Older Workers in the Workforce

Last Updated: 04/02/2024

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Overview

The term, older workers, generally refers to individuals aged 50 and above who still actively participate in the workforce. They may include individuals who are approaching retirement age, retirees who have chosen to re-enter the workforce, or those who have continued to work past the traditional retirement age for various reasons.

From 1970 until the end of the 20th century, older workers who the U.S. Bureau of Labor Statistics defines as those ages 55 and older, made up the smallest segment of the labor force. According to the Pew Research Center, 19% of Americans 65+ were employed in 2023. This is nearly double the percentage working 35 years ago.

Dynamic shifts in the nation’s economy, shifting perceptions of retirement, increased workplace flexibility, aging of the "baby boom" generation, and aging of an increasing number of Americans beyond 100 years of age are contributing to people working longer. With the number of Americans ages 100+ projected to more than quadruple over the next three decades (U.S. Census Bureau), many Americans are expected to extend the length of their employment in the workforce. According to the World Employment and Social Outlook–Trends 2015, senior economist Ekkehard Ernst suggests that by 2030, the number of older workers in the labor force will likely increase to more than 18% of the total labor force. The Center for Workforce Inclusion projects that by 2028, workers aged 55 or older will represent more than 25% of the U.S. labor force, yet only 4% of firms have committed to programs that help integrate older workers into their talent pool.

While older workers increase in number, their earning power has also grown. In 2022, the typical worker 65+ earned $22 per hour, up from $13 in 1987. By comparison, earnings for younger workers has not grown as much. As a result, the wage gap between older workers and those ages 25 to 64 has narrowed significantly.

In 2023, older workers accounted for 7% of all wages/salaries paid by U.S. employers—more than triple the share in 1987 (2%). Older workers also differ from older workers of the past in many ways:

  • They work more hours, on average, than in previous decades (62% of older workers are working full time today compared with 47% in 1987).
  • They’re more likely to have a four-year college degree than in the past (about 44% of older workers now have a bachelor’s degree or higher compared with 18% in 1987).
  • They’re more likely to receive employer-provided benefits such as pension plans and health insurance but this is not the situation for younger workers whose access to such employer-provided benefits has decreased in recent decades.
  • Older workers are more than twice as likely as younger to be self-employed (23% are, compared with 10% of workers ages 25 to 64).
  • Workers 65+ are more satisfied with their jobs overall than younger workers. They’re more likely to say they find their job enjoyable and fulfilling all or most of the time, and less likely to say they find it stressful.

Relationship to Ecosystem

In the rapidly changing learn-and-work ecosystem, postsecondary education is increasingly important for older job seekers' reemployment. They often face challenges in accessing and completing education and training, sometimes due to their greater likelihood of having acquired age-related disabilities. Older workers seeking postsecondary education typically participate in short-term training programs (noncredit and credit), often provided by community and technical colleges and third-party providers including employers.

Alternative Terminology

  • 50+
  • 55+
  • experienced workers
  • returning workers (have retired and later return to the workforce)
  • older jobseekers

Examples of Programs Focused on Older Workers

Federal 

State 

  • Many states offer workforce development programs specifically tailored for older adults, providing training, job search assistance, and placement services.
  • State-run employment services often have special programs and resources for older workers, including job fairs and training workshops.

College and University 

  • Universities often offer continuing education programs (Lifelong Learning Programs) geared towards older adults who want to update their skills or pursue new interests.
  • College career centers may provide specialized counseling and career resources for older adults looking to re-enter or transition within the workforce.

Community 

  • Community organizations may establish senior job banks or job placement services specifically for older adults.
  • Retired Senior Volunteer Program (RSVP) offers volunteer opportunities for older adults to stay active and engaged in their communities while utilizing their skills and experiences.
  • Goodwill®  participates in the Senior Community Service Employment Program. Federal funds provide 90% percent of the funding and Goodwill's outreach centers provide the remaining 10% through in-kind contributions. The program focuses on individuals in the following categories: 55 years of age or older, unemployed, earning a low or no income, wishing to work in their local community, wanting to be paid to learn new skills through on-the-job training.

Philanthropic 

  • AARP Foundation focuses on economic opportunity for vulnerable older adults, including job training and placement programs.  AARP’s Work channel provides information and education to help people age 50-plus find a job, tweak résumés, polish interviewing skills, negotiate a salary and benefits, explore a second career path, explore flexible work arrangements, consider self-employment, etc. It also features the SimplyHired job search tool, which enables searching by job title or company as well as location. AARP Foundation's Back to Work 50+ program helps older workers find better jobs by assisting with job training, career counseling and networking.
  • The Atlantic Philanthropies supports various initiatives aimed at improving the lives of older adults, including workforce development programs.
  • The Robert Wood Johnson Foundation, while primarily focused on health, this foundation also funds programs that address social determinants of health, such as employment and economic stability for older adults.
  • The Ford Foundation supports initiatives related to economic justice and opportunity, which may include programs for older workers.
  • The Sloan Foundation supports research and programs related to aging and work, including efforts to promote longer and more productive careers.

