COVERITLIVE.COM

11:11

Jay Hancock - Hi Everybody: Thanks for joining us. We'll be starting at 11:30, talking about this column about how older workers returning to the labor markets are blocking the way for folks just getting out of school: http://bit.ly/zDTyU

11:29

Jay Hancock -

Thanks for joining us, everybody. Let's get started with a question from Jerry.

11:30

[Comment From Jerry ]
If this trend keeps up, what are the possible consequences? How will the lack of younger people entering the workforce hurt/help the economy?

11:35

Jay Hancock - In the short-term it's very challenging for people just getting out of school. As the column noted, the unemployment rate for people 16 to 24 is close to 18 percent. That's nearly the highest level since they started keeping track of such things decades ago. It means younger people will be starting their careers later than they did formerly. Many will go back to school. That's largely a good thing -- a more educated work force is a more productive work force. Many will move back in with their parents. On macro level having a higher percentage of the population working is also a good thing; this may be the upshot if older folks prolong their careers. One of the looming fiscal problems is that there aren't enough young people to support all the old people on the landing path for retirement. So more post-65 careers could help Medicaid and Social Security -- both by decreasing their costs and boosting the number of taxpayers contributing to them. But obviously the squeeze is hurting younger folks meanwhile.

11:36

[Comment From Ryan C. ]
I was hoping I could find a job faster because of my lack of experience -- which would translate into lower pay. I thought that would be attractive to employers in this economy. What gives?

11:41

Jay Hancock - Hi Ryan: That's the way things are supposed to work! Younger, less experienced workers are generally less expensive for companies. They also tend to be less productive. (No offense -- that's just what comes with inexperience. Younger workers need to learn the ropes first.) Unfortunately, employers are finding that with many older workers they can get the best of (for them) both worlds: experience AND lower pay. As Dave Rosenberg pointed out in my piece, mature workers are often willing to take a pay cut. In, fact, they usually don't have a choice. Their 401ks are down, their pensions are less than expected, and they do what they have to do. And those pension assets -- even though they're less than expected -- help subsidize the lower pay they're getting form their current jobs. So that's the bad news: In this market lack of experience is less of a comparative "asset" than it might have been before. The good news is that the economy is recovering, and the job outlook should improve. And with the stock market recovery, retirees' savings look a lot better than they did 6 months ago.

11:42

[Comment From Jane ]
We are in a so-called jobless recovery ... so how long does this trend of older workers dominating the hiring last?

11:48

Jay Hancock - Hi Jane. It'll depend on the recovery. If we see a blockbuster recovery -- if unemployment is below 7 percent a year from now and the Dow Jones is back up to 11,000 -- the old/young hiring dichotomy should become less pronounced. Recovering stocks mean it'll be easier to retire for folks who are on the margins. But few expect a robust recovery. As you note, it's not expected to do much in the way of producing jobs. I suspect the job market will be challenging for everybody for a while. Which brings me to a point I wanted to make: I don't want to give the impression that it's great out there for older workers, by any means. It's tough for them, too. Older workers with long tenure at one employer are often the first to be laid off in a downsizing. The unemployment rate for those 55 and over has shot up, too, although it's still less than half the rate reported for young workers.

11:48

[Comment From RA ]
Some day, older government workers are supposed to leave in droves for retirement. It still hasn't happened. If you are a younger worker, is there a better sector to be in than another?

11:53

Jay Hancock - Some day, those older workers in government will have to leave the work force. It just looks like it'll be delayed for a while. The hottest employment sectors these days are health care, education and defense. Maryland is exposed to all those those sectors, which is why the Maryland economy is doing better than most states'. The nursing schools are getting lots of interest. But don't get the impression that even these industries are booming. They're just suffering less than, say, manufacturing, real estate or finance.

Page 1 Next >