Working to Death

 

labor force participaion

It’s easy to be dismissive of the mindless cheerleading in the mainstream media as they crow about the ever-decreasing unemployment rate when it is obvious to anyone who has contact with the world outside of the Wall-Street-to-Washington Axis that the U.S. employment situation is not healthy. I’ve pointed out previously that, though U3 unemployment continues its bizarre march down, the labor force participation rate has never improved during this “economic recovery” and remains at multi-decade lows. Upon further reflection, and after witnessing yet another septuagenarian bag my groceries this week, I think I may have been overly simplistic and harsh when discussing the job market before. There are Americans who are finding themselves working more and more these days: the elderly.

I’m lucky in that — in exchange for an ice cream sundae after dinner last week — my four year old daughter agreed to let me stay in her basement when I age. Sucker. Unfortunately, not all Americans have such choices. From 2002 to 2012, as the labor force participation rate for 25 to 54 year olds dropped from 83.3 to 81.4 percent, the labor participation rate for those 65 and older increased from 13.2 to 18.5 percent (2012 was the most recent government labor participation rate data I could find broken out by age; perhaps they are too embarrassed to continue publishing this information as the situation has likely worsened since then). Now, you might be thinking, “Sure, there are more 65 year olds working, but 65 isn’t what it was back when Trog had to club wooly mammoths for a living so these folks are probably just socking away a bit more in that 401K before enjoying a dream retirement.” The problem is the labor participation rate for those over 75 also rose, from 5.1 percent in 2002 to 7.6 percent in 2012 and is forecasted to be 10.5 percent in 2022. Unless that cryogenic freezing works out, I’m not sure when these unfortunate folks are going to enjoy those golden years.

One factor contributing to this shift to more older people working is the Federal Reserve’s interest rate policy of the last decade. As anyone brave enough to venture out of his/her bunker likely heard last week, the Fed punted once again on raising interest rates. On Saturday, my son celebrated his eight birthday with a magician performing for his friends. Since his birth, we’ve had a near trillion dollar economic stimulus passed, the Affordable Care Act, Dodd-Frank, and ten seasons of Keeping Up with the Kardashians, but we have not found any magician capable of raising the Federal Funds Rate by even a quarter point.

Bringing this back to elderly people working, as a consequence of this, in 2007 the three-month Treasury yield paid over 5 percent in interest; as of yesterday, that same bill pays 0.01 percent. If you were able to cobble together $500,00 in retirement savings (several times more than the average) and invested in Three-Month Treasuries you would have been able to tack on $25K a year to your Social Security income in low risk short-term treasury investments in 2007 while, in 2015 you’d get a whopping $500 in interest payments annually on that same investment.

I’m not suggesting quick hikes that would return us to normal interest rates, and collapse the house of cards we have built, but it’s time to recognize that our current policies have some very real negative consequences contrary to the media’s storyline.

There are 31 comments.

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  1. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    You make some very good points, PPF.  My wife’s parents have scrounged their whole lives, getting by as cheaply as possible so that they would have a decent nest egg to retire on.  And they did it.  Their farm is paid for, they’ve got no debt, and they’ve got a substantial amount of money stashed away.  But the interest they are getting on their money is a joke.  Fortunately for them, a lifetime of being habitually cheap is now an unbreakable habit so they can get by on their social security anyway.

    And yet the administration claims that the economy has recovered while the Federal Reserve is afraid to charge interest for fear that the economy will tip over.

    • #1
  2. Pleated Pants Forever Inactive
    Pleated Pants Forever
    @PleatedPantsForever

    RW – yep, these interest rates are a direct payment from savers to banks. Sure, my current mortgage is 4% but what is the bank paying on deposits? .01%? Please save some room on that family farm for Ricochet when this house of cards falls down ;)

    • #2
  3. RushBabe49 Thatcher
    RushBabe49
    @RushBabe49

    Yeah, when 1.05% is considered “high-yield”, you know you’re in trouble.  I wonder how many other “elderly” people are like me (I’m 66) are still working because they WANT to, not because they have to.  I could retire right now, and collect Social Security, and have my younger husband who earns over twice what I do support me.  But I don’t, because I want to remain a productive member of society.  I love my work, I love working, and I have no intention of retiring.  I have to say I like Jeb Bush’s suggestion of stopping the employee’s portion of SS withholding once a worker reaches 67, but I had the idea first!

