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Jobless Rate for Older Workers at a Record High

Overall unemployment also rose in April, but job losses slowed

By: Art Dalglish | Source: AARP Bulletin Today | Updated May 11, 2009

The unemployment rate for older workers rose in April to its highest level on record as the nation’s job picture continued to darken, the Labor Department reported Friday.

Nearly 1.85 million people age 55 and older were out of work last month, the Bureau of Labor Statistics reported, and the jobless rate for that group rose to 6.4 percent. That topped the highest rate ever recorded—6.3 percent in September 1949—since the bureau began publishing figures for that age group in 1948.

Overall, the bureau reported, the nation’s unemployment rate reached 8.9 percent in April, a jump from 8.5 percent in March and 4.9 percent when the current recession officially began in December 2007. In all, 13.7 million people are jobless.

President Obama called the new numbers "a sobering toll." But he pointed to signs that "the gears of our economic engine do seem to be slowly turning once again."

Economists were encouraged that employers cut fewer jobs than expected. An additional 539,000 jobs were lost last month, while economists had expected 620,000. It was the smallest monthly job loss since October.

A total of 5.7 million jobs have been lost in the recession, the bureau reported.

While older workers are remaining employed at a greater rate than workers overall, their situation has been worsening rapidly.

The jobless rate for the over-55 group has more than doubled from a year ago, when it was 3.1 percent. The number of unemployed older workers has more than doubled as well, from 839,000 in April 2008 to 1.85 million last month.

That's partly because traditional factors that protected older workers from layoffs are eroding, said Andrew Eschtruth, spokesman for the Center for Retirement Research at Boston College.

For example, in past decades older men tended to hold their jobs much longer than their younger colleagues, making them more valuable to their bosses. But in recent years, the center's research shows, that tenure gap has narrowed.

At the same time, the center found that as the nation's manufacturing sector has shrunk rapidly, older workers have become especially vulnerable to being laid off.

The jobless numbers also illuminate the financial stresses that older workers are facing in the recession.

When times get tough, the labor participation rate—the proportion of people either employed or unemployed but looking for a job—usually falls.

That has been the case recently. For workers age 25 to 54, the participation rate dipped from 83.1 at the start of the recession to 82.8 percent last month. But for workers 55 and over, the rate rose over the same period, from 38.9 percent to 40 percent.

It's not surprising, given the shrinkage of older workers' 401(k) balances and their general sense of insecurity, Eschtruth said.

But staying in the labor market is an uphill battle, the data show. Last month, the BLS reported that just under half of unemployed people 55 or over had been looking for work for at least 15 weeks, and more than a quarter had been looking for 27 weeks or more. In both cases, job searches were longer than they were for younger workers.

Obama unveiled new steps Friday to help jobless people seek education and training while keeping their unemployment benefits.

The White House told reporters that the Labor Department will encourage states to update rules so that unemployed people can enroll in community colleges and other education or training programs without giving up their benefits. Meanwhile, the Education Department will urge colleges to increase financial aid to the unemployed.


Art Dalglish is an editor for AARP Bulletin.

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