(CNN) — One of the most insidious myths circulating this year is that young people did not want to work because they managed well with the help of the government. People had too much money, went the narrative of a handful of politicians and experts.
The only problem is, the numbers don’t back it up.
This is the question: Early retirement, whether forced by the pandemic or otherwise made possible, is playing an important role in the evolution of the American job market. And the data shows that retiring boomers, much more so than “bums” millennialsThey are the biggest force behind the labor shortage.
People left the workforce for myriad reasons in the last two years. But among those who left and are less likely to return are the vast majority of older Americans who accelerated their retirement.
Last month, there were 3.6 million more Americans who had left the workforce and said they didn’t want a job compared to November 2019. A whopping 90% of them were over 55 years old.
There are few reasons why this is the case.
- The strong stock market and rising home prices gave higher-income people, especially boomers, more options, says ADP chief economist Nela Richardson.
- The nature of the pandemic means that the risks of going to work are greater for older people.
- Employers are not doing enough to get people out of retirement. They are creating jobs, but not the ones that people want.
- Key Quote: “I may want a 65-inch TV for $ 50, but that doesn’t mean there is a shortage of TVs, it means I’m not willing to pay enough for someone to sell me a TV,” says Aaron Sojourner, labor economist and professor at the Carlson School of Management at the University of Minnesota.
Even the White House has recognized how the retirement issue is distorting our understanding of the labor economy. Jared Bernstein, a member of President Joe Biden’s Council of Economic Advisers, said that once “middle-aged” workers (those over 55) are excluded from the metrics, a much clearer picture emerges of how you’re doing. job recovery because the retirement narrative is stripped away.
There are signs that the labor shortage is diminishing.
First, retirees are starting to go back to work. The “withdrawal cancellation” rate fell to just over 2% at the start of the pandemic, but has soared to around 2.6% in recent months, according to Nick Bunker, Indeed economist.
That is still outside the pre-pandemic rate of around 3%.
Taking people out of retirement may seem cruel, but it is not always the case: Some people retired not because they wanted to stop working, but because it was too risky to work in a pandemic or because they couldn’t find a job where the benefits they outweighed the risks.
Another ray of hope for hiring managers: FedEx, which said the labor shortage cost it $ 470 million in its most recent quarter, says the outlook for staffing is improving.
FedEx said it’s getting a good response from its current hiring efforts, given its current pay package and other offerings, such as an app that provides flexible and employee-friendly scheduling options. In the last week alone, it received 111,000 applications, the highest in its history, and up from just 52,000 for a week in May this year.
The company is also optimistic about keeping many of its temporary hires on staff after the holiday shipping season is over, reported Chris Isidore of CNN Business.
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Retiring boomers are driving labor shortages