Recession's continuing victim, the older worker


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Recession's continuing victim, the older worker
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Rosenblum, Marc
United States -- Congress. -- Senate. -- Special Committee on Aging
U.S. Govt. Print. Off. ( Washington )
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2d Session I










JULY 1976

Printed for the use of the Special Committee on Aging

73-236 0 WASHINGTON : 1976

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r) 4


FRANK CHURCH, Idaho, Chairman

EDWARD M. KENNEDY, Massachusetts
JOHN V. TUNNEY, California
JOHN A. DURKIN, New Hampshire

EDWARD W. BROOKE, Massachusetts
J. GLENN BEALL, JR., Maryland
BILL B ROCK, Tennessee

WILLIAM E. ORIOL, Staff Director
DAVID A. AFFELDT, Chief Counsel
VAL J. HALAMANDARIS, Associate Counsel
JOHN GUY MILLER, Minority Staff Director

Prepared by Marc Rosenblum, Ph. D., Consultant



Our Nation is now recovering from possibly the worst recession in
nearly 40 years. But the economic upturn has produced few concrete
improvements for middle-aged and older workers. In some key em-
ployment areas, their situation has deteriorated markedly.
To obtain in-depth information about the impact of the recession
on mature workers, the committee has called upon Dr. 'arc Rosen-
blum, a labor economist, to prepare this working paper. He has
responded with a powerful document which provides a fresh new
perspective about the problems confronting middle-aged and older
workers. It clearly merits the close and serious attention of the
Congress and the executive branch.
Dr. Rosenblum's well-documented findings provide clear and con-
vincing evidence that our Nation has failed to develop a compre-
hensive policy to provide adequate job opportunities for middle-aged
and older workers. This deficiency should be cause for serious concern
among policymakers. No nation can achieve its full potential if large
numbers of its most experienced and productive citizens are banished
to the sidelines.
Under almost any employment barometer one uses, older workers
have not benefited appreciably during the economic recovery. Quite
to the contrary, unemployment has actually increased among persons
aged 55 or older since the United States bottomed out of the trough
of the recession during the first quarter in 1975. In sharp contrast,
joblessness for persons under 55 decreased by 400,000 from the first
quarter in 1975 to the first quarter in 1976.
Labor force participation for persons 55 or older has declined by
over 400,000 from the fourth quarter in 1973 to the first quarter in
1976. But even more disturbing, Dr. Rosenblum has determined that
nearly one out of three of these individuals has withdrawrn involuntarily.
Unemployment has taken its tragic toll in many ways during the
recession, especially for older workers. One major cause for concern is
Dr. Rosenblum's finding that the proportion of older persons below
the poverty line has risen. Dr. Rosenblum points out:
For those 55 years of age and above, but particularly those
beyond age 65, the absolute lack of a share in the economic
recovery has led, especially during the past year since the
trough, to an increased percentage in poverty.
This fact of life provides a grim reminder that older persons are an
especially vulnerable group during a recession. It also underscores the
need to develop comprehensive and effective manpower policies to
promote employment opportunities for middle-aged and older workers.
At the same time, our Nation must be vigilant in removing arbitrary
barriers blocking occupational advancement for mature workers.


Dr. Rosenblum's recommendations provide a solid foundation upon
which to build these policies. They deserve prompt consideration by
the Congress and the administration.
In many ways, Dr. Rosenblum's paper develops themes expressed
by the Senate Committee on Aging in its annual reports and specialized
publications within recent years.* Committee Counsel David Affeldt,
who has been instrumental in developing statistical and other evidence
on older worker issues for this committee, was also of great assistance
to Dr. Rosenblum in the planning and preparation of this report.
Once again, the committee expresses its deep sense of appreciation
to Dr. Rosenblum for preparing this timely and effective report.
Special Committee on Aging.
Subcommittee on Employment and Retire-
ment Incomes.
Subcommittee on Housing for the Elderly,
and Committee on Labor and Public
*"Employment Aspects of the Economic Aspects of Aging," December 1969; "The
Nation's Stake in the Employment of Middle-Aged and Older Persons," July 1971; "Can-
celled Careers: The Impact of Reduction-in-Force Policies on Middle-Aged Federal Em-
ployees," May 1972; and "Improving the Age Discrimination Law," September 1973.


Not all Americans are benefiting from the modest emnplovment
upswing from the end of the worst recession in nearly 40 years.
In fact, this paper argues that older workers-those agedI 55 and
above under Department of Labor standards-are probably noW
worse off than they were at the height of the recession.
Their problem cannot be measured by unemployinen t statistics
For example, the "discouragement" factor, or sense of hopelessiiess
which causes a person to stop even the search for work, must be
So must the consequences of long-term poverty which engulfs so
many mature workers, as well as quirks in the way labor force partic(i-
pation and employment statistics are taken and interpreted in the
United States.
In short, the severe recession of 1974-75 has intensified negative
job market trends of direct consequence to the mature worker.
Even in better economic times, those trends were severe enough
to warrant national attention and action.
Now, in the face of the devastating impact which the recession
has had on this age group, action must be taken promptly if older
workers are not to be forced into permanent economic (lislocation
during their work years and severely reduced benefits during their
retirement years.

