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Older adults want to work, but ageism limits participation: Economist

The US Bureau of Labor Statistics will release its monthly jobs report on Friday. Economists will be watching in particular for labor force participation metrics, as older Americans left the workforce following the pandemic. ZipRecruiter Chief Economist Julia Pollak joins Yahoo Finance to give insight into older workers and the labor force.

Despite the pandemic, Pollak indicates that older adults are now participating in the workforce at higher levels than before: "They are living longer and need to work longer to save up for a longer retirement. Another is policy related: we've made it easier for older people to work longer without being punished due to changes to social security. There's a culture shift because jobs are becoming more comfortable and pleasant so if you can stay home in your pajamas and work on a laptop, why not do it a long time?"

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

[AUDIO LOGO]

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JOSH LIPTON: We're just a few days away from the government's monthly jobs report. And one key metric economists are going to be watching for is labor force participation, especially when it comes to older Americans. There have been mixed takes on why older people left the workforce as a result of the COVID pandemic.

Joining us now is ZipRecruiter Chief Economist, Julia Pollak. Julia, it is good to see you. So our labor force is losing older workers. What is going on there, Julia? Walk us through the data.

JULIA POLLAK: Sure. Well, so that initial hit obviously was pandemic related job loss. But now, if you look at participation within that group, it is exactly what the Congressional Budget Office predicted it would be by now based on demographic trends. And the aging of the population.

Averages can lie. So this is a huge group of people. It's 54 million people. It's a growing group. And it is aging.

But if you look within each narrow age band, say you look at 65 to 74-year-olds, and 75-year-olds and older, you'll actually see that participation within each group is going up. We're on track to go from about 5% participation in the early 2000s among workers over the age of 75 to 10% in the 2030. And from about 20% among workers, 65 to 75 up to 30% by the 2030.

JULIE HYMAN: And what's driving that then? Is it a factor of economics that folks need to work? Is it a factor of that older Americans are healthier than they were in the past?

JULIA POLLAK: Yeah, one is that they're living longer. And so they need to work longer to save up for a longer retirement. Another is policy-related. So we have actually made it a bit easier for older people to work longer without being punished due to some changes to Social Security.

And there's a culture shift because jobs are becoming more comfortable and pleasant. And so if you can stay at home in your pajamas and work on a laptop, why not do it for a very long time?

JOSH LIPTON: Julia, do older workers talk about being discriminated against when they're looking for work?

JULIA POLLAK: We actually just ran a survey on this question. We asked all job seekers if they felt that they were facing discrimination. About 40% feel that they are being discriminated against. But among older workers aged 65 and up, 83% say that they are facing age discrimination.

JULIE HYMAN: So what does one do about that? That particular issue, Julia? Because as you say, if the participation rate is going up against older workers and discrimination is a big problem, is that something that's sort of being addressed in terms of workforce policy?

JULIA POLLAK: So participation would be much higher in this group were it not for the biases against older workers. We've asked employers about those biases, too. And they're quite Frank about them.

They're worried that older workers will not be physically strong enough to deal with the jobs that they have to face. I mean, remember, over 60% of jobs in America require people to stand on their feet and do pretty vigorous physical activity. So that is a major issue.

There's also a misconception I think among employers that older workers are just not tech savvy. If you look at all the grannies and grandpas sitting on their phones and browsing through the internet, it's not always true.

JOSH LIPTON: And, Julia, just broadening out the discussion here. You also recently published, the latest new hires survey. What did you find in that data, Julia?

JULIA POLLAK: So we saw that it took workers a lot longer to find jobs in the last quarter. And that is consistent with a slowdown in hiring rates that we've seen lately. And yet despite that, workers continued to get counteroffers from their old employers when they said they were quitting. They continued to get recruited at high rates. And so it's a funny situation where the workers who are getting hired, and the companies that are hiring are still extremely, extremely competitive, even though there's been a bit of a slowdown.

JULIE HYMAN: And so, Julia, put this all together for us as we look ahead to Friday's jobs report. What are your expectations given the macroeconomic signals and the signals that you have at your disposal there to?

JULIA POLLAK: Sure. So US economic growth was much stronger than anyone predicted in 2023. But hiring did slow down a lot. There are signs now that it could actually be heating up again. For the last two months online job postings have risen, after a 20-month slide.

We're seeing leading economic indicators turn upwards. We're seeing even manufacturing indicators turn positive. And so I think we shouldn't be surprised if there's a nice big number on Friday.

JOSH LIPTON: All right. We'll see. Julia, thanks as always, for joining us.

JULIA POLLAK: Thanks, Josh.