Job loss during the Great Recession is upending retirement savings plans for many older workers. Fewer than a quarter of workers age 50 and older who lost their jobs between mid-2008 and the end of 2009 found work within 12 months, much lower than the reemployment rate for younger workers. Older displaced workers who find jobs must often accept deep pay cuts. These challenges highlight the need for more training and employment services for those 50 and older.
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Delaying retirement is often viewed as the surest route to
financial security in old age. By working longer and
earning more, older workers can accumulate additional
Social Security, boost savings, and shrink the period
their retirement savings must fund. Employment at older
ages also expands the nation's labor pool, accelerating
productivity, increasing national income, and raising
living standards for both workers and retirees. Yet, this
strategy depends on whether older adults can find jobs.
Workers 50 and older are less likely than younger workers
to lose their jobs, but they take longer to find work
when they become unemployed, especially in the Great
Unemployment in the Wake of the Great Recession
Although job creation and destruction help distribute
resources efficiently and promote economic growth, this
process can impose hardships: displaced workers forfeit
wages, and being out of work takes financial, physical,
and emotional tolls.
Unemployment soared in the wake of the worldwide
financial crisis and the Great Recession. The economy
shed 8.5 million nonfarm private-sector jobs between
December 2007 (when the recession began) and December
2009 (Bureau of Labor Statistics [BLS] 2010a).
Monthly male unemployment rates averaged 10.3 percent
in 2009 and 10.5 percent in 2010, the highest since
reliable records began in 1948 (BLS 2010b). Job
prospects were only slightly better for women, whose
unemployment rate averaged 8.1 percent in 2009 and
8.6 percent in 2010. And 31 percent of unemployed
adults had been out of work for more than a year in the
second quarter of 2010 (BLS 2010c).
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