Digitized by the Internet Archive
in 2013

C 0 N T E N'T S

Sum m ary of m ajor findings ----------------------------------------
I. In tro d u c tio n - - - - - - - - - - - - - - - - - - - - - ....
II. Measures of disadvantage-------------------------------.-
A. U nem ploym ent ...................-.........--- - -
B L'abor force participation ...-...........................
C. l)iscouraged workers and others not in the labor force -..
1. discouraged workers: Numbers and rates of chag(
2. Others not in the labor force who want jobs -----
1). Employment.---------------------------------
E. Poverty_- -
Ameliorating poverty for the older worker ----------
III. The total impact: "Musical chairs" for jobs--------------------



- 6
_ 9
- 1 8

Prepared by Marc Rosenblum, Ph. D., Consultant
Approximately a year has elapsed since the 1974-75 recession
sank the American economy to its lowest level in almost 40 years.
To some extent, improvement is now evident.'
Aggregate unemployment fell to 7.3 percent of the civilian labor
force in May, while nonfarm employment grew by 386,000 from the
preceding month. For the Nation as a whole, these gains are encourag-
ing, although still far short of full recovery.
Not all Americans have benefited from the economic upswing,
however. Older workers have made little or no progress during the
recovery. Virtually all employment growth has been concentrated
among persons below age 45 of both sexes, with the remainder (about
8 percent of new jobs) among females above that age.
The number of employed persons does not provide a complete picture
of the labor market, however. Several other indicators, individually and
in combination, all point to the diminishing ability of older Americans
to provide for their economic needs through work. Viewed in its totality,
there is clear and convincing evidence that older workers are worse off
now than in the prerecession peak period, the fourth quarter of 1973.
In terms of sheer numbers, younger persons bore the brunt of the
recession, particularly men in blue-collar occupations. Younger
workers were more severely affected in terms of job loss during a
brief period. To consider the recession as less damaging to older
workers, however, would be misleading.
The number of employed younger persons has now reached its
prerecession peak, with females playing an increasingly active eco-
nomic role. For persons above age 55 (and above age 45 as well)
the past year has been one of nonrecovery.
Thus, economic events of the past 21/ years (since the last "peak")
should be examined in the context of younger and older workers.
For younger workers, there was a period of sharp job retraction
followed by some improvement. For older workers, it was a time of
continued job diminution, exacerbated by a general recession and
overall economic sluggishness.
Since data are available in great detail, the position of older workers
can be documented. In a policy sense, however, the growing plight
of mature Americans vis-a-vis the world of work needs to be explored
more fully.
In this study, a number of measures are used to illustrate the
growing disadvantage at which older persons now find themselves
'The National Bureau of Economic Research defined the recession as having occurred
following the fourth quarter of 1973, or prerecession "peak" period. until the first quarter
of 1975, or "trough." This study is an analysis of economic activity, with particular ref-
erence to the employment of older workers, between those two points, and up to the first
quarter of 1976. The year between the trough and current period represents the extent
of economic recovery to date.

73-236 0 76 2

in our labor markets. These five factors are unemployment, employ-
ment, labor force participation, discouragement, and poverty.
It is the total effect of all these measures, not just any single factor,
that allows a comprehensive picture to develop. In that respect, the
total problem in a very real sense exceeds the sum of its parts.
Many older workers are at a competitive disadvantage which, if not
recognized, may lead to permanent economic dislocation for a whole class
of Americans; a class presently composed of those born prior to, during,
and shortly after World War [. Signs of this dislocation are becoming
evident. The increasing poverty of older persons is but one, albeit visible
and a very disturbing sign.

As with all devices to measure groups of people, unemployment
can be viewed in an absolute sense (i.e., the number or percent of
jobless persons) or in a relative one, comparing groups along demo-
graphic lines. During the period under examination, the number of
all unemployed workers jumped from just under 4 million to a high
of 8.3 million, then receded to the current (first quarter 1976) level
of 7.9 million.
For older workers (age 55 or older), however, joblessness is growing.
Unemployment jumped from 376,000 in the fourth quarter of 19732 to
729,000 in the first quarter of 1975, and reached 763,000 early in 1976.
(Hereafter, the quarters will be designated by a Roman numeral.) This
last change represents a 4.7-percent increase in the number of older
unemployed persons over the past year alone, while the overall number
of unemployed (of all ages) fell by 4.5 percent3 from trough to present
Unemployment is also expressed in terms of duration, or the average
number of weeks that people have been without a job. Two tendencies
generally operate here. First, duration increases as economic conditions
deteriorate. Second, duration usually increases with age. Older workers,
during good times and bad, do not find jobs as rapidly as their younger
counterparts. During slack periods, however, the duration of unem-
ployment increases, and quite often markedly.
2 For convenience, the three benchmark periods of this study are designated in the tables
(and sometimes in the text) by the specific quarter (in Roman numerals) and year.
3 All calculations are based on actual figures. Because of rounding, the percentages
shown may vary slightly.
[In weeks]
Age/sex IV-1973 1-1975 1-1976
45 to 54---------------------------------------------- 15.1 14.2 22.9
55 to 64---------------------------------------------- 16.7 15.6 23.8
65 plus----------------------------------------------- 13.9 17.5 25.1

All ages-....
45 to 54-....
55 to 64__
65 plus
All ages
Both sexes:
45 to 54 ........................................
55 to 64 ------------------------------------------------------
65 plus-..........

10.7 12.3 17.7

11.4 13.5
14.4 14.1
9.2 19.9

24. 1
24. 5

8.6 10.7 15.3

13.1 13.9 21.5
15.3 15.0 23.9
12.5 18.3 24.9

All ages 9.7.............11.6................16..........7...

