The Bureau of Labor Statistics (BLS) today reported a headline unemployment rate (U-3) for workers 55 and over of 3.1% in June, up 0.3 percentage points from May. Despite low unemployment rates, the job market is not as good it looks because 1.1 million older workers are excluded from official unemployment statistics.
In their broader measure of unemployment (U-6), BLS also includes "discouraged workers." But BLS only counts as discouraged those who looked for a job in the last year. The one-year cutoff is arbitrary, because it excludes the 1.1 million people who reported last month they want a job, but have not looked in the last year. They have not looked for the same reasons the officially counted workers are classified as discouraged - likely because they know they won’t find a job.
These 1.1 million “long-term” discouraged workers are not high-income retirees who only want to work if an attractive opportunity comes along. Instead, 38% are poor, similar to the 43% poverty rate of those included in the official unemployment tally of U-6. These poverty rates are higher than the poverty rate (22%) of people who say they are retired and don’t want a job.*
Older workers unprepared for retirement already face the difficult choice of working longer or experiencing downward mobility in retirement. Discouraged older workers do not get this choice, but instead must retire involuntarily and likely face drastic cuts to their living standard. Expanding Social Security and creating Guaranteed Retirement Accounts (GRAs) – universal, individual accounts funded by employee contributions, an employer match, and a refundable tax credit – would provide retirement income to protect workers from the effects of involuntary retirement.
* Poverty is defined as incomes below $23,240 for individuals and $32,740 for couples living in the 48 continental states, or twice (200%) the official Federal Poverty Level.
**Arrows next to "Older Workers at a Glance" statistics reflect the change from the previous month's data for the U-3 and U-7 unemployment rate and the last quarter's data for the median real weekly earnings and low-paying jobs.