The Tough Job Picture For The Middle-Aged

Unemployment peaked in mid-2003, but remains stubbornly high among the oldest workers. Why?

There does not seem to be any one answer. But exploring the reasons provides insight into the difficulty middle-aged and older workers face when hunting for a new job, or even a new career.

First, some data. The chart below shows the number of unemployed people in the U.S. from the most recent peak in the middle of 2003 to early 2007. The heavy blue line is the number of unemployed people 55 years of age and up. The other lines represent younger groups, from 20-24 (light blue) to 45-54 (bright green). What stands out is how slow the improvement has been for the workers 55 and older:

source: U.S. Bureau of Labor Statistics (click on the image for a larger version)

Here's a digest of bad news for older workers:

• a 1983 study in Canada found that unemployment frequency decreases rapidly after age 44, but unemployment duration rises sharply after 40. (Note 1)
• In 2001, HR consultants Drake Beam Morin surveyed over 16,000 job seekers in 21 countries, and concluded that workers over 50 take nearly twice as long to find a new job as do younger people.
• A 1999 Fortune article: "Once you're 55, it's almost impossible to find a job in business." (Note 2)
• Our own analysis of Bureau of Labor Statistics data shows that the duration of unemployment increases with age, except the the very oldest (65+) workers. Middle age workers are unemployed a median of ten weeks and an average of 20 or more:

source: this 2006 data. The average, or mean, is so much higher than the median, or midpoint, because there are a significant number of people who remain unemployed a long time, which pulls up the average.

• The U.S. Census Bureau studied duration of unemployment during 2001-2003 and also found that the length of unemployment spells increases with age. (note 3)

There is only one bit of dissenting information we could find. Outplacement firm Challenger Gray surveyed 3,000 discharged executives and managers in late 2004 and said that job search times for those 50+ were "virtually equal" to those for younger layoff victims. But that's not supported by the other data we could find.(note 4)

There's worse news for older workers who are victims of a layoff. Researchers found that even four years after an "involuntary job loss," the victims were 20% less likely to be employed than people their same age who stayed employed. (note 5)

Why Is It So Hard For Middle-Aged (and Older) People To Find Work?

A relatively small number of job seekers are looking for scarce senior positions, which don't come on the market that often. Their job searches can last many months.

A much larger reason is unstated but real age discrimination ... but that's another way of saying that firms have a preference for younger workers. And that's generally because they feel older workers are more expensive and less productive than younger ones.

It's true they usually cost less. A company could have two twenty-five year olds at almost any level for the price of one fifty year old. Some older workers make the mistake of pricing their services based on what they used to get, rather than what the competition is offering.

And those two younger workers can work until 10pm on a project with no fuss over missed soccer games.

And their skills could be more up-to-date than the fifty year old whose computer desktop is littered with every file they've ever worked on. Certainly some older workers haven't stayed current on the knowledge and skills necessary in their industry today. When a business doesn't hire them, that's not discrimination -- that's expected.

Fortune reported that when consulting giant Watson Wyatt Worldwide asked over 700 CEOs at what age people's productivity peaked, they said -- on average -- 43. And that means they view anyone older as a potentially overpaid, underperforming drag on the company.

The other major reason it's harder to find a job in middle age and beyond is simple supply and demand. The number of 55+ workers has increased from about 15 million twenty years ago to 25 million today. For the 45-54 year old group, the increase has been from 17 million to 34 million. If a firm is looking for a new hire with experience and a given skill set, the 45+ candidate pool is now almost twice as large. That's good for employers but bad for those looking for work.

What To Do

What's an older job-seeker to do? Learn to play defense ... and offense.

Defensively, they have to counter the notion that the want to get paid more than they are worth, that they aren't productive, and that they're out of touch. They should do their homework to understand what reasonable compensation is, be able to argue for their bottom-line value, and be up to speed with everything new that's happening in their industry.

Offensively, they need to argue for the unmeasured value they will bring. The problem with almost any productivity measure -- like "Lisa was here until 11 putting that Powerpoint together" -- is that they don't measure either objective or subjective quality. Whether in an office or on the shop floor, improved quality can mean bad decisions avoided, time-wasting dead ends never pursued, expert guidance provided to younger colleagues, or a better work environment created by a skilled and experienced supervisor. Those are the competitive advantages of a -- dare we say wise? -- older employee.

But Wait! No, Really, We Mean Wait ... A Few Years

There's long term upside for middle aged and older workers. Remember the "Baby Bust" that followed the Baby Boom? The Baby Bust grew up to be Gen X. Born from 1965 to 1977, that generation is relatively small compared to the Boomers before them and Gen Y following them.

The good news for older job seekers: there may not be enough Gen Xers to fill all the jobs currently held by the Boomers. Gen Y is big but won't be ready to run things for another twenty years, meaning that there should still be opportunities for younger Boomers and older Gen Xers to fill the gap.

So while the job picture for mid-career workers may be mediocre -- at best -- in the short and medium term, look for it to improve in the years ahead. But stay flexible and knowledgeable -- you'll probably need it!

---

Note 1: "Unemployment Experience in Canada," Monthly Labor Review, April 1983)

Note 2: "Finished at Forty," Fortune, February 1, 1999.

Note 3: "Dynamics of Economic Well-Being: Spells of Unemployment 2001–2003," U.S. Census Bureau, March 2006

Note 4: "Finally, 55 and Older Biggest Job Winners," Challenger, Gray, & Christmas Press Release, March 2004.

note 5: -- "Job Loss and Employment Patterns of Older Workers," by Sewin Chan and Ann Huff Stevens. Journal of Labor Economics, volume 19 (2001), pages 484–521

Chart data: Bureau of Labor Statistics. The BLS, which collects unemployment data, counts someone as unemployed if they want to work full time, or have been laid off from full-time jobs. People who've given up aren't counted.

This post is part of LifeTwo's Midlife Career Change FAQ covering all aspects of changing careers in middle age.

Technorati Tags: unemployment