9.7 11.6 16.7

These two factors have operated to the disadvantage of older
workers and have actually extended their joblessnes over the past
year, despite the economic recovery. This is evident from the data
in table 1.
For men 65 and above, for example, average duration jumped
by 7.6 weeks between 1975 and 1976 (25.1 weeks compared with
17.5 weeks). For all men the mean (average) rise was only 5.4 weeks
(17.7 versus 12.3 weeks).
Similarly, for women 65 or older, the average spell of unemployment
increased by almost 5 weeks-from 19.9 to 24.5. In the case of q'orue e
55 to 64 years old, the average duration rose by 10 w'eekls, frota 14.1 to
Another factor to consider is relative unemployment, in terms of
differential effects on specific subgroups by age and sex.
Two such measures are the relative unemployment rate and group
percentage of unemployment shown in table 2. The relative unemploy-
ment rate reflects a particular subgroup's rate compared with the
national average for that time period. For example, if the national
unemployment rate is 8 percent and the unemployment rate for
persons 55 or older is 6 percent, their relative unemployment rate is
0.75. The group percent of unemployment reflects that portion of the
total number of unemployed persons who are in a particular subgroup.
For example, if the total number of unemployed is 7 million and
700,000 are aged 55 or older, that group's share of unemployment is
10 percent. Low relative unemployment rates for older workers are
deceptive, however, and tend to hide the difficulty faced by persons
beyond middle age in obtaining work.
This occurs since more older workers withdraw from actively search-
ing for jobs and are not enumerated as unemployed. This reduces
their number and percent compared with all age groups. 'Many of
these persons show up as discouraged workers, a point that will be
amplified more fully below. To some extent, however, the ditinction
between discouragement and unemployment is a matter of degree
and definition rather than lack of interest in work.
Relative rates Percent of total
Agelsex IV-1973 1-1975 1-1976 IV-1973 1-1975 1-1976
55 plusO------------ 0.57 0.56 0.64 5.7 5.4 6.0
55 to 64 .............53 .55 .60 4.1 4.2 4.5
65 plus------------ .73 .60 .79 1.5 1.2 1.5
All ages .84 .96 .97 50.8 58.0 57.4
55 plus------------ .57 .58 .62 3.3 3.4 3.7
55 to 64 .............57 .61 .61 2.7 2.9 2.9
65 plus------------ .75 .55 .68 .7 .6 .8
All ages-.......... 1.25 1.05 1.05 49.2 42.0 42.;
Both sexes---------------1.00 1.00 1.00 100.0 100.0 100.0
'See prior discussion for definitions of relative unemployment rates and the group percent of unemployment.

Nonetheless, older workers-particularly men-now have a higher
relative unemployment rate, and account for an increased proportional
share of unemployment than previously. For example, men 55 and
over accounted for 6 percent of all unemployed persons during 1-76,
compared with 5.7 percent in IV-73. The slight decline from peak to
trough periods-especially for workers age 65 and above-is explained
by the more than proportional deterioration in conditions for all other
workers, combined with a substantial withdrawal from the work arena
by older workers unable to retain their previous jobs.
In other words, as the recession's brunt was distributed throughout
the work force, a deceptive relative improvement in unemployment
rates for older workers ensued. The illusory nature of this is best seen
in the context of employed persons, age 65 and over. During the study's
three benchmark quarters (JV-73, 1-75, and 1-76), employment fell:
from 2.9 to 2.8 million, and down to 2.7 million.
The increased group share of unemployment among older workers
is not insignificant either. Combining both sexes, the 763,000 jobless
persons age 55 or over comprised 9.7 percent of the unemployed early
in 1976, rather than the 9 percent that 356,000 older unemployed
represented late in 1973.
At 1976 levels of unemployment, even this 0.7 percent (9.7 percent
minus 9 percent) represents an additional 51,000 jobless older workers.
Or, put differently, 9 percent of the 7.9 million now without jobs, would
be about 712,000, or 51,000 less than the 763,000 actually unemployed.

One of the most easily followed yardsticks of economic behavior is
the labor force participation rate. It is, simply, the proportion of
persons in the work force compared with their total number in the
Over time, changes in this rate signal shifts in the activity of specific
demographic subgroups. Total male participation, for example, has
declined steadily from 87 percent (the 1948 pre-Korean war peak),
to 81.5 percent (the 1965 pre-Vietnam high), to 78.5 percent for the
full year 1975. For older males, this reduction has been substantially
more pronounced-from 72.3 percent in 1948, to 56.9 percent in 1965,
and down to 49.4 percent in 1975.
To some extent, particularly during periods of price stability and
high aggregate employment, this shift represents a voluntary with-
drawal from the work force. The greater availability of private pen-
sions, along with public retirement income and disability benefits,
are usually cited in partial explanation, along with other factors.
In fact, many older men prefer to remain economically active,
particularly since the stable purchasing power of one's income cannot
be assured. The economic squeeze is intensified when growing numbers
of unemployed elderly males are precluded by inadequate labor
demand from finding new jobs.
Table 3 illustrates the decline in male labor force activity throughout
the period of this analysis. Men of all ages are affected, but the par-
ticipation rate for those over 55 in age has declined at approximately
twice the level of younger workers.


During the 1/ years from peak to trough, for example, participation
by younger men (16 to 44 years old) fell from 86.9 percent to 85.8
percent, or 1.1 percentage points. For men above age 55, however, the
drop was 2.2 percentage points.
On an overall basis, labor force participation is postively related to
employment. When jobs are more plentiful the work force expands to
reflect more jobseekers and the participation rate goes up. This
phenomenon is independent of unemployment levels, since not all
persons looking for work succeed and some remain jobless.
Age IV-1973 1-1975 Change 1-1976 Change
16 to 44 ----------------------------- 86.9 85.8 -1.1 85.3 -0.5
45 plus ------------------------------ 67.6 66.2 -1.4 64.6 -1.6
45 to 54 ----------------------------- 93.1 91.8 -1.3 91.5 -.3
55 plus ----------------------------- 51.1 48.9 -2.2 47.9 -1.0
55 to 64---------------------------- 77.9 76.6 -1.3 74.4 -2.2
65 plus ------------------------------ 22.5 21.9 -.6 20.2 -1.7
All ages----------------------- 79.2 77.9 -1.3 77.1 -.8

