The latest leg of the economic expansion has been fueled in part by older Americans, as increased employment among workers who are at least 65 years old has accounted for an out-sized proportion of job growth.
The economy gained a little more than 2 million jobs over the past 12 months, according to the Bureau of Labor Statistics. The number of employed workers age 65 or older rose by 697,000 — about 36% of the total gain.
"I think the strong economy really has allowed more people to stick around in the labor force longer than they might have thought possible, especially 10 years ago," said Matt Rutledge, an economist with Boston College's Center for Retirement Research.
To be sure, part of the gain among workers older than 65 is due to demographic changes, with workers steadily aging into a new category but not yet retiring, so those gains in the group aren't necessarily new additions for the overall economy.
"It's unlikely that it's got to do with workers doing a lot of searching. We know that this is a group that doesn't have a lot of bargaining power," said Michael Madowitz, an economist at the Center for American Progress.
However, the gain by workers at least 65 years old over the last two years represents a sharp spike relative to total job gains. That ratio has typically been between 10% and 30%, Madowitz said, but it has been above that in the last two years.
The labor force participation rate for this group has been steadily improving over the last decade as well, indicating that there is more to the trend than just a larger number of older Americans. 25.5% of the people older than 65 without a disability were in the labor force in January, according to the BLS, up from 22.3% a decade earlier.
Over that same time span, the labor force participation rate for all workers has declined, and the rate for prime age workers is roughly flat, inching up to 83% from 82.5%.
Another possible reason for increased participation by older workers is changing education levels, Madowitz said. As a more educated generation enters into the 65 and above age bracket, there are an increased number of workers who are more likely to live longer and to have jobs that are not as physically demanding.
Economic reasons
For lower-income people around retirement age, the effects of the financial crisis may be a factor in keeping them in the workforce, said Gary A. Officer, president and CEO of Senior Service America.
"Many older Americans who wanted to retire lost everything. These are folks who were 50 years old then, 55, looking to retire in three or four years time, lost their jobs, lost their homes, lost their retirements. And all of a sudden they're starting back from scratch," Officer said.
Senior Service America works with local organizations around the country like Supportive Services Corporation in Buffalo, New York, sponsoring programs designed to keep or bring back older people to the workforce.
Anita Wolniewicz, a program director at Supportive Services, says she has seen strong interest from workers past retirement age that want to work. In one federal program that helps place older workers with non-profits while they look for more permanent work, 27% of participants have been 66 or older over the past year, Wolniewicz said.
Most of the interest comes from workers who recently left a different job and not workers being pulled off the sideline.
"It's a small percentage of them that come to us that have retired and decided, 'Eh, I'm bored.' It happens, but it's not the majority. The majority of the people that come to us are people who have continued to work," Wolniewicz said.
Some older workers still need to work but are trying to transition into jobs that are less physically demanding.
"We had a lady the other day, and she was a cleaner. It was a really physical job," Wolniewicz said. "And she wants to continue to work and yet she has some now physical limitations. Not that she can't work, but she can't do what she used to do."
New expectations
The increased participation by older Americans reflects changing views of both workers and employers about working past traditional retirement age, Rutledge said.
"The norms about working at older ages have changed quite a bit, and I think in a way that really is to the advantage of older workers who want to keep working. It's not seen as weird that you want to keep working in your late 60s or even into your 70s and 80s," Rutledge said. "And I think employers, in some ways, are actually more open to that."
However, Rutledge said if workers are planning on working until they turn 70 or older, that could make them unprepared for retirement if the economy takes a downturn while they're in their 60s.
Madowitz agreed, saying that a cooling job market could leave older workers counting on more income in a tough spot.
"The question in my mind is whether this is a pull or a push thing. If it's a pull thing and the labor market cools off even more, then we may see some of these people just hang it up and retire," Madowitz said. "If it's a push thing where these people really need the work to retire, or really need the work for the income because they can't retire, then a further cooling of the labor market could be really, really hard on this group."