Pensions fuel shortage of American workers: “We are fighting an uphill battle”

The US job market has a people problem: There are simply not enough workers available to fill the jobs employers want to fill. This is partly due to a trend accelerated by the pandemic that will continue quickly, even as the economy returns to normal: Americans are retiring en masse.

Retired workers made up the bulk of Americans who left the workforce in March, according to a new analysis from Morning Consult. That rebound comes after several months of slightly declining pensions, with some older workers returning to the workforce.

But the recent rise in pensions may indicate that some older workers are questioning whether they want to cope with changes such as the widespread shift to hybrid work environments, with more companies asking employees to come to the office a few days a week, noted John Leer, chief economist at Morning Consult. And as the pandemic enters its third year, some may simply be retiring as part of the long-standing demographic shift of America’s aging baby boomer generation.

The result: Don’t expect older workers to return to the labor market to save the economy from labor shortages, Leer said.

“There are a lot of retirees who have stepped out of the workforce, and that was an open question about when they’re coming back,” Leer told CBS MoneyWatch. But, he added, “that won’t be the case. We shouldn’t rely on older workers to drive future job growth.”

Between February and March, the proportion of working-age adults in employment or looking for a job fell by nearly 1 percentage point, abandoning most of the progress made since March 2021, Morning Consult found. About half of that change was due to people retiring, the rest due to things like disabilities and childcare.


Oldest active ranger in National Park retires at 100

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Sure, the data only reflects a one-month change, but it underscores the ongoing pressures facing the labor market. The employment rate – the proportion of adults working or looking for a job – has still not returned to pre-pandemic levels, despite predictions at various points over the past year that the country’s missing workers would eventually return.

But long-term demographic changes put a strain on the U.S. workforce, Leer said. “Structural issues with immigration, retirement and an aging population were there before the pandemic. We are fighting an uphill battle to get people back to work.”

Why Quit High Income Employees?

In some ways, the increase in the number of Americans choosing to retire is surprising, as the highest inflation in 40 years eats into saving and investing. But people who have reached or are nearing retirement age may have benefited from the surge in asset values ​​over the past two years, such as homes and investments, experts say.

Higher-income adults — those who earn more than $100,000 a year — were twice as likely as lower-income workers to say they quit because they were retired or because their jobs required them to work too many hours. discovered Morning Consult.

“Inflation poses a very real risk to higher-income adults, and you’d think that would push them back into the job market, so that’s one of the surprising things” about the findings, Leer said. Some older, higher-income workers may decide that the lingering uncertainties about the pandemic and workplace changes just aren’t worth it, he noted.

Meanwhile, current employees are more concerned about their retirement than actual retirees, according to a recent study by Allianz Life. About 63% of people who are employed say they are more afraid of running out of money when they retire than when they die, the study finds, compared with 46% of retirees. That disparity could be due to the rise in asset values ​​over the past two years, which has bolstered the plight of many older Americans.

“Some people are so well prepared that they retire early,” Kelly LaVigne, vice president of consumer insights at Allianz Life, said of his company’s report.

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