Return on Investment 

Overall, research indicates that retaining older workers may be beneficial for individuals, organizations, and the economy as a whole. Policies and practices that promote age diversity and support older workers in the workforce can yield positive returns on investment in terms of experience and expertise, productivity, cost savings, diversity and inclusion, customer satisfaction, reduced skills shortages, and positive organizational culture.

  • Experience and Expertise Retention: Older workers often possess valuable institutional knowledge, skills, and experience that can be difficult to replace. By retaining them in the workforce, organizations can maintain continuity, avoid knowledge loss, and benefit from their expertise.
  • Increased Productivity: Studies have shown that older workers tend to be productive. They bring a strong work ethic, reliability, and dedication to their jobs, which can positively impact organizational performance and efficiency.
  • Cost Savings: Retaining older workers can result in cost savings for organizations. Recruiting and training new employees can be expensive, and retaining experienced workers reduces turnover costs. Additionally, older workers may require fewer training resources than younger counterparts due to their extensive experience.
  • Enhanced Diversity and Inclusion: Maintaining a diverse workforce, including employees of different ages, contributes to innovation, creativity, and problem-solving. Older workers bring unique perspectives and insights that can complement those of younger colleagues, leading to better decision-making and outcomes.
  • Customer Satisfaction: Older workers often excel in customer-facing roles due to their interpersonal skills, patience, and empathy. Their ability to relate to customers of all ages can result in higher levels of customer satisfaction and loyalty.
  • Reduced Skills Shortages: In many industries, there is a growing demand for skilled workers due to demographic shifts and technological advancements. Retaining older workers can help to mitigate skills shortages by ensuring a steady supply of experienced talent.
  • Positive Organizational Culture: Organizations that value and support older workers demonstrate a commitment to age diversity and inclusivity. This can enhance employee morale, loyalty, and engagement, leading to a more positive organizational culture.

Policy / Regulation

Age restrictions in the workforce vary by country and jurisdiction. Their legality depends on the specific laws and regulations in place. Imposing age restrictions on employment is generally discouraged and may be considered discriminatory in many contexts.

In the U.S., age discrimination in employment is prohibited by the Age Discrimination in Employment Act (ADEA) of 1967. This law prohibits discrimination against individuals 40 years of age or older in hiring, promotion, discharge, compensation, or terms, conditions, or privileges of employment. There are limited exceptions to this law, such as when age is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of a particular business. In some industries, such as aviation and public safety, there may be age restrictions for certain positions based on safety concerns or specific-job requirements. However, these restrictions are typically justified and must adhere to legal standards.

The number of industry sectors that impose age restrictions for their workforce vary, but it's generally uncommon to see widespread age restrictions across industries. Generally, employers are encouraged to focus on qualifications, skills, and abilities rather than age when making employment decisions to ensure fairness and compliance with anti-discrimination laws.

References

AARP Foundation's Back to Work 50+

AARP’s Workforce50 (formerly called Senior Job Bank) - http://www.workforce50.com/

AARP’s The Work channel- https://www.aarp.org/work/

Age Discrimination in Employment Act of 1975

Fry, R., and Braga, D. (December 2023). Older Workers Are Growing in Number and Earning Higher Wages. Pew Research Center. https://www.pewresearch.org/social-trends/2023/12/14/older-workers-are-growing-in-number-and-earning-higher-wages/

https://www.dol.gov/agencies/eta/Seniors/

Older Workers: An exploration of the Benefits, Barriers, and Adaptations for Older People in the Workforce. 2009. A study from the National Institutes of Health (Australia).

Older Workers | U.S. Department of Labor (dol.gov)

Pew Research Center. (October 2016).  The State of American Jobs. https://www.pewresearch.org/topic/generations-age/age/older-adults-aging/

Pew Research Center. (January 2024). U.S. centenarians projected to quadruple in number by 2054 | Pew Research Center. https://www.pewresearch.org/short-reads/2024/01/09/us-centenarian-population-is-projected-to-quadruple-over-the-next-30-years/sr_24-01-09_centenarians_1/

The U.S. Department of Labor Employment and Training Administration’s-funded Senior Community Service Employment Program (SCSEP).

U.S. Department of Labor (DOL) Employment & Training Administration's Older Worker Initiative

World Employment and Social Outlook - Trends 2015. International Labour Organization. https://www.ilo.org/global/research/global-reports/weso/2015/lang--en/index.htm

 

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