Fact Sheet

AARP Public Policy Institute

At 5.8 percent, the October 2012 unemployment rate for the workforce aged 55 and over was little changed from September’s 5.9 percent but substantially below the rate of 7 percent in October 2011.

About 1.9 million people aged 55 and over were unemployed in October.Older jobseekers were unemployed for an average of 57.7 weeks in October,

up from 55.7 weeks in September. Average duration of unemployment for this age group has been close to or above one year since March 2011.

The Employment Situation, October 2012: Relatively Little Change for Older Workers1

Sara E. RixAARP Public Policy Institute

Employment Change by Sector2

Total nonfarm payroll employment rose by 171,000 in October, compared to 148,000 in September.3 Some of the largest gains were in professional and business services (51,000), retail trade (36,400), health care (30,500), and leisure and hospitality (28,000). Government employment fell by 13,000.

Unemployment Rates

The seasonally adjusted overall unemployment rate was 7.9 percent in October, little changed from September’s 7.8 percent. About 12.3 million people aged 16 and over reported that they were out of work and looking for a job in October, some 170,000 more than in September.

The October unemployment rate for people aged 55 and over was 5.8 percent, also little changed from September (5.9 percent) but well below the rate of 7.0 percent one year earlier. In December 2007, the unemployment rate for this age group was only 3.2 percent; it reached a high of 7.3 percent in August 2010.

The unemployment rate for older men fell from 6.4 percent to 6.1 percent between September and October, while that for older women showed less change—5.6 percent in September and 5.5 percent in October4 (figure 1). About 1.9 million people aged 55 and over were unemployed in October, 17,000 fewer than in September. Older jobseekers were 16 percent of the unemployed in October.

The unemployment rate for the workforce aged 55 and over remains lower than rates for the total labor force, prime-age workers (ages 25–54), and, especially, the workforce aged 16–24 (figure 2). For all age groups, both the number of unemployed and the unemployment rate are higher than they were at the start of the recession, with increases greatest for the older workforce (table 1). In all age groups except the oldest in table 1, the number with jobs in October was still below what it was in December 2007.

Each age group has seen some improvement in its employment situation over the past year (table 2).

The Employment Situation, October 2012: Relatively Little Change for Older Workers

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Duration of Unemployment

Once unemployed, older workers are, on average, out of work longer than their younger counterparts. This pattern continued in October. Average duration of unemployment for older jobseekers rose from 55.7 weeks in September to 57.7 weeks in October.5 Among younger jobseekers, average duration also

rose somewhat—from 37.2 weeks to 37.8 weeks (table 3).

Since March 2011, the average duration of unemployment for older jobseekers has been close to or above one year. Precise comparisons prior to January 2011 are not possible because of changes in the way duration is coded.6 Nonetheless, both younger and older

Figure 1Unemployment Rates for Men and Women Aged 55 and Over, December 2007–October 2012*

*The rate for women is not seasonally adjusted. See text note 4. Some of the numbers in this figure may differ slightly from earlier versions due to revisions by BLS.Source: U.S. Department of Labor, Bureau of Labor Statistics, labor force statistics from the Current Population Survey, http://data.bls.gov/pdq/querytool.jsp?survey=ln.

Figure 2Unemployment Rates by Age, December 2007, June 2009,

September 2012, and October 2012*

*Some of the numbers in this figure may differ slightly from earlier versions due to revisions by BLS.Source: U.S. Department of Labor, Bureau of Labor Statistics, labor force statistics from the Current Population Survey, http://data.bls.gov/pdq/querytool.jsp?survey=ln.

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workers have been finding it much harder to become reemployed than after previous recessions.

As of October, more than half of all older jobseekers (53.1 percent) were “long-term unemployed”; that is, they had been out of work for 27 or more weeks, down slightly from the month before, when 54 percent were among the long-term unemployed.

The percentage of older jobseekers who are among the long-term unemployed (a figure that is not affected by the top coding change in duration of unemployment) has grown significantly in recent years. In December 2007, only

22.9 percent of the older unemployed workforce was long-term unemployed. The comparable figure for the end of the recession, June 2009, was 38.2 percent (table 4).

