Working Over Time: Workers 65 and Older in OregonNovember 21, 2019 When it comes to work, your 65th birthday isn’t quite the party it used to be. These days, instead of a cake that says “Happy Retirement” you’re increasingly likely to slice into one saying “It’s Not Quitting Time Yet!”
That’s because in the last few decades, the number of people who work later than the “traditional retirement age” of 65 has grown substantially. In fact, the population of workers in their 60s and 70s has been the fastest growing segment of the labor force in the last 10 years.
As you can see from the graph, the number of workers 65 and older in Oregon has more than quadrupled since 1992. People 65 and older now make up nearly 7 percent of all workers, up from 2 percent 25 years ago.
While it’s true our population is getting older overall with the aging of the large baby boomer generation, the rate at which older people participate in the labor force is increasing as well, from a low of about 10 percent in the mid-90s to nearly 20 percent in recent years. That means about one out of five people 65 and older have a job or are unemployed and looking for work.
This trend is likely to continue: the Bureau of Labor Statistics projects that nationally, the over-65 population is the only age group that will see a substantial increase in their workforce participation rates from 2018 to 2028.
Choice or Necessity?
Is an increase in older workers a cause for celebration or alarm? As is the case with so many economic questions, the best answer is probably, it depends.
Some people are working longer because they can. As Americans stay healthy and live longer, many see no reason to stop doing work they enjoy, especially since many jobs are less physically taxing than they used to be. Several of the jobs with the most workers 65 and older nationally are helping or creative professions that people may not find it easy to walk away from, such as clergy, musicians, and writers. Other low-impact professions such as real estate agents and lawyers are high on the list as well.
Another explanation is that people continue to work past 65 out of economic necessity. Fixed retirement income may not be enough to cover costs. Nationally, people in the bottom half of the income distribution are likely not to have any retirement savings, with Social Security often replacing only about 40 to 50 percent of pre-retirement income. Increasing housing and health care costs in many areas of Oregon are likely to create money pressures among the aging population that could keep them in the labor market.
Structural changes in retirement policies interact with these individual circumstances as well. Increases in labor force participation for older Americans coincide with increases in the minimum retirement age for full Social Security benefits. There has also been a large-scale shift by businesses from defined benefit to defined contribution retirement plans for their employees, which shift the risk of retirement investments from employers to workers.
There’s mixed evidence for either the choice or necessity hypothesis on their own – the most likely explanation is a combination, with the individual circumstances of workers varying widely.
Variation by Industry and Area
Just like the older population itself, workers 65 and older are not distributed equally across Oregon. By geography, metropolitan counties such as Washington, Multnomah, and Deschutes have the lowest percentage of workers 65 and older, around 6 percent. Older workers make up more than 10 percent of the workforce in rural counties such as Wheeler, Wallowa, Lincoln, and Lake counties, in line with their older populations overall.
Variation by industry in Oregon contains some surprises that defy simple explanation. Two of the sectors with the most older workers are real estate, which has few physical demands, but also natural resources such as agriculture, forestry, and logging – no one’s idea of physically easy work. Industries with relatively few older workers include manufacturing (5%) and professional and technical services such as engineering, research, or law firms (6%).
The rapid growth in the 65 and older working population has important impacts across the economy. Businesses that are aware of the growth in the older workforce can take full advantage of a skilled, age-diverse workforce (and avoid discriminating against employees on the basis of age). Job training and education partners will need to think about how to provide services to older Americans that are looking for a new challenge or a skills upgrade.
Workers who find themselves willing or needing to work later in life will need to think about how to sell the skills that help them excel in the workplace and how to continue to grow as employees. Fundamentally, it’s the same challenge that all workers face, but a few decades of experience and wisdom just may give older workers a leg up.