This growing desperation among older workers has given a boost to career coaches like Bruce Blackwell in White Plains, N.Y. He never saw 58-and-older workers five years ago, but now his business among that age group is thriving.
"People in that age group were either gainfully employed or, if not, often had the means to think about retiring before. But now I have plenty of people in their late 50s and early 60s knocking on my door," he said. "That age used to be a time where people could wind down their careers and enjoy the fruits of their labor if they wanted to. . . . Now they are fighting for work so that they can eventually enjoy financial stability."
There is at least one bright side to older workers remaining on the market, analysts said. It should reduce the total cost their retirement poses for employers and the federal government.
"If you've got workers who are capable of working and providing value to the economy, it makes sense to have the system set up so that they're not discouraged from doing that," said Heritage's Sherk.
But that's scant solace to aging baby boomers who lost their jobs and can't find new ones. The average duration of unemployment was 52.9 weeks in October for workers ages 55 and over, compared with 37.3 weeks for workers under 55, according to the Bureau of Labor Statistics.
Of course, unemployed older workers have always faced difficulty in the job market because they have higher salary expectations and employers are reluctant to hire job candidates they consider overqualified for lower-paying work. But now older workers face another hurdle: competition from other boomers.
Straining retirement plans and federal aid
"In 1983, you used to have relatively fewer older workers, and a lot more younger workers," said Barry Hirsch, a labor economist at Georgia State University in Atlanta. "But today, the relative size of the older population is much higher, and the younger population much lower, so the demographics have deteriorated for older persons and improved for young people."
Another factor holding back older workers from finding new jobs is the rapidly shifting technological skills demanded by many new jobs, especially in the information technology sector. "I don't think Facebook is out there hiring tons of workers my age," said Hirsch, who is 62.
Some economists fear the economy, even after it recovers, will not generate enough new jobs for older workers, leaving large swaths of boomers with inadequate retirement savings. That could leave the federal government and society to pick up the pieces.
"Unemployment in your late 50s and early 60s could really erode people's future retirement security in an ugly way," said Richard W. Johnson, the director of the Urban Institute's retirement policy program. People in that situation often start dipping into their 401k's sooner than expected or begin collecting Social Security benefits at age 62, leaving them with monthly benefits 25% below what they would have had if they waited until age 66 to start collecting.
Johnson says a likely scenario 10 years down the road is more elderly people get added to Medicaid assistance rolls -- the programs that help seniors with incomes up to 150% of the poverty line pay for premiums and prescription drug costs. "As baby boomers get into their 70s and 80s, we know Medicare premiums will continue to rise. In the case of those who couldn't find work and retired early, Social Security benefits will be smaller, too. That, to me, is a recipe for more poverty, unpleasantness and increased government outlays," Johnson said.
