Where did all the workers go? Answer #3 in the series: People retired in droves. Way more than anyone expected. (Here’s the post with Answers #1 & #2.)
According to the Federal Reserve Bank of St. Louis, retired persons made up 15.5% of the US population in 2008, at the beginning of the Global Financial Crisis. By February of 2020 (ah, the good old days…), it was 18.3%, a pretty slow but steady rise of less than a quarter of a percent each year, and driven by the totally predictable increase in Baby Boomers reaching retirement age.
Then, by August of 2021, BAM! It grew to 19.3%, a full point in 18 months. The calculator on my phone tells me that’s nearly a threefold jump in the average annual rate of retirement from the previous 12 years.
Here’s what seems to have happened. During and after the ’08 recession, lots of older workers couldn’t afford to retire when they’d hoped. The average age of the workforce inched up. But retirement delayed is not retirement avoided. Eventually, they were going to have to retire.
Meanwhile, those older workers who’d delayed their retirement found that by 2019 or so, their 401(K)’s were looking really good, and retirement started to feel a bit more doable. Then the housing market caught fire, just when many were ready to downsize their living space, and it approached no-brainer territory, flush with cash and passive income. Enter a real health threat associated with working around other people, and what had been a consideration became a decision.
More than half the people who voluntarily withdrew themselves from the labor force between March of 2020 and July of 2021 did so through retirement.
No wonder, then, right?
But this reason has a little more light at the end of its tunnel than most of the others I’ve discovered. Maybe retirement’s not all it’s cracked up to be. I wouldn’t know. I’ve never tried it. But the US Department of Labor says that about 1.5 million people have “un-retired” in the last year. And it looks like that trend will continue, to a point.
But, and this is a big but, retirees are coming back to work on their own terms, to include more flexibility, especially in when – and where – they perform their work. Try telling a retirement age knowledge worker that they have to work in your office 40 hours a week, and they’ll move on to the next prospective employer on their list. Organizations ready to meet the flexibility wishes of retirement age workers are poised to take the best advantage of this valuable portion of the workforce.
Watch for the rest of the answers to the question, “Where did all the workers go?” over the next few weeks.
Where Did All the Workers Go: The Series:
