GAO: 6-Fold Increase in Americans 55 or Older Unemployed 6 Months or Longer

By Edwin Mora | May 17, 2012 | 9:31am EDT

Job seekers stand in line during the Career Expo job fair Wednesday, March 7, 2012, in Portland, Ore. (AP Photo/Rick Bowmer)

( – In the last four years, there was a 6-fold increase in the number of Americans over 55 who had been unemployed for 6 months or longer, a federal auditor told

With this increasing number of older workers experiencing long-term unemployment, concerns are growing about their retirement income.

"For 2007, the number of all older workers age 55 and older who were out of work for 27 weeks or more was 188,552; and then in 2011, it went to 1,126,948," Charles Jeszeck, the director of education, workforce, and income security at the Government Accountability Office (GAO), told

"While it is crucial that the nation help people of all ages return to work, long-term unemployment has particularly serious implications for older workers (age 55 and over)," Jeszeck said. "Job loss for older workers threatens not only their immediate financial security, but also their ability to support themselves during retirement."

The GAO noted that Social Security retirement benefits are reduced if people work fewer years, because those benefits are partly based on a calculation of the worker’s average monthly earnings over 35 years. Moreover, people who are not working are not contributing to 401(k)s or other employer-sponsored retirement accounts.

Long-term unemployment may also force older workers to file at an earlier age for Social Security benefits.

"Many unemployed older workers in our focus groups said that they were planning to claim Social Security retirement benefits as soon as they were eligible or had already done so because they needed a source of income to help pay for living expenses," said Jeszeck. "Moreover, a 2012 study found that high unemployment increases Social Security retirement claims among men with limited education."

The GAO describes long-term unemployment as not having a job for more than 6 months (27 weeks or more).

"Older workers tend to be out of work longer than younger workers, threatening their retirement savings during a period of their lives when they have may have less opportunity to rebuild them," concluded Jeszeck. "Even when they are able to obtain reemployment, they often do so at lower wages, making it even more difficult to replenish the lost earnings and reduced retirement savings that they suffered."

At a May 15 hearing before the Senate Special Committee on Aging, Jeszeck testified about the state of unemployed older since the economic recession began in December 2007 and how their situation has affected their retirement security.

The GAO found that older black and Hispanic workers had “significantly higher” unemployment rates in both 2007 and 2011 compared with older white workers.

Education also matters: Older workers who failed to attain a high school diploma "were more likely to be unemployed before and after the recession" compared with those who graduated from high school, Jeszeck told the panel. However, the unemployment rate for older workers with at least a bachelor's degree -- and for those with less education -- doubled in 2011 from their 2007 levels.

In 2007, the jobless rate for older males was "comparable" to that of females in the same age group. However, by 2011, the unemployment rate for older men was “significantly higher" than that for women, the GAO found.

According to the Bureau of Labor Statistics (BLS), there were 1,929,000 unemployed older workers in April 2012, the latest month for which data is available. That is more than double the 839,000 unemployed older workers at the start of the recession in December 2007.

In 2011, more than one-third (about 36 percent) of the total 2,044,000 older workers who BLS shows were unemployed during that period went without a job for more than one year. But only an estimated 11 percent of older workers were jobless for more than one year in 2007.

"Unemployment rates for workers of all ages have risen dramatically since the start of the recent recession in December 2007, and workers age 55 and over have faced particularly long periods of unemployment," the GAO found. "The seasonally unadjusted unemployment rate for older workers increased from 3.1 percent [839,000 workers] in December 2007 to a high of 7.6 percent [2.3 million workers] in February 2010, before it decreased to 6.0 percent [1.9 million workers] in April 2012."

Focus group participants told the GAO they believe employers are reluctant to hire older workers, and they said that reluctance is the primary challenge in finding work. “Several cited job interview experiences that convinced them that age discrimination was limiting their ability to find a new job," the study added.

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