Answer: the labor force participation rate of retirement-age workers is 20%
Over the past fifty years, the idea of a “traditional American family” has been slowly disappearing, specifically as it relates to those families with only one income. More parents need to work simply because the cost of living has risen, and economic disasters like the Great Recession in 2008 erased savings. Even before 2008, in the early 2000s, “only 7 percent of all U.S. households consisted of married couples with children in which only the husband worked. Dual-income families with children made up more than two times as many households” according to PRB. Now, as a result of underfunded savings plans, expensive health-care costs, and a larger population of older people, the elderly are working much more as well.
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According to a new report from money manager, United Income, for the first time in 57 years, the participation rate in the labor force of retirement-age workers has cracked the 20 percent mark. This was brought to light by Bloomberg Quint, which also pointed out that “as of February, the ranks of people age 65 or older who are working or seeking paid work doubled from a low of 10 percent back in early 1985. The biggest spike in employment has gone to college-educated older workers; the share of all employees age 65 or older with at least an undergraduate degree is now 53 percent, up from 25 percent in 1985.” What’s more, is that as the share of America’s population ages, this trend is likely to continue.
The Bureau of Labor Statistics (BLS) notes that by 2024, baby boomers will have reached ages 60 to 78. And some of them are expected to continue working even after they qualify for Social Security benefits. The increase in elderly labor force participation makes sense when you run the numbers. According to an economics professor at the New School for Social Research, “social Security replaces about 40 percent to 50 percent of one’s pre-retirement income. The general thinking is that people need around 80 percent of pre-retirement income to get by after they stop working.” While this might seem to threaten the job prospects of younger workers, The Economist points out that the “lump of labor” fallacy has been disproven. “Older workers use their wages to buy goods and services made by other workers. And as Lisa Laun of Sweden’s Institute for Evaluation of Labour Market and Education Policy points out, with more workers, of whatever age, tax revenues and pension contributions rise. That means a larger pie for everyone.”