    • #3
  4. Pleated Pants Forever Inactive
    Pleated Pants Forever
    @PleatedPantsForever

    RB – bless you, and apologies as upon rereading the way I wrote this could make it sound like 65 is somehow “elderly” which was not my intention. My thinking for this is more around the Walmart greeter or cashier who is 70 whatever, making nothing on his/her retirement and feels forced back into the workforce….but would much rather be retired….I am anecdotally seeing this more and more

    • #4
  5. Seawriter Contributor
    Seawriter
    @Seawriter

    Anyone remember the “Rule of 72?” Divide 72 by the interest rate to see the number of years it takes to double in value.

    Back in 1979, when I had an All-Savers account paying 12.5% interest, $100 would double to $200 in 5.76 years. At 1.05% it takes 68 years to do so.

    Forget the miracle of compound interest. You will die of old age before making a pile that way anymore.

    Seawriter

    • #5
  6. Pleated Pants Forever Inactive
    Pleated Pants Forever
    @PleatedPantsForever

    Seawriter – your comment reminds me of last weekend when we had a neighbor over who teaches math. She was talking about teaching HS kids the “power of compound interest.” I was thinking, that is all well and good assuming there is interest

    • #6
  7. Stad Coolidge
    Stad
    @Stad

    Aren’t you missing the 56 – 64 year old folks?  I’m in that group!

    • #7
  8. Pleated Pants Forever Inactive
    Pleated Pants Forever
    @PleatedPantsForever

    Stad – we need you as you are the only ones who don’t qualify for any ponzi scheme payouts but who are maximizing their payments into social security and medicare

    • #8
  9. Sandy Member
    Sandy
    @Sandy

    I recall reading a long time ago in an essay by Conrad that work is our salvation.  It could have been someone else, or maybe I’m imagining that I read it, but the thought is true.  Not our only salvation, of course, but work does save us from the trouble that comes with having nothing good to do.  I am 74 and I’m still doing continuing education in my field as if I have a future, and I’m not the only one.  I intend to continue to work until something better comes along, and so far I haven’t found anything.  I am still in demand and work keeps me from bothering my children.

    There are people who are good at retirement, and there are people who really need to retire.  Maybe the elderly bagger was one of the latter, or maybe he likes being out and about and earning a little, too.

    • #9
  10. Pleated Pants Forever Inactive
    Pleated Pants Forever
    @PleatedPantsForever

    Sandy:I recall reading a long time ago in an essay by Conrad that work is our salvation. It could have been someone else, or maybe I’m imagining that I read it, but the thought is true. Not our only salvation, of course, but work does save us from the trouble that comes with having nothing good to do. I am 74 and I’m still doing continuing education in my field as if I have a future, and I’m not the only one. I intend to continue to work until something better comes along, and so far I haven’t found anything. I am still in demand and work keeps me from bothering my children.

    There are people who are good at retirement, and there are people who really need to retire. Maybe the elderly bagger was one of the latter, or maybe he likes being out and about and earning a little, too.

    Please keep contributing your talents as long as you enjoy it. . . .these days we need as much talent as we can get. Though, being on Ricochet, I think we are a bit of a skewed group. Perhaps there has been some odd awakening where those of traditional retirement age are increasingly choosing to forego retirement in favor of jobs in the retail industry or, perhaps, it is a sign of our weaker than advertised economy. I’m sure there are people in both camps, but I’ll wager there are more and more in the second one than CNBC will admit

    • #10
  11. Sandy Member
    Sandy
    @Sandy

    Pleated Pants Forever:

    Sandy:I recall reading a long time ago in an essay by Conrad that work is our salvation. …