Thus, during a period of recovery, participation rates should be
rising. From the 1975 trough to the present the total rate (for the
entire labor force) has advanced only minimally, 61.2 percent to
61.3 percent. Moreover, all this gain has been among females, rein-
forcing the strong trend of expanded work behavior by younger
women. One clear indication of the strength of this trend is: While
the overall economy declined from peak to trough, the women 's
participation rate crept upward (albeit slowly) from 45.6 percent to
45.8 percent.
Only elderly women, age 65 and above, experienced a decline and
then recovery in their participation rate during the overall period,
consistent with the expected pattern. Their rate fell from 8.8 percent
down to 8.1 percent, and has rebounded to 8.6 percent. It should be
remembered, however, that less than 1.1 million women age 65 or
older work, usually to supplement inadequate or nonexistent retire-
ment benefits.
For all older workers (age 55 or over), participation rates currently
are 34.2 percent, compared with 35 percent at last year's trough, and
35.7 percent at the peak in 1973. The rate of (ecline has accelerated.
One indication of the magnitude of this decline may be obtained by
taking the peak period (IJV-1973) participation rates, holding them
constant, and applying them to presently enumerated population
levels. For example, the male labor force participation rate for those
55 or older declined from 51.1 percent in IV-73 to 47.9 l)ercent in
1-76. The total male 55-plus population in 1-76 was 18,208,000. The
labor force participation rates for women of corresponding age were
23.6 percent and 23.5 percent for the two quarters in this example. The
female 55-plus population in 1-76 was 23,158,000. The net differencee
exceeds 600,000 workers; 591,000 males and 31,000 females.4
4 Holding participation constant does not capture the combined effects of participation
rate and population change, or distinguish among the reasons for withdra wal front the
labor force. That is done below to estimate the extent of voluntarism in the labor force
exit patterns of older workers. As a first approximation, however, a half million fewer
older workers over the past 21/ years provides a useful working figure.

The labor force participation rates referred to above are based on
standard Bureau of Labor Statistics (BLS) definitions of unemploy-
ment. This means only those persons actively seeking a job during the
4 weeks prior to being surveyed are counted as unemployed.
Discouraged workers are not included in this definition. They are
officially regarded as persons outside the work force (because they
believe jobs to be unavailable and have not actually sought them).
Empirical evidence suggests that many, if not all, discouraged workers
would compete more actively for jobs if economic conditions were
more favorable.4"
For analytical purposes, this permits estimates to be made of unem-
ployment and labor force participation rates by statistically shifting
discouraged workers to the unemployed category. Since the number
of discouraged workers varies inversely with economic conditions, this
technique should have a mitigating effect on the fluctuation in labor
force participation rates.
In other words, since slack conditions lead some persons to become
"discouraged unemployed" rather than "conventionally defined
unemployed," participation rates calculated by this method more
clearly reflect basic trend factors. Conventionally defined unemploy-
ment is more sensitive to the variation caused by cyclical conditions.
When dealing with older workers, however, this alternate approach
to defining participation becomes a useful adjunct. The increased
duration of joblessness and lower probability of finding work act to
generate higher discouragement among those workers who, by
standard definitions, would no longer be counted as available.
These differences can be measured and compared. Table 4 is
similar to table 3, except that discouraged workers are considered to
be unemployed and counted in the work force. The comparison is
useful in separating the trend from cyclical effects.
Age IV-1973 1-1975 Change 1-1976 Change
16 to 44 ---------------------------- 87.1 86.1 -1.0 85.8 -0.3
45 plus--- 68.0 66.8 -1.2 65.2 -1.6
45 to 54 ---------------------------- 93.2 92. 1 -1.2 91.7 -.4
55 plus ----------------------------- 51.7 50.8 -.9 48.7 -2.1
55 to 64 ---------------------------- 78.3 77.3 -1.0 74.9 -2.4
65 plus_-- 23.4 22.8 -.6 21.2 -1.6
All ages ---------------------- 79.4 78.4 -1.0 77.6 -.8

Using the revised definition, total male participation fell during the
recession by only 1 percentage point, 79.4 percent to 78.4 percent,
rather than by 1.3 percentage points in conventional terms, 79.2
percent to 77.9 percent. This lesser drop reflects the shift by some
workers to discouraged status, rather than completely dropping out
and being assigned a non-labor-force designation.
For older men, age 55 and over, two things are evident, as illustrated
by comparing tables 3 and 4. First, there was less of a decline, by 0.9
rather than 2.2 percentage points in the participation rate, from peak
4a Rosenblum, "Discouraged Workers and Unemployment," Monthly Labor Review,
September 1974, pp. 28-30.

to trough. Second and more important, the decline intensified during
the past year. During the recovery, participation rates fell l) 2.1
percentage points on a discouraged basis, but only by I Ipoint oii a
standard basis.
A similar interpretation is derived from the unem ploviuent data in
table 2. To the extent that older men were not among the first laid off
after the recession's onset, the relative impact was not immediately
felt. At or near the trough, however, contintiedeconomic slack resulted
in many older workers being terminated. Once out of work, the
disproportionately heavy impact on them ensued.

Discouragement can be measured not just in its effect on labor force
participation rates, but in terms of its direct impact in numbers. The
total climbed 69.6 percent from the 1973 peak (650,000) to the 1975
trough (1.1 million); then declined 11.8 percent to the present
The aggregate rates of change are not uniformly distributed by age,
however. Even within the older worker category (age 55 and above)
some variation is evident during the period under analysis.
It may be characterized as a sequential wave of di:couragenient,
hitting first the less elderly (55 to 64) during the downturn, followed
by intensified discouragement among more elderly workers.
During the slump phase, for example, overall discouragement
increased 69.6 percent, as indicated above. For workers age 55 to 64,
however, discouragement rose almost twice as rapidly (134.7 percent).
The actual number of discouraged older workers in this age group
increased from 72,000 in IV-73 to 169,000 in 1-75.
Over the past year, the most intensified discouragement has shifted
to the oldest workers. While the total number of discouraged workers
dropped slightly (11.8 percent), the rates of increase for those age 65
and above were: males, 14.8 percent; females, 94.9 percent; both
combined, 40.8 percent.
Other than younger men, aged 16 to 44, who showed sharp rises in
discouragement throughout the entire period, no other group by age
or sex other than elderly workers experienced increased discouragement
over the past year.