Labor Force Participation

The population aged 55 and over is more likely to be in the labor force today than at the start of the recession; this age group had a participation rate of 40.6 percent in October, up from 38.9 percent in December 2007. October’s rate was also somewhat higher than September’s—40.4 percent. Between September and October, the

Table 1Selected Employment Indicators, December 2007 (Start of the Recession) and

October 2012, by Age Group (seasonally adjusted)

Age

Number Employed (000s)

Number Unemployed (000s) Unemployment Rate

Dec. 2007

Oct. 2012

% Change

Dec. 2007

Oct. 2012

% Change

Dec. 2007

Oct. 2012

% Change

Total, 16+* 146,273 143,384 -2.0% 7,645 12,258 60.3% 5.0% 7.9% 58.0%16–24 19,599 18,008 -8.1% 2,600 3,441 32.3% 11.7% 16.0% 36.8%25–54 100,461 94,422 -6.0% 4,233 6,975 64.8% 4.0% 6.9% 72.5%55+ 26,243 30,942 17.9% 859 1,920 123.5% 3.2% 5.8% 81.3%

*Estimates for specific age groups may not add up to the total 16+ because the seasonal adjustments are made independently. Some figures in this table may differ from those reported previously due to revisions by BLS.Source: U.S. Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, http://data.bls.gov/pdq/querytool.jsp?survey=ln.

Table 2Selected Employment Indicators, October 2011 and October 2012

(seasonally adjusted)

Age

Number Employed (000s)

Number Unemployed (000s) Unemployment Rate

Oct. 2011

Oct. 2012

% Change

Oct. 2011

Oct. 2012

% Change

Oct. 2011

Oct. 2012

% Change

Total, 16+* 140,297 143,384 2.2% 13,759 12,258 -10.9% 8.9% 7.9% -11.2%16–24 17,744 18,008 1.5% 3,545 3,441 -2.9% 16.7% 16.0% -4.2%25–54 93,356 94,422 1.1% 8,097 6,975 -13.9% 8.0% 6.9% -13.8%55+ 29,165 30,942 6.1% 2,185 1,920 -12.1% 7.0% 5.8% -17.1%

*Estimates for specific age groups may not add up to the total 16+ because the seasonal adjustments are made independently. Some figures in this table may differ from those reported previously due to revisions by BLS.Source: U.S. Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, http://data.bls.gov/pdq/querytool.jsp?survey=ln.

The Employment Situation, October 2012: Relatively Little Change for Older Workers

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number of older Americans not in the labor force fell by about 28,000.7

The Older Employed Population

Despite continuing high unemployment rates, millions of older Americans have succeeded in remaining employed, and the number with jobs has increased in most months since the start of the recession (figure 3). Since December 2007, the employed population aged 55 and over has increased by almost 4.7 million, or by nearly 18 percent (table 1).

Another way of assessing the employment situation is with the share or percentage of an age group that is employed (the employment-to-population ratio). Table 5 provides that percentage for four age groups: 16+, 16–24, 25–54, and 55+.

The figure remained relatively stable during the recession for those aged 55 and over and is now about a half percentage point higher than it was at the start of the recession. In contrast, the percentages employed in younger age groups fell during the recession and remain lower than they were in December 2007.

Part Time for Economic Reasons

Part-time work appeals to many older workers interested in scaling back while remaining attached to the labor force. However, not every part-time worker wants part-time work. In October, nearly 1.4 million older nonagricultural workers were working part time because they had no choice,8 about 60,000 more than the month before. These workers, also known as involuntary part timers, were employed part time for

Table 3Average Duration of Unemployment, Jobseekers Under Age 55 and Aged 55+,

January 2011, October 2011, September 2012, and October 2012* (not seasonally adjusted)

January 2011

October 2011

September 2012

October 2012

AgeLess than 55 33.9 wks 37.3 wks 37.2 weeks 37.8 weeks55+ 44.4 wks 52.9 wks 55.7 weeks 57.7 weeks

*See text note 6 for an explanation of the BLS change in the top coding of duration of unemployment. As a result of this change, comparable data go back only to January 2011. Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Employment and Earnings Online, and Labor Force Statistics from the Current Population Survey, Table A-36 (October 2012) at http://www.bls.gov/cps/tables.htm.

Table 4Long-term Unemployment, Jobseekers Under Age 55 and Aged 55+, December 2007,

June 2009, September 2012, and October 2012* (not seasonally adjusted)

December 2007**

June 2009**

September 2012

October 2012

AgeLess than 55 16.6% 26.4% 38.7% 39.8%55+ 22.9% 38.2% 54.0% 53.1%

*Long-term unemployed: 27 or more weeks.**December 2007 was the official beginning of the recession and June 2009 the official end.Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Employment and Earnings Online and Labor Force Statistics from the Current Population Survey, Table A-36 (October 2012), at http://www.bls.gov/cps/tables.htm.

The Employment Situation, October 2012: Relatively Little Change for Older Workers

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economic reasons—that is, because of slack working conditions or because they could not find full-time work. In October, they were 4.7 percent of all older nonagricultural workers, compared to 4.5 percent the month before. In October (as in September), older women were somewhat more likely than older men to be working part time for economic reasons—5.1 percent and 4.2 percent, respectively.

The proportion of older nonagricultural workers working part time for economic reasons in October was still much higher

than it was at the start of the recession, when only 2.4 percent of older workers were working part time because they could not find full-time work.

