Opinion | Everyone is talking about “retirement”.too exaggerated

“Retirement” is a hot topic in the news media and at summer parties these days. The concept is that people who retire when Covid-19 hit are returning to work, helping their finances as well as the U.S. economy, which had a record 11.5 million job openings in March.

But no retirement is less of a concern than it might suggest. I’ll show this in a few charts.

The first research group, Indeed Hiring Lab, from job website Indeed, showed that the percentage of people who returned to work after 12 months of self-declared retirement was back to where it was at the beginning of 2020 — just over 3 percent.

The chart shows a steady stream of people from retirement to employment, even before the pandemic.

To make up for all those who retire prematurely during the pandemic, the rate has to be significantly higher than it was before the pandemic, and stay there for a while. “This is the big question for the next few months,” Nick Bunker, director of North American economic research at Indeed Hiring Lab, told me this week. “Can the force continue to reduce these excess retirement numbers? That remains to be seen.”

The second chart is even less reassuring. It’s from the Federal Reserve Bank of Kansas City, and it uses the same data, except it looks at 1-month changes instead of 12-month changes in employment conditions. So, for example, the April data shows the percentage of people who retired from March rather than transitioning into employment in April from a year ago, as shown in a graph from Indeed’s Recruiting Lab.

Of course, the percentages in the second chart are lower because the people shown have only one month, not one year, to return to work. What’s more interesting, I think, is that when measured this way, the rebound is smaller — a fraction of a percentage point increase from the recent low, rather than a percentage point increase from the first chart. In this chart, the current pace from retirement to employment is still significantly lower than it was before the pandemic.

Jun Nie, a senior economist at the Kansas City Fed who provided me with the chart data, said he prefers to use monthly changes because the sample is more complete. He said the April 2022 statistics accounted for about 70 percent of those surveyed in March, but only about 35 percent of those surveyed in April 2021. Additionally, monthly data allows you to zero in on the recent situation.

More retirees are likely to return to work if the Covid-19 pandemic subsides or the stock market decline continues to eat into their savings. But the longer people retire, the harder it is to go back. People lose touch at work, they get used to the rhythm of retirement, and of course, they get older.

The U.S. labor force participation rate for 55- to 64-year-olds was 65.4% in April, just 0.1 percentage points below the February 2020 level, according to the Bureau of Labor Statistics. (Many of these returnees, especially younger ones, have never retired; they just don’t have a job.) But the participation rate for those 65 and older (18.9% in April) has yet to recover from the pandemic and is actually higher than in 2020 It was down 0.1 percentage points in April.

Coloring the unretired trend is unremarkable.

I am a baby boomer. In my lifetime, every company in the supply chain made a lot of money every time the U.S. had astronomically high oil prices. This most recent episode just repeats.you can rationalization Add this any way you like. But someone like me with a fixed income is suffering financially. What is happening is price gouging, which is the ugly side of capitalism.

Priscilla Rowe

Eugene, Oregon

“Large organizations cannot be versatile. A large organization is effective by its size, not by its agility. A flea can leap many times its height, but an elephant cannot.”

—Peter Drucker, “The Age of Discontinuity” (1969)

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