The alternate analysis of participation, including discouragement,
serves to identify various factors affecting the labor force. This analy-
sis may now be carried one step further.
The Census population survey categorizes persons not in the labor
force either as wanting a job now, or not, depending on the slurvev
response. Discouraged workers are but one subgroul) of those w)ho
provide a positive answer. The other categories are c5persons who want
a job but are precluded from looking by (a) being in school, (h) bung
ill or disabled, (c) having home and household obligations, and (d)
all other reasons.
Obviously, some of these persons are precluded by their circum-
stances from labor force attachment even of discouraged workers.
Nonetheless, further insight may be obtained by comparing partici-

pation rates for the three benchmark periods as if all persons expressing
any interest in work were part of the labor force.5
First, this measurement provides a parameter of maximum labor
force attachment in the most comprehensive way and represents the
Nation's labor supply under conditions of complete utilization. Second,
in the context of older workers, those expressing an interest in work
(but not in the conventionally defined labor force) may be regaided a
involuntarily removed.
This group may be compared with older persons expressing no job
interest, to ascertain the pattern and intensity of labor force with-
drawal, currently and over time.6
But when the labor force includes all persons who have expressed
an interest in work as well as those actually employed or overtly
seeking a job, trend changes are further emphasized and cyclically
induced swings in labor force participation further dampened. This is
shown in table 5.
Age IV-1973 1-1975 Change 1-1976 Change
16 to 44---------------------------- 88.9 88.7 -0.2 88.1 -0.6
45 plus ----------------------------- 69.0 67.7 -1.3 66.3 -1.4
45 to 54 ---------------------------- 93.9 92.9 -1.0 92.6 -.3
55 plus ----------------------------- 52.8 51.7 -1.1 49.9 -1.8
55 to 64---------------------------- 79.5 78.2 -1.3 76.2 -2.0
65 plus ----------------------------- 24.4 23.8 -.6 22.4 -1.4
All ages------------------------ 80.9 80.3 -.6 79.5 -.8

Making a specific comparison of participation rates on this basis
with table 4, those calculated with discouraged unemployment in-
cluded the unenviable position of older men is shown clearly. Focusing
on males age 55 and above, "want-a-job participation" fell by only
1.8 percentage points during the past year, whereas the decline was
2.1 points on a discouraged participation basis.
The diminished fluctuation indicates that older men in growing
numbers want to work. When viewed in conjunction with employment
and unemployment, however, this means that their withdrawal from
work attachment has not increased as rapidly as their access to and
ability in obtaining jobs.
The assumption of growing involuntary retirement, while logical
(and pointed to by other evidence), requires one final corroboration
because the existence of diminished participation-rather than its
causes-is all that has been demonstrated above. The final confir-
mation is supplied by comparing the number of persons not in the
labor force who want a job with all persons of that age who are not
counted as workers.
5 This is consistent with section 206(a) of S. 50, the Full Employment and Balanced
Growth Act of 1976. Under this proposal, employment opportunities would be provided to
"adult Americans able, willing, and seeking to work but who, despite a serious effort to
obtain employment, are unable to do so." Under these provisions, older workers in particu-
lar would face a more favorable economic environment.
6 While this analysis is tentative and exploratory, conventional labor force analysis
fails to distinguish satisfactorily between voluntary and involuntary older worker with-
drawal. Past practice has been to designate as retired all older persons no longer active
in the labor force.

This ratio, over time, indicates a clearly growing group of non-
workers who would prefer some attachment to the labor force. The
totals by sex, and for both sexes combined, indicate that this phenom-
enon is not limited solely to older workers, but may be generalize(I
across the economy as one indication of prolonged subnormal growth.
(ln percent]
Age/sex IV-1973 1-1975 1-1976
55 plus----------------------------------------------- 3.5 3.6 4.4
55 to 64. ..-----------------------------------------------6.9 7.2 7.3
65 plus. ..-----------------------------------------------2.4 2.5 2.8
All ages---------------------------------------------- 8.2 10.7 10.5
55 plus ----------------------------------------------- 2.2 2.4 2.5
55 to 64----------------------------------------------- 4.2 4.4 4.9
65 plus------------------------------------------------ 1.1 1.4 1.3
All ages---------------------------------------------- 7.0 8.4 8.6
Both sexes:
55 plus ----------------------------------------------- 2.6 2.8 3.0
55 to64 ----------------------------------------------- 4.8 5.1 5.6
65 plus------------------------------------------------ 1.6 1.8 1.8
All ages---------------------------------------------- 7.3 9.0 9.1

If the ratio for persons 55 years and above is held constant at the
peak period (fourth quarter 1973) level of 2.6 (and multiplied by
subsequent populations), a difference of about 95,000 is observed.
That may be regarded as a preliminary and conservative estimate of
the push-out effect, or involuntary withdrawal, from work attachment
on the part of older persons.7
The importance of a job cannot be overstated. Through work
most persons derive their income and sense of well-being. For many,
work is intrinsically satisfying as well as an economic necessity.
Thus, the loss of or inability to obtain a job creates many individual
problems, particularly for the older worker whose attachment to the
labor force has spanned several decades.
The decline in employed older workers carries these intangible
yet real costs both to the persons affected and to society. The level
of employment is most sensitive to the business cycle, so that a
decline occurs during the peak to trough phase, followed by an
increase as part of any recovery. The recent recession has been no
exception, at least in the aggregate.
Total employment fell from a preslump peak of 85.8 million to a
trough low of 82.9 million, or a reduction of jobs by 3.4 percent.
During the year ending with the first quarter of 1976, the current
recovery period, employment rose by 2.1 million persons, to 85
million, or by 2.5 percent.
7 This figure differs somewhat from estimates derived below; the discrepancy arising
from different statistical techniques, with this, the less methodologically rigorous, being
regarded as a conservative or minimum estimate of involuntary withdrawal.


