For much of the time that we’ve been producing our blog (since 2013), we have questioned the state of employment in the U.S.  With more than 94 million age-eligible workers on the sidelines and a Labor Participation Rate of only 62.8% (down from >66% before the Great Financial Crisis), we felt that the headline unemployment number of 3.7% was misleading. Well, maybe the article today in the Wall Street Journal will finally raise some awareness to the plight of older American workers (those at 55 or older) and the long-term implications from job loss and the failure to find suitable employment opportunities.

The Journal is reporting that nearly 8 million Americans 55-years old or older are falling further and further behind in their ability to prepare for a dignified retirement.  Despite the impression that the U.S. economy is humming along with an unemployment rate of 3.7%, there are many older Americans who have not been able to get back on their feet following the Great Financial Crisis, which ended more than 10 years ago.

Roughly 5.8 million Americans over 55 are in full-time jobs that do not provide healthcare benefits. That additional financial burden was once covered in large part by Corporate America. Incredibly, the 5.8 million represents nearly 25% of the entire full-time workforce of those 55-years-old and older. Furthermore, there are more than 750,000 stuck in part-time positions for economic reasons and another 1.3 million workers who are currently unemployed or too discouraged to continue to seek employment opportunities.

Obviously, these statistics are masked by the standard unemployment calculations. Not surprisingly, it is taking older workers more than three months longer to find employment than younger workers.  Worse, wages received by older workers in new positions are 27% less while those under 30-years-old see wages grow by 7% on average when finding new employment opportunities.

Any period of unemployment can take its toll on one’s retirement savings or plans, as meager 401(k) balances are often used as an unemployment bridge to fund one’s mortgage, healthcare, and other essential living expenses. Furthermore, the demise of traditional DB plans are just compounding the issue.  According to the Center for Retirement Research at Boston College, 33% of 55- to 64-year olds were covered by a DB plan in 1992.  Today, only about 17% of this cohort are in DB plans.  I don’t know the status of those plans, but it wouldn’t shock me to find out that many of those have been frozen to new accruals.

The last thing that these 55 and older Americans want is to be a burden of any kind, but especially to their children. This is one of the primary reasons that we continue to believe that having access to a traditional DB plan is an essential part of the contract between the employee and employer. Companies once used these plans as a management tool to handle that natural aging of their labor force. Today, most American workers are on their own, and I don’t think that strategy is working.