    Please keep contributing your talents as long as you enjoy it. . . .these days we need as much talent as we can get. Though, being on Ricochet, I think we are a bit of a skewed group. Perhaps there has been some odd awakening where those of traditional retirement age are increasingly choosing to forego retirement in favor of jobs in the retail industry or, perhaps, it is a sign of our weaker than advertised economy. I’m sure there are people in both camps, but I’ll wager there are more and more in the second one than CNBC will admit

    Oh, I think you are right.  However, I think of a client long retired from an executive position with a big corporation,  who, as long as he was able, worked at The Container Store not because he needed money but because he loved it.  Everyone needs a reason to get up in the morning.

    • #11
  12. Petty Boozswha Inactive
    Petty Boozswha
    @PettyBoozswha

    I’m sure a big factor is the change in family structure – grandparents are now expected to raise three generations since their daughters never got married.

    • #12
  13. Spin Coolidge
    Spin
    @Spin

    RushBabe49: I wonder how many other “elderly” people are like me (I’m 66) are still working because they WANT to, not because they have to.  I could retire right now, and collect Social Security, and have my younger husband who earns over twice what I do support me.  But I don’t, because I want to remain a productive member of society.

    I was gonna point out that I wouldn’t consider 65-75 necessarily elderly.  My mom is 71 and she still runs her business.

    Seeing the number of older folks increasingly in the work force doesn’t bother me.  It is the other end of the stick we need to be worried about.

    • #13
  14. Man With the Axe Inactive
    Man With the Axe
    @ManWiththeAxe

    Sandy: Everyone needs a reason to get up in the morning.

    Mine is because I have to go to the bathroom.

    • #14
  15. Kozak Member
    Kozak
    @Kozak

    Pleated Pants Forever: I’m not suggesting quick hikes that would return us to normal interest rates, and collapse the house of cards we have built, but it’s time to recognize that our current policies have some very real negative consequences contrary to the media’s storyline.

    They don’t care. Their buddies on Wall Street are swimming in free money.  That’s all that matters.

    • #15
  16. livingthehighlife Inactive
    livingthehighlife
    @livingthehighlife

    RushBabe49: I wonder how many other “elderly” people are like me (I’m 66) are still working because they WANT to, not because they have to.

    My parents have always been responsible savers, and my Dad retired comfortably at 63.  Then he got bored, so he’s back working as a contractor for his old employer.

    I met another guy a couple weeks ago who’s in a similar situation.  Retired, then realized he liked working and is now looking for a job.

    Do 60+ year olds have more energy than their parents did at that age?  I hate the phrase, but 60 the new 50?

    • #16
  17. Seawriter Contributor
    Seawriter
    @Seawriter

    livingthehighlife

    Do 60+ year olds have more energy than their parents did at that age?

    I don’t know, but based on my family history I am not sure if energy is the relevant factor.

    My paternal grandfather was pressured into retiring in his late 50s because he was told he had a heart condition which would kill him within a year. After 18 months of enforced leisure, and with no worsening in his health, he went back to work (as a chef). Until he died (in his late 80s and not from heart disease) he would work until pressured to take it easy, retire for three months to a year, and return to work for a few more years. He finally stopped working at 85.

    My father, an architect, kept working once past 70. The only difference was he took jobs he wanted, because getting top dollar was not the point.  Creative work was.  He finally stopped working at 89, mainly because he no longer wished to deal with this new-fangled CAD stuff.

    I am 60 and want to keep working (as a technical writer) until I cannot find work anymore. It is fun, remunerative, and satisfies my need to create. When I finally retire, I plan to write books until I am too infirm and senile to continue writing.

    My brothers plan similar retirement paths – working retirements.

    Rest?  There is time enough for rest when I am dead.

    Seawriter

    • #17
  18. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    livingthehighlife: My parents have always been responsible savers, and my Dad retired comfortably at 63.  Then he got bored, so he’s back working as a contractor for his old employer. I met another guy a couple weeks ago who’s in a similar situation.  Retired, then realized he liked working and is now looking for a job. Do 60+ year olds have more energy than their parents did at that age?  I hate the phrase, but 60 the new 50?

