Source: Bureau of Labor Statistics
This morning, the Bureau of Labor Statistics released data on unemployment for the month of September and Q3 of 2010. BLS provides unemployment figures broken out by a whole slew of characteristics every month and quarter using their “Current Population Survey,” a monthly survey of households around the country. To be clear, being technically unemployed is only a subset of those out of work. To qualify as “unemployed” one has to not have a job, have been available for work, and have actively looked for work in the last four weeks. This does not include those who have only looked in the last year (“marginally attached to the labor force”) and those who have stopped looking because there are no jobs (“discouraged,” which is a subset of “marginally attached”).
We decided to look at different age groups and how their unemployment rate has moved since 1978, a time period that includes several recessions, most dramatically between mid-1981 through late-1982 and late-2007 through mid-2009. Right off the bat, it was striking to notice that, generally the older that worker was, the lower the unemployment rate was. In fact, even when unemployment was at its lowest point in the last 32 years for 16-to-24 year-olds (9.1 percent in Q4 of 2000), that was significantly higher than the highest rate that workers 55 and older have ever reached (7.1 percent in Q4 of 2009).
“Younger workers move around more” said Heidi Shierholz, an economist with the Economic Policy Institute (EPI). “The fact that there’s more churning amongst people means that the unemployment rate is just higher.”
Shierholz also pointed out that workers tend to be more sheltered the more seniority and the more experience they have and younger inexperienced workers may be laid off first in a down economic environment. However, Shierholz added that, “when older workers do get laid off, they get stuck in unemployment longer.”
The other quirk that stuck out was that, although workers 55 and older still have a relatively low unemployment rate compared to other age groups, the most recent recession has hit them disproportionately hard compared to other recessions. When the unemployment rate reached 7.1 percent in Q4 of 2009 that was the highest it had ever been, including the recessionary peak in 1983 (5.6 percent in Q2). In fact, that’s a nearly 27 percent jump in the unemployment rate between recessions that hit younger age groups about the same as the most recent one.