Employment remains below its prerecession peak, by almost 1
million jobs, while the overall labor force continues to expand. The
unemployment rate, therefore, remains distressingly high.
For the older worker, by contrast, even a partial recovery from
the 1-1975 low has not occurred. As table 7 illustrates, the employ-
ment of persons above 55 years of age, of both sexes, continues to
diminish. The slight increase by women is more than offset by a male
decline of 433,000 employed over the entire recession and recovery
period, or by 2.8 percent from the late 1973 level.
For the elderlv worker, age 65 and above, the job erosion is even
more dramatic. Since the fourth quarter of 1973, 160,000.fewer persons
in this category have held employment, or a reduction by 5.6 percent
since that time.
[In thousands]
Percent Percent
Age/sex IV-1973 1-1975 change 1-1976 change
55 plus-- 8,673 8,468 -2.4 8,240 -2.8
55 to64- -6,841 6,666 -2.6 6,566 -1.5
65 plus_ -1,832 1,802 -1.6 1,674 -7.1
All ages- 52,341 49, 985 -4. 5 50, 669 +1.4
55 plus -5,110 4,990 -2.4 5,156 +3.3
55 to 64 -- -- 4,083 4,037 -1.1 4,131 2.3
65 plus- -1,027 953 -7.2 1,025 +7.6
All ages- 33, 481 32, 883 -1.8 34, 279 +4.3
Both sexes:
55 plus 13,783 13,458 -2.4 13,396 -.5
55 to 64 10,924 10,703 -2.0 10,697 -.1
65 plus-- 2,859 2,755 -3.6 2,699 -3.0
All ages --- --85,822 82,869 -3.4 84,948 +2.5

One of the inevitable correlates of insufficient employment is
poverty. In turn, poverty then becomes an explanation for many of
the Nation's social problems. This linkage is especially visible in the
context of older workers.
On the basis of CPS data, persons in poverty may, for analytical
purposes, be separated from the nonpoor.8 This study's key finding,
the deteriorating employment situation for all older workers in the
face of some aggregate recovery, is particularly germane for the elderly
poor. The extent to which a job and earned income spells the differ-
ence between poverty and a higher living standard is developed in
the discussion below.
To begin with, the proportion of older persons below the poverty
line is continuing to rise, particularly those age 65 or over. Of all
persons in poverty, for example, 18 percent are age 65 or older; up
from 17.1 percent during the fourth quarter of 1973.
8 Poverty in this study is based on the definition used by the U.S. Department of Labor,
Bureau of Labor Statistics. In recent years, the income cutoff line has been adjusted
annually to reflect inflation so that the amount (in current dollars) is not fixed.

[in percent]
Age sex IV-1973 1-1975 1-1976
55 plus ----------------------------------------------------- 13.7 13.6 13.9
55 to 64 ---------------------------------------------------- 6.3 6.2 6.3
65 plus ----------------------------------------------------- 7.4 7.4 7.6
All ages --------------------------------------------- 46.3 46.3 46.4
55 plus ----------------------------------------------- 17,4 17.5 17,9
55 to 64 ----------------------------------------------------- 7.6 7.5 7.5
65 plus ----------------------------------------------------- 9.7 10.0 10.4
All ages --------------------------------------------------- 53.7 53.7 53.6
Both sexes:
55 plus ----------------------------------------------------- 31.1 31.1 31.8
55 to 64 ---------------------------------------------------- 14.0 13.7 13.8
65 plus ----------------------------------------------------- 17.1 17.4 18.0
Total ----------------------------------------------------- 100.0 100.0 100.0

At the same time that the proportion of elderly persons among the
poor has risen, the overall percent of our Nation's citizens classified
as in poverty has fallen. Throughout the three benchmark quarters of
this study, poverty has lessened somewhat despite the recession, at
least if we focus on the general population and its younger components.
For those 55 ,ears of age and above, but particularly those beyond age
65, the absolute lack of a share in the economic recovery has led,
especially during the past year since the trough, to an increased
percentage in poverty.
Since the proportion of elderly people has risen faster than the
general percentage decline in poverty, the absolute number of older
poor persons has also gone up. At present 29 million Americans are
beneath the poverty income level, up from the 28.7 million 2'2 years
The poor, particularly the elderly poor, have lower labor force
participation rates.9 Similarly, the proportional shares of the labor
force and of employment held by older workers in poverty has di-
minished over the past year.
Moreover, the differences in labor force participation rates between
the poor and nonpoor are widening for virtually all age sex subgroups,
both from peak period to trough and trough to the present. This
pattern is not limited to older workers, and is an ominous sign for
persons of all ages.
Where participation rates are trending downward, as is the case
with males, men in poverty status are dropping out of the labor force
more rapidly. For females, where participation rate> (particularly in
the younger age cohorts) continue to rise, the gains are at a lesser
rate-also allowing the differential to expand.
1 Comparisons are possible only with labor force participation rates for the nonpoverty or
total population using the standard BLS definitions. Poverty statistics are not available on
a discourag-d worker basis. or for other persons not in the labor force who want a job. If
analyzed, this data might prove illuminating.

[Percentage points of labor force participation rate
Age sex IV-1973 1-1975 1-1976
16 to 44....---------------------------------------------------5.4 6.6 6.7
45 plus....---------------------------------------------------10.2 11.9 12.3
45 to 54--------------------------------------------------- 7.7 10.3 10.1
55 plus---------------------------------------------------- 7.3 8.6 9.6
55 to 64--------------------------------------------------- 10.2 10.1 10.9
65 plus.....-------------------------------------------------- -2.7 -.1.9
All ages.-------------------------------------------------- 7.7 9.6 10.2
16 to 44--------------------------------------------------- 5.7 7.4 8.6
45 plus..----------------------------------------------------4.4 5.4 6.6
45 to 54--------------------------------------------------- 3.6 5.0 6.5
55 plus---------------------------------------------------- 2.5 3.3 3.9
55 to 64-.....------------------------------------------------- 3.3 4.0 5.5
65 plus.-----------------------------------------------------.3 .8 .3
All ages-------------------------------------------------- 5.9 7.3 8.7
Both sexes:
55 plus---------------------------------------------------- 4.6 5.7 6.6
55 to 64..---------------------------------------------------7.2 7.5 8.7
65 plus-------------------------------------------------- -1.4 .2 .4
All ages-------------------------------------------------- 7.0 8.7 9. 6

