Hopes of Baby Boomers returning to the workforce post-COVID may be all but dashed.
While the trend before the pandemic showed older workers delaying their retirement to save a bit extra, many today are leaving the job market earlier, and staying out.
This trend adds to a labor shortage that is keeping wages and inflation elevated, according to The New York Times.
Roughly 3.5 million people are missing from the labor force compared to what was expected based on pre-2020 trends, said Federal Reserve Chairman Jerome Powell during a speech last month.
Pandemic deaths and slower immigration make up part of the decline, but a large number of the missing workers — nearly 2 million — have retired, reported the NYT.
It appears unlikely these retirees will come back to work.
“My optimism has waned,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution. “We’re now talking about people who have reorganized their lives around not working.”
The number of Americans ages 18 to 64 working or actively looking for work has normalized to early 2020 levels, and labor force participation from workers 65 and older has lagged well below its pre-pandemic level, seeing a decline of around 900,000 workers, according to the NYT.
Powell said there is a structural labor shortage in the market.
“Despite very high wages and an incredibly tight labor market, we don’t see participation moving up, which is contrary to what we thought,” said Powell. “Part of it is just accelerated investments.”
There are about 1.7 job openings for every jobless person in America, and wages have been rising at the fastest pace in decades as a result, according to the NYT.
In June 2022, CNN reported that full-time workers made 6.2% more year-over-year than in April 2021.
The employee gap may lead to further interest rate hikes from the Fed as it attempts to get inflation under control. With paychecks rising quickly, businesses facing bigger labor bills may pass costs along to their customers, according to the NYT.
Having fewer workers available “lowers the landing pad that the Fed has to lower the economy onto,” Edelberg said. “Because of what’s happened in the labor force, they just have to soften growth even more.”
It is not all doom and gloom, however. Monthly payroll numbers from the Labor Department show that companies continue to add jobs amid complaints about a worker shortage, according to the NYT.
“Listening to Jerome Powell talk about labor supply, he seems resigned to the idea that there’s nothing left,” said Nick Bunker, economic research director for North America at Indeed Hiring Lab.
“There are more workers out there who can get hired and want to get hired,” Bunker said.
Get these off of gov assistance and you will have workers
Duh – why return to work – if you make money – they penalize your social security – so you work to make money to lose money on your entitled social security. No brainer
Change the laws and rules to help the middle class – I know that will never ever happen. IMO
Anything to screw the taxpayers. That social security money is your money that you paid in over many years. It makes no sense to deduct from social security if your working. Aren’t you still paying taxes and more SS on the money you earn? Our government is run by crooks and morons.
When my Daddy passed away, it was January 30. They got their SS payment on, I believe, the 3rd of the month. When my Mother and I went to the SS office after his burial to change his benefits to her, we were informed that Mother had to return his benefit for January because he died before month’s end. (SS is paid 1 month in arears.). So they think he didn’t incur any expenses in those 30 days? That is BS. That money should have been prorated.
The social security death benefit was enacted in 1935 and they STILL only give $255. Unbelievable.
The reason why baby boomers have quit or retired is because of the EEOC … doesn’t matter how qualified you are and how under qualified they are … if you are black , lesbian, gay or transgender, you will get hired.
And then they wonder why their companies and institutions are failing. And, of course, society suffers. We need excellence with people who are qualified, not mediocre whiners. Before long, they’ll want to award the win to the opposing sports team because “they haven’t won very many this season” . Whaaaa ;-(
There’s a reason boomers aren’t coming back into the work force.
Their being discriminated by most employers for their age. I first witnessed this when I hit 50.
When I hit 55, it was very difficult to find a good job. And now that I’m 60, you can forget it!
I have no empathy for employers who whine and cry that they can’t find good employees. They need to take a good look in the mirror as to who is the cause of this.
Yes you are correct. Age discrimination is alive and well!