David Frum

05.06.12

Retirement Was a Pre-Recession Luxury

Jed Graham at Investors Business Daily makes a very important observation: even as overall labor force participation plunges, the employment rate for workers over age 55 has reached a 40-year high, as baby boomers discover that they cannot afford retirement after all:

Among those 55-and-up, the employment-to-population ratio barely dipped even in the depth of recession and is now higher than at the end of 2007. The ratio among those 25-54 remains about 4 percentage points lower than before the recession started.

For the 65-69 and 70-74 groups, the employed shares are up 1.1 percentage points and 1.6 percentage points, respectively, over the past four years.

One reason for the increase in work among those 65 and up may be a belated realization that Social Security checks cut by early-retirement penalties might not go as far as anticipated.

Other evidence indicates that financial need is keeping older people in the workforce longer. The unemployment rate for those 55 and up was 6.2% in March, up from 3.2% at the start of the recession. The percentage of those 55 and up working or seeking work has climbed even faster than their employment.