The absence of jobs, and attachment to the labor force, seems to
express succinctly a major component of the difference between poverty
and nonpoor status. For example, as shown in table 9, a difference of
7.7 point ts in the labor force participation rate existed for men just
prior to the recession. That is, during the fourth quarter of 1973, non-
poor men had a participation rate of 80 percent, while men in poverty,
a 72.3-percent rate.
By the first quarter of this year the rates for all men had fallen
further, to 78.3 percent for those not in poverty, and 68.1 percent for
poor males. The difference had expanded to 10.2 points of participation
The same phenomenon applies to older workers, to medium-aged
workers, and to younger workers. For the civilian labor force as a
whole, a 7-point participation rate difference at the peak in 1973 has
grown to 9.6 points at present.
Inasmuch as this study encompasses the economic difficulties of
older workers, the problem of expanding differential rates of labor
force participation on the basis of poverty status and age must be
emphasized. In general, however, the withdrawal from labor force
activity of persons of all age groups drawn primarily from the ranks
of the poor requires special attention and possible program activity.
This set of comparisons reveals additional differences in attachment
to the work force not evident when poverty and nonpoverty status
are ignored and participation treated homogeneously by age and sex.
Or, in other words, labor force participation, dichotomized in this
manner, follows a differential course for the poor and nonpoor.
This can best be summarized as follows: For the nonpoverty labor
force, participation rates have (since the fourth quarter of 1973) been
subject to both cyclical and trend influences. Male rates are declining
(although less sharply than when poverty-status men are included).

Tile rates for most woien rose even while economic act ivityV ebbe(l
from peak to trough, largely reflecting their iiceased Choice to be
employed outside the hoine.
With specific reference to older workers, the differencee in participa-
tion rates (shown in table 9) is not as severe-6.6 points for both s exes
age 55 and above-compared with 9.6 points for workers of all ages,
during 1-1976.
When viewed as a percentage difference between poor and Iollpoor
elements of the labor force, the IS.5-percent ga) for older workers
(6.6 points on a base participation rate of 35.7 percent.) exceeds tlie
15.4-percent average gap for workers of all ages (9.6 points on a base
rate of 62.5 percent)."
In contrast, for workers in poverty, the participation rate:-; have
uniformly declined. The only exception to this is younger women,
ages 16 to 44, and elderly females, 65 years and above, during the
past year of recovery. In neither case, however, was the increase
sufficient to restore those groups to their prerecession participation
For women in poverty, then, labor force participation has diminished
over the past 2 1 years. By way of contrast, all female subgroups in the
nonpoverty category (other than age 65 and beyond) are participating
at much increased rates when compared with late 1973. In fact,
virtually all growth in the entire labor force is concentrated there.
For older workers in poverty, the net decline throughout the entire
period under study was substantial. Combining both sexes, a dro) of
3.1 points (from a participation rate of 32.2 percent to one of 29.1
percent) occurred. For men in that age group the drop was even more
pronounced: 5.1 participation rate points from 45.5 percent to 40.4
percent. Translated into terms of percentage change, an 11.2 percent
withdrawl rate took place for men; 9.6 percent for older workers of
both sexes.
Another way of measuring the declines outlined above-as they
affect older workers-is in terms of proportional shares of both labor
force and employment. If we limit our focus to persons in poverty, a
clear and steady shift along well-delineated age lines has occurred.
Younger workers, age 16 to 44, now account for 64.4 percent of the
labor force, compared with 63.4 percent in late 1973. Workers 45
years old and above have a diminished share of the labor force, 35.6
percent compared with 36.8 percent.
Similarly, the share of jobs held by employed poor persons has fallen
to 37.5 percent from the 37.9 percent of several years ago. Conversely,
the share of employment going to younger persons within the poverty
group is steadily (if not rapidly in the face of economic sluggishness)

Differences in labor force participation rates are one important
factor separating poor from nonpoor Americans. This information
permits another question to be addressed, at least hypothetically. If
we wish to assume that persons in poverty could increase their par-
10 In general, comparisons of participation rates will provide similar results. While the
absolute rate differences may not be as large for oli'er workers as for persons of all ages,
the impact (measured by percentage change) over time is usually greater.

ticipation rates to parity with the nonpoverty population (and, by
implication, earn a nonpoverty income), how many would be affected?
Or, put differently, how large of an increase would be required in the
labor force to ameliorate poverty for older workers through expanded
labor force participation?
For persons of both sexes, age 55 and above, the necessary increase
would be about 350,000. For the entire poverty classification labor
force, almost 2.7 million more workers would be involved. In perspec-
tive, this would represent 13 percent of older workers now in poverty,
and 17.5 percent of the existing poverty labor force.
The illustration on page 15 is intended to emphasize the point that
the ability to earn an income is necessary for most persons to avoid
poverty. Given the present distribution of wealth and nonwage income,
few older Americans are completely indifferent to work opportunities.
It must be recognized, however, that the labor force participation
rate is, in this sense, a proxy for the whole range of factors influencing
work behavior. The specific steps that would result in poverty-status
people increasing their participation to the same level as the nonpoor
are (given the limited focus of this study) undefined here.
A sufficient volume of data has been introduced above to measure
changes in labor force behavior for the older American worker during
the period of this study. Interpreting this data into a coherent whole
reveals a total picture that is only in part disclosed by the separate
What fully emerges are the following changes over the past 2Y2
(1) Over 400,000 fewer persons, age 55 and above, remain in the
labor force on the basis of changing participation rate patterns.
(2) Of this total, roughly one in three (31.9 percent), has withdrawn
involuntarily. The effect of this is largely masked from view by an off-
setting increase in the demographic cohort of persons in this age group,
so the net labor force change is not immediately visible. Within the
category of persons withdrawing (as reflected in reduced participation
rates) for other than demographic reasons, the push-out effect, or
involuntary character of withdrawal, is evident.
(3) For the entire adult work force, reduction on the basis of par-
ticipation rate change has been .6 million persons. (Since this has
been more than offset by population gains, there has been a corre-
sponding 2.8 million person jump in the labor force.)
(4) Of the reduction attributable to participation rate change by
virtue of discouragement, more than two-fifths (41.6 percent) can be
considered involuntary. The essential difference between these people
(who are enumerated as not in the labor force but want a job now)
is on the dimension of age. Most younger persons in this category
are likely, at some point, to reenter the labor force. For the older
worker, however, the link with employment may prove more difficult,
if not impossible, to reestablish.
Table 10 indicates the nature of this analysis in more detail. The
actual number of persons age 55 and above in the labor force is 20,000
higher now than at the prerecession peak. Behind this, however, are
the two major factors affecting labor force size, factors pulling in
opposite directions. They must be statistically separated so the effect
of each can be understood more clearly.