    My father was born in 1920 and occasionally still goes into his office, but in the last year I imagine that his “working” has become more of a chance to change his environment and see some younger faces.  After all, he is 95. I think he continued to make valuable contributions well into his 90s. He left one job at the age of 72 and was officially retired for a weekend before he and two friends, one much younger, started a business where he still officially works.

    At any rate, being that age, he is able to remember the days before social security was enacted. From his point of view, retirement was always something that a prosperous few who had saved well would be lucky enough to achieve, not a right that everyone was entitled to.  I think he would object to the premise of this post, which is that something is wrong when older people have to work.

    Work is good for the human soul, and being told that at 65 you should stop working, like canned goods whose shelf life has expired, is hard on the psyche. Being told that your contributions are not valued any more is not good for you.  Neither is inactivity. Or, as another older friend of mine says, “I’m not going to retire. Retiring kills you.”

    • #18
  19. Man With the Axe Inactive
    Man With the Axe
    @ManWiththeAxe

    My off-the-cuff opinion is that the typical (but by no means every) 65 year old from a generation ago had worked much harder, either physically or mentally or both, during his career than today’s 65 year old, and was ready to retire at 65, really ready. They had not been working at computers all day checking sports scores and keeping up with facebook, or shopping for shoes (for you women).

    • #19
  20. Merina Smith Inactive
    Merina Smith
    @MerinaSmith

    I’d like to point out that the numbers for the youngest set are rather bad.  Of course, many are students, but at 24 most should have jobs.  My son just graduated from a good university with a degree in biochem and can’t even seem to get an interview in a biotech area.  It’s very discouraging.  My sense is that it’s very hard to enter the world of work these days.  Many entry-level jobs are done by interns who work for nothing or next to, and then you also need to know someone in the field.

    • #20
  21. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    Merina Smith:I’d like to point out that the numbers for the youngest set are rather bad. Of course, many are students, but at 24 most should have jobs. My son just graduated from a good university with a degree in biochem and can’t even seem to get an interview in a biotech area. It’s very discouraging. My sense is that it’s very hard to enter the world of work these days. Many entry-level jobs are done by interns who work for nothing or next to, and then you also need to know someone in the field.

    I think the original post did not mention that because it kind of goes without saying at least here on Ricochet. We all know that the Obama economy has been devastating for young people. I only wish most of them understood that the responsibility for this lies with Obama and the Democrats.

    • #21
  22. The King Prawn Inactive
    The King Prawn
    @TheKingPrawn

    I just climbed about 80 feet straight up a wall to inspect a crane before using it. I’m only 43, but I can hardly imagine doing this ten years from now and even less so in 30. What you do probably matters a great deal in whether or not you want to or even can keep working later in life.

    Edit: Two typos. That climb is harder on Mondays, especially on the first day back on day shift.

    • #22
  23. Bob Thompson Member
    Bob Thompson
    @BobThompson

    Lucy Pevensie:

    Merina Smith:I’d like to point out that the numbers for the youngest set are rather bad. Of course, many are students, but at 24 most should have jobs. My son just graduated from a good university with a degree in biochem and can’t even seem to get an interview in a biotech area. It’s very discouraging. My sense is that it’s very hard to enter the world of work these days. Many entry-level jobs are done by interns who work for nothing or next to, and then you also need to know someone in the field.

    I think the original post did not mention that because it kind of goes without saying at least here on Ricochet. We all know that the Obama economy has been devastating for young people. I only wish most of them understood that the responsibility for this lies with Obama and the Democrats.

    This is the economic situation that fosters the progressives’ objective to destroy traditional family values and relationships and make the state responsible for all. I’m suspecting that many of our young people don’t see this and find much of the language enticing. Example, all the hoopla around the Pope’s visit so he can deliver the message.

