Out of a job and out of luck at 54
A growing number of older workers are losing their jobs as the economy weakens. And many are having a harder time landing new positions.
NEW YORK (CNNMoney.com) -- Too young to retire, too old to get a new job. That's how many older workers are feeling these days.
While it's not easy to land a job in this weak economy, older workers are in a particularly tough spot. Corporate downsizings are hitting this group hard, with many companies looking to shed the higher-paid positions these employees often occupy. Even worse, older job seekers are discovering the search is even rougher as many employers shy away from hiring those closer to retirement than to the start of their careers.
The downsizings come at a bad time for older workers. Not only can't they afford to retire, but many were counting on beefing up their 401(k) accounts in the years before they exit the labor force. Compounding the problem is the slumping stock market, which has left them with a deflated 401(k) cushion to draw on while looking for a new post.
"There are tons of folks out there who cannot afford to live once they've faced that involuntary layoff," said Renee Ward, founder of Seniors4Hire.org, an online community for older workers and companies looking to hire them. "And it takes them a little longer to find a suitable position."
To be sure, workers of all ages are suffering as companies trim their payrolls. The national unemployment rate has jumped to 5%, up from 4.5% a year ago.
But older workers are increasingly getting the corporate ax these days. Among the unemployed age 55 to 64, nearly 42% had been fired or laid off, up from 32.2% a year ago, according to federal statistics for April. The figures are even grimmer for those age 65 and older, with 23.5% getting laid off, up from 10.4% in 2007. These older workers saw the largest percentage point increases of any age group during that time period.
Overall, the unemployment rate for those age 55 to 64 stayed relatively stable at 2.7%, largely because fewer workers opted to leave their jobs or re-enter the job search. The rate for those age 65-plus ticked up a bit to 3.5% as more also chose to resign.
"When the market goes down, the more senior people are the first to go," said Ellen Gottlich, president of Forty Plus of New York, which helps executives and professionals find new jobs.
After they get the pink slip, older workers spend more time on the unemployment line. Many lack the skills to search for jobs in today's online world and to craft resumes and cover letters, experts say. And too often, they are told they are overqualified.
Take Dale Booth. Since being laid off from a computer business systems analyst post at National City Corp. in October, the 54-year-old resident of Medina, Ohio, has sent out hundreds of resumes. He's gone to recruiting agencies and even had his daughter forward his resume to the human resources manager at the hospital where she works.
So far, he's had only one interview. About 90% of the time, he gets no response and the other 10% he gets a form letter thanking him for applying.
His age, he thinks, is a factor because companies are concerned older workers won't stick around and have higher medical costs. Also, though he has told recruiters his salary requirement is $50,000 - $35,000 less than he made at National City - Booth thinks employers view him as a costly hire.
"At my age and experience, there's an expectation that they'll have to pay me more," said Booth, who is married with three grown daughters.
Hunting hard to find new job
It took those age 55 and older an average of 21.1 weeks to land a new job in 2007, about five weeks longer than their younger counterparts, according to AARP.
"Clearly older workers will be more adversely affected because of the time it takes to transition into another job," said Deborah Russell, AARP's director of workforce issues.
During the recession of the early 1990s, older workers were hit hard by mass layoffs. Concerned this is happening again, AARP is reaching out to companies conducting the large-scale downsizings and giving them tip sheets to distribute to older workers. The handouts aim to help workers navigate today's job market by explaining search methods such as online employment boards and the importance of networking.
Many older workers are taking jobs below their pay scale because it's all they can find, said Ward of Seniors4Hire, which is experiencing a greater demand for its services. She's seen an experienced telecom worker making $65,000 a year accepting a customer service position in satellite companies making $11 an hour.
While Ward can find companies willing to hire older workers, many of her listings are for part-time jobs, sales positions, retail clerks or customer service reps. Even then, it can be hard for these job seekers to get hired.
"A lot of people are told they are overqualified," she said.
While some may think those older than age 55 can just retire, it's not a viable option for many, said Steven Sass, co-author of "Working Longer," a new book looking at delaying retirement. Many Americans simply can't afford to stop working that young, he said.
"Most people don't have enough money," Sass said. "If they are going to have a comfortable retirement, they are really going to have to stay in the labor force. But it's tough to get a job when you're old...especially in a recession."
Chuck Dunn knows he can't afford to retire. The 56-year-old has had no choice but to liquidate his retirement account after losing his product development job with a high-end electronics manufacturer in October. Now he's considering selling his house before he becomes a foreclosure statistic.
But Dunn also can't find a job, despite sending out several hundred resumes. He's contacted those he knows in the industry, scoured online jobs sites and worked with his local employment commission with no success.
"This is very frustrating for me since I am in my middle 50s and was trying to save money for my retirement, not destroy my savings," said Dunn, a bachelor who lives in Holly Springs, N.C.
Are you buried under a pile of debt and need help getting out? Did you recently manage to pull yourself out of debt and want to share your story? Tell us about your experience with debt and how the current credit crisis is affecting you. Send us your photos and videos, or email us to share your story.