Though the country is aging, there are fewer older Americans in the workforce
Though the country is aging, there are fewer older Americans in the workforce
A lot of people have come back to the workforce in the last few years, yet the labor force participation rate is still below where it was just before the pandemic hit in March 2020.
So-called “prime age” workers — those 25 to 54 — are working jobs at a higher rate than before the pandemic. But the picture gets more complex for older workers.
After COVID hit, a bunch of older Americans decided to retire early, because they could afford it, said Nancy Vanden Houten, lead U.S. Economist at Oxford Economics.
“These individuals are more apt to have retirement savings, more apt to be homeowners,” she said.
For those who might want to come back, work itself hasn’t gotten easier, noted Joe Brusuelas, chief economist at RSM. Some companies have turned to technology to fill in labor shortages.
“That’s often difficult for older workers to adapt,” Brusuelas said. “Therefore, we’re seeing many people just drop out of the workforce.”
Some older Americans have come back in strong numbers, especially women 55 to 64, according to Vanden Houten. But she said that the participation rate isn’t likely to ever fully rebound, because the country as a whole is getting older.
“As the population ages,” she said, “labor force participation in the aggregate is going to trend lower and labor supply is a key component of economic growth.”
And that spells big challenges for the economy in the years ahead.
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