Professor Casey B. Mulligan calculates that 16 year-old workers have fared worse than any other age group during the great recession from 2007 to 2010. The average 16 year-old worked 40% fewer hours in 2010 than 2007. For most age groups the fall in hours worked for that time-period looks to be 5-10%. However, for workers younger than 22 years old the drop in hours worked is much greater.
For workers older than 62, hours worked actually increased. Mulligan seems a bit befuddled by these number.
You might think it would make sense for employers to retain their most experienced workers, but downsizing employers tend to offer and encourage early retirement to people in their 50s and early 60s, who are paid more than recent hires and are starting to think about leaving the workplace.
But older workers can’t leave because they’ve taken on too much debt. E. S. Browning writes for the Wall Street Journal,
Most people used to pay off their debts before retiring. But as wages have barely kept up with rising prices over the past 35 years Americans have pushed debt higher, living beyond their means. Now, people are postponing retirement, cutting living standards or both.
Mulligan makes the point that the “ability to efficiently find a new job in a tough labor market is a skill, and people tend to accumulate that skill with age.”
Thousands of young people are missing out on developing that skill.
{ 4 comments }
for about a year now, the people who bag my groceries have been over 55. i have been living on cape cod and in dallas.
Did either person mention the true reason why older people are not leaving the workforce? That is the fact that their biggest assets their home and retirement savings MEASURED IN NOMINAL VALUES are down to their levels in 2003 and 1997 as measured by Case Shiller and S&P 500 indexes respectively.
But the nominal values really hide the true losses, their real values measured against the price of gold expose massive losses in both housing and especially paper securities. The S&P 500 was valued at 1200 in 1997 and now. Gold was 500 in 1997 and is 1800 now. So the real value of the S&P 500 measured in real money (GOLD) is 1200 x 500/1800 = 333 or its value in 1990 that is 21 years ago.
So the morals of the story are:
1. Older folks are behaving in a perfectly rational manner and staying in the work force in an effort to pay the bills.
2. More important moral: IT IS GOOD TO HAVE OLDER FOLKS IN THE WORK FORCE!!!! Thus they are adding value to the economy and increasing production and therefore wealth.
But the most important point of all is: Old people staying HAS NOTHING TO DO WITH younger folks getting into the work force. The Federal, State and Local governments and their volumes of regulations and insane policies (Think raids on Gibson Guitars and Minimum Wage) are the biggest reasons young people can not get into the work force.
Husband retired in 2004; we got out of debt, have a 401k which we are now getting ready to withdraw from . We also have stocks paying dividends which we spend, and several muni’s. We have one credit card and live modestly. People my age still working are poor money managers, can’t stop spending and refuse to pare down their lifestyle. If my generation with only a high school education could get work in the trades or have a business until retirement, then the young people today have no excuse not to be working. From my observation, many of them are lazy, even ones with college degrees, who never held a job as a teen. Teens today don’t do yard work to earn spending money. Much of the slacker mentality I blame on the parents.
16 year olds should not need to hold down jobs as my father did in the 1930′s. He had to quit school in the 10th grade to help feed his family. After WW2 he made enough to support a wife and 2 kids. Those days will not return in generations, if ever. Per the gini index, the US is already a 3rd world nation.
16 year old kids should be studying and doing homework. Maybe even doing chores around the house.
Comments on this entry are closed.