Multiple Jobholders

Working more than one job may indicate an inability to find a job that pays enough or provides enough hours. Relatively few workers aged 16 and over—4.8 percent—were multiple jobholders in October, slightly below the figure at the start of the recession (5.2 percent).9 In October, 4.8 percent of all workers aged

Figure 3Number of Employed Persons Aged 55 and Over, December 2007–October 2012*

(in thousands)

*The numbers in the figure may differ slightly from those that appear in earlier versions due to adjustment by BLS.Source: U.S. Department of Labor, Bureau of Labor Statistics, labor force statistics from the Current Population Survey, http://data.bls.gov/pdq/querytool.jsp?survey=ln.

Table 5Share of the Population Employed (Employment-to-Population Ratio), December 2007,

June 2009, October 2011, September 2012, and October 2012, by Age Group* (seasonally adjusted)

AgeDecember

2007**June

2009**October

2011September

2012October

201216+ 62.7% 59.4% 58.4% 58.7% 58.8%16–24 52.2% 47.1% 46.4% 46.2% 46.4%25–54 79.7% 75.9% 74.8% 76.0% 76.0%55+ 37.7% 37.4% 37.7% 38.0% 38.2%

*Some of the numbers in this table may differ slightly from earlier versions due to revisions by BLS.**December 2007 was the official beginning of the recession and June 2009 the official end.Source: U.S. Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, http://data.bls.gov/pdq/querytool.jsp?survey=ln.

The Employment Situation, October 2012: Relatively Little Change for Older Workers

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55 and over—both male and female—held more than one job.

Self-employment

Some wage and salary workers move into self-employment upon job loss. Published monthly self-employment figures are available from the Bureau of Labor Statistics (BLS) only for unincorporated workers employed in their own business, profession, trade, or farm. (BLS regards self-employed workers who report being incorporated as employees of a corporation and thus classifies them as wage and salary workers.) The number of older, unincorporated self-employed workers in nonagricultural industries increased from fewer than 2.6 million in December 2007 to about 3.0 million in October 2012, some 83,000 fewer than in September.10 As of October, 10 percent of older nonagricultural workers were self-employed, down from 10.3 percent in September. For much of the period since the start of the recession, this figure has fluctuated around 10 percent.

Interest in Working

Most older people who are out of the labor force say that they do not want a job (97 percent in October, a figure that has shown little fluctuation since the recession began). After falling by nearly 200,000 between August and September, the number of older people out of the labor force but expressing interest in work rose by about 60,000 in October. Approximately 1.7 million older non-labor force participants said that they wanted a job in October. At the start of the recession, 826,000 older non-labor force participants reported wanting to work; by the recession’s end in June 2009, that number had risen to 1.2 million.11

At 192,000, the number of older discouraged workers was somewhat lower in October than it was in

September (215,000); the discouraged were almost 12 percent of the population of older people who were not in the labor force but who wanted a job. Discouraged workers are not looking for work because they believe that no work is available, employers would find them too old, they lack the necessary schooling/training, or they face other types of discrimination.12 When the recession began in December 2007, only 53,000 older people were classified as discouraged workers.

A Closer Look at the Older Workforce13

The older labor force is dominated by workers and jobseekers aged 55–64; about three-fourths fall into this age group. Their labor force participation rate is about three and a half times that of people aged 65 and over (65.2 percent vs. 18.5 percent in October 2012). Since the start of the recession, this rate has increased considerably more for those aged 65 and over than for those aged 55–64 (table 6).

Not surprisingly, the share with jobs (the employment-to-population ratio) varies dramatically by age as well. And although both age groups (55–64 and 65+) have seen increases in the number employed since the start of the recession, the increase has been greater for the older group. Also over the same period, the employment-to-population ration has increased by more than 10 percent for the older group but declined for those aged 55–64.

Both age groups have seen sharp increases in the number unemployed since the start of the recession. The unemployment rate has also increased for both age groups. As was the case in September, average duration of unemployment was considerably higher for the older age group in October (70.6 weeks vs. 53.5 weeks).14 However, the percentage that could be classified as

The Employment Situation, October 2012: Relatively Little Change for Older Workers

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long-term unemployed was somewhat lower (table 6).

Concluding Observations

For the older population in the United States, October’s employment news was neither especially encouraging nor especially discouraging. At 5.8 percent, the unemployment rate for those aged 55 and over was little changed from what it was in September. Since January

2012, the rate has fluctuated between 5.8 percent and 6.5 percent.

