Heigh-ho, heigh-ho, it's off to work ...?

by Don Kuehn

The number of Americans age 65 and older looking for work or holding a job has increased 50 percent since 1980, according to a recent report from the U.S. Census Bureau. That's almost 4.5 million of the 33.8 million Americans old enough to collect full Social Security.

What kind of work are these older Americans doing? Well, the largest cohort was in sales (15 percent), but others were working in low-level administrative or service jobs, some opened their own businesses, and some were employed in professions such as architecture, medicine or clerical jobs. And, of course, we all know teachers who had planned to retire at their first opportunity only to find the economy and their paltry savings/investments conspired to delay their dream.

The Bureau of Labor Statistics (BLS) reported June 2003 unemployment at 6.4 percent of the workforce. That's the highest this widely watched index has been for more than nine years. In some places the rate was quite high: 6.6 percent in California, 6.7 percent in Michigan, 6.1 percent in New York, 8.2 percent in Oregon and 12.1 percent in Puerto Rico.

In a satirical article in slate.com it was put this way: "[A]s states slashed budgets, CEOs claimed multimillion-dollar bonuses in exchange for meeting bankruptcy goals, and conservative moralists hit the casinos, unemployment finally achieved an inspiring 6 percent (April), a rate some experts say would be even higher if it reflected the thousands of people who, having run out of benefits, contacts and relatives with sofa beds, are no longer seeking employment but merely a reason to live. Analysts say the trend is likely to continue."

In today's "nervous" economy (a technical term for the recession that officially began in March 2001) a lot of people who had big plans to retire are now rethinking their strategies and considering alternatives. Among the possibilities are part-time work, postponing retirement or finding a new line of endeavor to stay busy and to bring in a few bucks or to qualify for (or pay for) health insurance and medicine.

At the other end of the spectrum are the high school and college students who found their usual sources of employment had dried up this summer. The same goes for newly minted graduates who have been unable to find work in their chosen fields. Optimistic parents who had never before been touched by unemployment had the effects of the weak economy brought home to them (literally) as sons and daughters were unable to find work or couldn't lock down enough hours to make movie money--much less tuition.

In the "good years" (a technical term for the years preceding the current nervous ones) "Help Wanted" signs could be seen in nearly every store and restaurant window. Since then, high unemployment rates and lower teen participation in the job market have marked the summers of 2002 and 2003. The percentage of those holding summer jobs is at its lowest in 55 years, and the unemployment rate is at its highest in a decade. The BLS says two-thirds of American teens are in the labor force this year, down from the mid-1990s.

Kids who waited until school was out to look for a summer job usually came up empty. Part of the problem was that many of the low-wage, entry-level jobs had been snapped up by adults (perhaps by their grandparents) who may have had big-time corporate desk jobs not long before.

According to an article by Kate Zernike in the  New York Times, the unemployment rate for 16- to 19-year-olds, at 19.3 percent nationwide in June, is rising particularly fast for black teenagers. But the trouble finding jobs hits across the country, and all demographics.

Zernike reports that governments have cut money that used to help put teenagers in jobs. Retail stores are increasingly favoring older sales clerks. And teenagers are suffering a kind of push-down effect of the bad economy: Older workers are returning to the job market, the laid-off are settling for jobs they might once have thought beneath them and college students unable to find better work are hanging onto jobs that used to go to high school students, squeezing out the youngest workers.

This comes at a time when college tuition hikes of 20 percent or more are becoming commonplace. We'll have to wait to see what effect the combination of fewer summer jobs, higher tuition and the depressed economy have on college enrollments and the volume of student loans.

If you need a little good news, it's that the stock markets have experienced a bit of a rebound in recent months. Despite the general malaise in the economy, the Dow Jones Industrials and other frequently watched indexes have rebounded to their highest levels in three years. The Dow was up 24 percent, the Nasdaq 49 percent; and the S&P 500 gained 27 percent through early July. But it's too soon to call the current run-up a "bull market" or to declare the recession over.

During almost every market trend, there are periods that run contrary to the general direction. Cyclical periods are short-term episodes lasting about a year. Secular markets are longer-term, multiyear periods. We seem to be experiencing more of a cyclical bull within a long-term (secular) bear market. If that's the case, don't be surprised if stock prices fall back to earlier levels after a brief run-up.

The message is that if you have a job, keep it! If you've been laid off because of budget cuts that have hit almost every state, brace yourself for a tough period of job hunting. If you're thinking of retirement, be sure you have enough savings and investments that, coupled with an expected pension and Social Security (if you're eligible), will meet your postretirement needs well into the future, no matter what kind of economy we might face.