Figure 1



1 7.0 Points
60 Difference 9.6 Points

N7.3 Points I
45 9.~,"6 Pointsl"


0 l vI t I I I --o
IV 1 97 31 IV I III IV 1
1973 1974 1975 1976


Male Female Both sexes
Actual labor force difference ---------------------------------183,000 +203,000 +20,000
Attributable to population change------------------------------296,000 -160,000 -456,000
Participation rate change-------------------------------479,000 +43, 000 -436,000
Impact (involuntary withdrawal) attributable to:
Discouraged workers------------------------------------41,000 -79,000 -120,000
Not in the labor force, want job (other than discouraged workers)-- -42, 000 +23,000 -19,000
Net impact -----------------------------------------83,000 -56,000 -139,000
Number Percent
Labor force reduction (from participation rate change) --------------------------436, 000
Involuntary -------------------------------------------------------139,000 (31.9)
Voluntary---------------------------------------------------297,000 (68.1)

Population change, in itself, will change the work force size in line
with applicable participation rates. Should the factors be operating
in different directions-that is, one increasing, the other decreasing-
the net change could be minimal or even zero.
If both forces are operating simultaneously in the same direction,
the effect on labor force size may be substantial. With particular
reference to older workers, their numbers have been slightly increased
by population change, whereas participation rate change almost (but
not completely) proved an offsetting factor. By sex, all the gain was
by females-exceeding the participation rate drop on the part of
older men.
Going one step further, the labor force decline attributable to
participation rate change (controlling for population) can be further
subdivided to measure involuntary causes. The residual or remaining
unaccounted-for portion is then interpreted as voluntary withdrawal.
About 140,000 older persons have left the labor force involuntarily
during the period under examination. Nearly 300,000 left voluntarily,
or at least provided CPS enumerators with no responses indicating
work attachment. In part, however, a response of this nature could
reflect total inability to find a job rather than a firm desire to fully
retire. Thus, the estimate is a conservative one.
A total increase in discouragement of 213,000 older workers oc-
curred, which represents almost half the participation-related with-
drawal. This was offset in part, however, by a drop in the number of
persons (other than discouraged) in the not-in-the-labor-force, want-
a-job-now category.
It could be argued that this latter reduction is, in itself, a form of
involuntary withdrawal when considering older workers, although not
so for younger ones. That interpretation would, of course, increase
the number, proportion, and rate of involuntary withdrawal. In not
adjusting the data in table 10 to reflect the latter interpretation, the
figures presented there can be regarded as a conservative or minimal
estimate of the problem.
In the final analysis, an unequivocable conclusion of serious and
ongoing economic dislocation is reached. Older workers are playing
the game of musical chairs for a share of the Nation's jobs with one
leg shackled by weights.


Unless this bur(len is removed(-either by siarl)lv iIie(reale(1 iA7re-
gate econoinic activity, specific job creatioll pIro'Lrai for ()lhcr
workers, or some combination of both-the treinl described Oab)ove
are likely to continue.
In a sluggsh, high-unemploy-inent pirofile, the e(coiioiiiic steinn (III
obtain a sufficient labor force from its younger compoiet. G(ivon the
effects of age-ism, exacerbate(l by tlie job short ages of iisufficielit
economic growth, many older )ersons nay face the specter of liitrd-
ship and deprivation in their later years.


It is clear on the basis of data presented above that older workers
are facing a crisis period. Our economy, insofar as it is operating
below capacity, has and is continuing to exclude growing numbers
of mature Americans from the world of work. Amid a shrinking
opportunity for all persons to participate in the labor force, the
elderly are being pushed out into enforced idleness.
The following steps are needed to mitigate-or minimize-the
dislocations that are now largely unchecked and to provide an
important first step in developing a comprehensive national policy
to maximize job opportunities for middle-aged and older workers:
-The Congress should provide full funding to strengthen enforce-
ment activities under the Age Discrimination in Employment
-The 65-year limitation for application of the Age Discrimination
in Employment Act should be removed.1
-Legislation to extend the title VI emergency public service jobs
program under the Comprehensive Employment and Training
Act should be enacted promptly.2 This measure should require
prime sponsors to give special consideration to alternative
working arrangements-including flexible hours, shared time,
and part-time jobs-f6r older Americans.'3
Annualized funding for the title IX older American community
service employment program should be increased from $55.9
million to at least $90.6 million.
-The Humphrey-Hawkins Full Employment and Balanced
Growth Act should be strengthened to assure that the special
needs of middle-aged and older workers are appropriately
-The Department of Labor should initiate affirmative actions to
assure that persons 45 or older are more appropriately represented
under title I (manpower services) and title II (public service
employment for areas with 6.5 percent unemployment for at
least 3 consecutive months) of the Comprehensive Employment
and Training Act.
-The administration should take the lead in educating the Ameri-
can public, private industry, and governmental agencies about
the many advantages of hiring middle-aged and older workers.
-A special commission should be established to improve and
refine data gathering efforts about unemployment among middle-
aged and older workers.'4
Senator Fong has introduced S. 871, which would amend the Age Discrimination in
Employment Act to remove the 65-year age limitation. Similar House bills (e.g., H.R.
25SS ) have also been introduced.
12 On Apr. ;0. 1976. the House of Representatives passed It.R. 129S7. which would con-
tinup the title VI emergency public service jobs program under CETA through Sept. 30,
1976. The Senate Labor and Public Welfare Committee reported out this legislation on
M ay 14. The Senate proposal would extend title VI through fiscal 1977.
1: The Senate Labor and Public Welfare Committee included this provision in H.R. 12987.
14 Specific recommendations as to legislation or full implementation of existing programs
were developed in consultation with David Affeldt, chief counsel, U.S. Senate Special Com-
mittee on Aging.

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