The share of the older population with jobs (employment-to-population ratio) was up slightly in October, which is good news. The proportion of older involuntary part-time workers rose slightly, but the number of discouraged workers fell somewhat, and the number of older multiple jobholders remained unchanged. Once again, however, average duration of unemployment crept upward for

Table 6Selected Employment Indicators for the Population Aged 55–64 and 65+,

December 2007 and October 2012 (not seasonally adjusted)

Indicator 55–64 65+Population (in 000s)

December 2007 33,025 36,603October 2012 38,501 42,413

Labor Force (in 000s)December 2007 21,175 5,984October 2012 25,084 7,852

Labor force participation rateDecember 2007 64.1% 16.3%October 2012 65.2% 18.5%

Number employed (in 000s)December 2007 20,533 5,787October 2012 23,702 7,406

Share of the population employed*December 2007 62.2% 15.8%October 2012 61.6% 17.5%

Number unemployed (in 000s)December 2007 642 197October 2012 1,382 446

Unemployment rateDecember 2007 3.0% 3.3%October 2012 5.5% 5.7%

Percentage long-term unemployed**December 2007 22.7% 23.4%October 2012 53.3% 52.7%

*Employment-to-population ratio.**Long-term unemployed: 27 or more weeks.Source: U.S. Department of Labor, Bureau of Labor Statistics, Employment and Earnings Online, January 2008 at http://www.bls.gov/opub/ee/empearn200801.pdf; and Labor Force Statistics from the Current Population Survey at http://data.bls.gov/pdq/querytool.jsp?survey=ln and http://www.bls.gov/cps/tables.htm (Table A-36, October 2012) .

The Employment Situation, October 2012: Relatively Little Change for Older Workers

Fact

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1 Unless otherwise specified, “older” refers to people aged 55 and over. Employment and unemployment figures are seasonally adjusted unless otherwise noted.2 Statistics in this Fact Sheet are from U.S. Department of Labor, Bureau of Labor Statistics (BLS), The Employment Situation—October 2012, USDL-12-2164 (Washington, DC: BLS, November 2, 2012); tables in BLS’s Employment and Earnings, January 2008 and July 2009; BLS tables at http://www.bls.gov/web/empsit.supp.toc.htm; and BLS’s labor force statistics from the Current Population Survey, available at http://data.bls.gov/pdq/querytool.jsp?survey=ln. Some numbers in this Fact Sheet may differ from those reported in earlier Fact Sheets due to adjustments by BLS. 3 BLS initially reported an increase of 114,000 in nonfarm payroll employment for September. This figure has been revised to 148,000. October figures are preliminary and may be revised as well. 4 The unemployment rate for men aged 55 and over is seasonally adjusted; the rate for women aged 55 and over is not. According to BLS, unemployment for women in this age group does not appear to show seasonal variation.5 Duration of unemployment figures are not seasonally adjusted.6 The Bureau of Labor Statistics changed its top coding of duration of unemployment. Beginning in January 2011, the Current Population Survey has allowed respondents to report durations of unemployment of up to five years, rather than up to only two years. This change was introduced because of the “unprecedented rise in the number of people with very long durations of unemployment during the recent labor market downturn.” Before this change, any duration of unemployment greater than two years was coded as two years. Estimates of average duration of unemployment are higher with a five-year upper limit than with a two-year limit. Duration prior to 2011 cannot be recalculated as the data for those unemployed longer than two years are unavailable. See U.S. Department of Labor, Bureau of Labor Statistics, Changes to Data Collected on Unemployment Duration, at http://www.bls.gov/cps/duration.htm. 7 Numbers of people out of the labor force are not seasonally adjusted.8 Involuntary part-time figures are not seasonally adjusted.9 Multiple jobholder figures are not seasonally adjusted.10 Self-employment figures are not seasonally adjusted.11 Data in this section are not seasonally adjusted.12 Discouraged workers are a subset of the marginally employed (i.e., people who are not in the labor force who want a job and are available for work and who have searched for work during the prior 12 months but not in the prior four weeks). See BLS at http://www.bls.gov/cps/lfcharacteristics .htm#discouraged. 13 Data in this section are not seasonally adjusted. 14 These statistics do not appear in table 6 because there are no comparable figures for December 2007. See text note 6 for an explanation of the change in top coding of duration of unemployment.

Fact Sheet 274, November, 2012

AARP Public Policy Institute601 E Street, NW, Washington, DC 20049www.aarp.org/ppi202-434-3910, ppi@aarp.org© 2012, AARP.Reprinting with permission only.

Endnotes

older jobseekers in October, as it did in September. Older jobseekers continue to face bleak reemployment prospects.

NOTE: Caution is urged in interpreting month-to-month changes in some of the employment figures. Not all figures are seasonally adjusted, and the numbers

can and do fluctuate substantially over the short term due to sampling error or the small number of individuals in a particular category who may have been interviewed. Numbers over a longer period or annually adjusted figures generally provide a more reliable picture.

The Employment Situation, October 2012: Relatively Little Change for Older Workers