    • #23
  24. cirby Inactive
    cirby
    @cirby

    I’m 56, and do trade shows and corporate meetings for a living. Moderately high-tech stuff (live HD production, for example, or large-screen projection).

    Part of the deal is that you load and unload trucks as part of the gig, or walk around a convention center (18 to 20 mile days are not unheard of), or both. Even when I don’t have to take part in the load-ins, I usually have to do fun stuff like help haul 150 pound projectors up on top of scaffolding or hang them from truss.

    And yes, I’m getting a little creaky for that sort of thing… but it’s a helluva job. Even when I get past the point where I can do the physical side of the gig, I’ll keep doing SOMETHING as long as I can.

    • #24
  25. Petty Boozswha Inactive
    Petty Boozswha
    @PettyBoozswha

    One thing I think the left is correct about is the pernicious effect of “internships” that seem to have swept the workworld in the last decade or so – they really are nothing but turbocharged affirmative action programs for the affluent and connected. Merina’s son would have a lot easier time if she were a bigwig in the industry already.

    • #25
  26. Man With the Axe Inactive
    Man With the Axe
    @ManWiththeAxe

    Petty Boozswha:One thing I think the left is correct about is the pernicious effect of “internships” that seem to have swept the workworld in the last decade or so – they really are nothing but turbocharged affirmative action programs for the affluent and connected. Merina’s son would have a lot easier time if she were a bigwig in the industry already.

    I have no data or even anecdotal evidence to back this up, but I wonder if the growth of internships isn’t a way around affirmative action?

    I’m guessing that the anti-discrimination rules don’t apply to unpaid interns. Then, once the intern has proved his mettle, hiring him without a public search makes sense and can avoid the scrutiny of the diversity police.

    Does anyone know if there is a grain of truth in that notion?

    • #26
  27. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    I was going to guess that unpaid internships were a workaround for the minimum wage. And a workaround for all the employment law that makes it hard to fire someone. Oh yeah, and the Obamacare mandates.

    Lots of good Democratic laws go into making it better not to hire someone officially until he has proven himself for a while in an unpaid capacity.

    • #27
  28. Fricosis Guy Listener
    Fricosis Guy
    @FricosisGuy

    Man With the Axe:

    Petty Boozswha:One thing I think the left is correct about is the pernicious effect of “internships” that seem to have swept the workworld in the last decade or so – they really are nothing but turbocharged affirmative action programs for the affluent and connected. Merina’s son would have a lot easier time if she were a bigwig in the industry already.

    I have no data or even anecdotal evidence to back this up, but I wonder if the growth of internships isn’t a way around affirmative action?

    I’m guessing that the anti-discrimination rules don’t apply to unpaid interns. Then, once the intern has proved his mettle, hiring him without a public search makes sense and can avoid the scrutiny of the diversity police.

    Does anyone know if there is a grain of truth in that notion?

    Kinda. I ran the university relations program for my department at a S&P 500 company. One of the reasons you’re placing at these institutions is to get a better yield of qualified candidates…and the internship experience is a valid reason to prefer such candidates for openings.

    However, they were paid internships. I’d never sign on to starting an unpaid internship program: you’d get what you pay for.

    • #28
  29. Seawriter Contributor
    Seawriter
    @Seawriter

    Unpaid internships are a kind of social signaling. A student who takes an unpaid internship sends the message he (or she) can afford to work without receiving pay.  If so, they come from The Right Sort of People, those in the upper class or upper middle class more often than not.

    Yes, sometime the intern is a working-class shlub, desperate to get their foot in the door, but a semester working with the individual reveals that. If they strike you as the sort who will swear the oath of omerta to you, you can consider keeping him (or her). Otherwise, just send them out the door with a smile and handshake at the end of the semester (or summer), and only hire The Right Sort of People for the entry-level paid positions, especially those whose parents can help you down the road or to whom you owe a favor.

    Seawriter

    • #29
  30. Dean Murphy Member
    Dean Murphy
    @DeanMurphy

    We use paid interns at my company, and we haven’t hired a non-intern in several years.

    • #30

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