Phyllis Mutschler

(WOMENSENEWS)–Even since the recession officially ended in November 2001, the economy has shed more than 1 million jobs, and employment rates for almost all ages and genders have fallen. Not so for one group.

During this so-called job-loss recovery, women between the ages of 55 and 64 have expanded their presence in the paid work force.

More and more women are staying in the paidwork force after they reach the age of 55. Forsome, it’s a choice. They want to pursue a career they feel is at its peak. For others it’s a necessity. With healthcare costs on the rise and stock-market losses eating into retirement income, many women are earning less than men and they feel they simply cannot afford to retire.

This group of women has been gaining ground in the work force for more than a half century. In 1948, when the Bureau of Labor Statistics began tracking employment rates for women in the older bracket, 23.5 percent earned income. In 2002, that rate had mushroomed to 53.2 percent. The employment rate measures the share of the given population that is earning income.

Eye-Catching Gain during Recession

The employment-rate rise among older female workers has become particularly eye-catching in the past couple of years as this cohort set itself apart by being the only one to register an increase during the recession and economic decline.

"This group has without doubt done better on this one key measure," said Jared Bernstein, an economist and co-director of research at the Economic Policy Institute in Washington, D.C.

The numbers suggest that this group is, for some reason, actually thriving in adversity.

Before the recession began in March 2001, 52.4 percent of women in this age bracket were working. As of last month, that figure had expanded to 55.3 percent, the Bureau of Labor Statistics reported on Friday. The participation rate of men in the same 55-64 category had been steadily declining until this month. In March 2001, the participation rate was at 65.9 percent. In September, it fell to 65.7 percent, before rising to 66.7 percent in October.

The participation rate of women between 25 to 54 declined to 72.1 percent in October from 74.7 percent in March 2001. Among men in the same age group, that rate fell to 86.4 percent from 88 percent.

Onlookers are quick to parry any bullish interpretations of the figures with reminders that many older women are working because they are under fairly profound financial pressure to do so.

"There are a lot of things going on," said Sara Rix, a senior policy analyst for the AARP, (formerly the American Association of Retired Persons), based in Washington, D.C. "It is not simple, and we don’t really know all of the reasons for what has been going on, particularly over the past couple of years or so."

Still Filling the Retirement Cushion

"You have a lot of professional, skilled middle-aged women who are saying they are at the peak of their careers," said Rix. But perhaps more significant, she says, are the numbers of women "who see retirement on the horizon but decide to stay in the labor force longer to accrue pension benefits, save more in their 401k plans, and make sure they get their social security benefits as high as they can."

Bernstein pushes that point further.

"There are two motivations and nobody knows which is more pressing," he says, "Are you working more at the end of your career because your pension has been shot to hell or to keep healthcare? My own bias is that it is probably more healthcare, but pensions play a role."

Studies have shown that women’s salaries and pensions are, in general, lower than men’s, making the worries about healthcare and retirement costs more acute for women in the same age group. On a brighter note, however, women in this age group have been far less scathed by the layoffs that have hit male-dominated sectors such as manufacturing. The service and healthcare sectors where women are more dominant have been less vulnerable to the effects of the economy’s recessionary cycle.

Health Costs a Major Consideration

Even though the inflation rate has fallen to 2.5 percent for the nine months ended in September from 3.4 percent in the same period of 2000, health care costs have increased about 7.3 percent annually. That rise is one of the primary reason that older workers are finding they have less than expected as they enter retirement.

"People underestimated how much money it was going to take to get them though advanced age," said Phyllis Mutschler, executive director of the National Center on Women and Aging at Brandeis University in Waltham, Mass. "Even when they are eligible for Medicare, healthcare costs are rising steadily. This is why people’s anticipation did not meet reality. I just don’t think people could have prepared for this level of inflation."

The stock market losses of the past three years have compounded the problem, chipping away the value of 401k plans.

"Clearly there are a lot of older people who do not have enough resources," said Vicky Lovell, a study director at the Institute for Women’s Policy Research in Washington, D.C. "Older women have much higher poverty rates than older men. A lot of women also don’t have the social security or pension income from their own employment history that is sufficient to keep them financially afloat," she added.

Less Pension Income for Women

According to an institute study, "Gender and Economic Security in Retirement," published in 2003, only 30 percent of women 65 and older receive pension income in retirement compared to 47 percent of men in the same age group. When they do, their benefits are only about half those of men.

The study notes that the median annual income of women between 50 and 61 is about $29,000 about two-thirds that of men in the same age bracket whose income was reported at $45,000. The lower salaries might also give employers another reason to hang on to their older female employees.

While many women may be forced to stay on the job, keeping and finding work seems to be a little easier for both sexes in this age group than it once was.

Many workers have been in the labor force for a while and have not faced the level of layoffs because of their seniority. "These workers are fairly secure," said Bernstein. "Age does isolate people from swings in this regard."

Older women seeking to enter the labor force may be having an easier time as well. While Bernstein says he is currently still gathering evidence anecdotally, he surmises that employers may regard older workers–both make and female–as more reliable, mature and knowledgeable.

"An older worker is someone they can count on to be there and get the job done, perhaps better than someone who is younger and dealing with a lot more of life’s hassles."

Marianne Sullivan is a New York-based freelance writer who writes frequently on economics and finance.



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