subject: Retirement Age Seniors Are Taking Jobs From New Graduates [print this page] Older people are staying longer in the workforce in an attempt to recoup lost or ramp up their retirement funds. Young adults in the United States are being edged out of the labor force as senior workers either postpone retirement or find other jobs to rebuild retirement funds destroyed by the recent crisis.
In the US, the size of the US work force fell 6.3% for young workers, and increased a not-so-surprising 8.5% for professionals 55 years and above between December 2007 and January 2010, according to the study by the Economic Policy Institute (EPI).
"This is a troubling development; young adults are less prepared to deal with unemployment than other age groups. Without significant prior full-time work experience, many may not qualify for unemployment insurance, or the social safety net," an EPI representative said.
The crisis, caused by a housing credit shortfall, has had game-changing effects on the work force. With home values and retirement savings lowered or annihilated, senior workers have no choice but to either continue working or seek other employment.
The study also stated that even if young professionals were to enter the workforce, they were most likely to be in jobs below or outside their skills level.
"This is a serious drain on labor market potential - lower earnings, lower output, lower productivity, and the displacement of less-educated workers. Low wages also jeopardize the return to higher education."
"With such little financial security, young workers have less freedom to wait out a downturn and so they frequently take whatever job is available, even if it pays less than a job that matches their skill level," it said.
While young professionals account for only 13.5% of the total work force, 1 in 4 unemployed people in the United States are under the age of 25, according to the EPI study.
Otherwise, workers 55 years and above, who comprised 19.1% of the work force, are only 13.4% unemployed in comparison, it said.
On another note, the EPI study also notes that younger professional workers are also experiencing longer wait periods of unemployment, with more or less the average being less than six months to get a job in December.
Although the economy is seeing signs of improvement and growth is slowing gaining ground, the labor market's recovery path is seen to be slower than the market's ability to hire new people fast. The pace is probably too slow for any meaningful change in the young workers' fortunes.
"It is not enough for the economy to recover. Young adults need robust growth in the labor market to minimize the effects of the current recession," said the EPI.
