. Difficulty in getting rehired, even as the economy recovers, is forcing many older Americans to retire prematurely from the job market.
More than 22 million jobs in the spring were lost in the economy of the United States because of the pandemic. However it managed to recover half that number in the recovery in the following few months,
But the bouncing back of the job market has been as uneven and slow as the US economy itself.
“Young workers’ participation in the labor force has nearly fully recovered — likely reflecting both lower health risks from the virus and a decline in college enrollment — while the participation of older workers and women has recovered more slowly,” wrote Joseph Briggs, economist at Goldman Sachs (GS), in a note to clients earlier this month.
According to the Bureau of Labor Statistics, the force participation rate in the US labor force was about 61.5 per cent in November. That is 1.9 per cent lower than the number in February just the month before the pandemic hit the world and the US.
In October, there were about 830,000 “excess retirees”, according to estimates of Briggs, which represented about a quarter of the difference between the pre-pandemic workforce and the current workforce.
“We are not ready, financially or mentally, to retire,” Rachel E. from Virginia, who asked that her last name be omitted to protect her’s and her husband’s privacy, was quoted in a television news report as saying, The 66 year-old former government contractor was furloughed in April.
“Six figures a year to instant poverty with two words…. ‘you’re furloughed.’ It’s more like forced early retirement,” Rachel said in the report.
The health risks for workers of advanced ages because of Covid-19, many of the older people are also concerned of returning back to work or joining the labour force. There is also a sense of hesitancy among employers of hiring older people who could be more prone to getting infected with Covid-19.
It is likely that those who are retiring now will not return back into the job market. This group of people who are forced to take an early retirement fall in the category of permanent job losses which is an issue that has been a cause of worry for economists since the beginning of the pandemic.
Economic growth is adversely impacted by an increase in permanent unemployment which is more impactful in a consumer spending driven economy such as that of the United States.
According to Briggs, this year, the pandemic forced more workers applied for early Social Security benefits as shown by the Census Pulse Households Survey.
Briggs said that the early retirement trend should go away over time as the higher number of retirees will eventually be offset by lower permanent retirement number in the years ahead.
(Adapted from CNN.com)