31 May Job Gains by Demographic
May 21, 2012
By Michael J. O’Brien
Despite the weakening jobs data of late, signs of an economic recovery abound. But is the rising tide lifting all demographic boats equally?
Economists continue to argue about the overall significance of jobs-report figures released by the U.S. Department of Labor, but debates notwithstanding, data from earlier this year shows that older workers — those ages 55 and older — may be making a better argument for their employment than their slightly younger competitors.
According the Labor Department’s March 2012 figures, those older workers gained 2.8 million jobs since March 2010, compared to a net job loss of 258,000 for workers between the ages of 45 and 54 during that same time period.
Such figures should not come as a surprise, says John Challenger, CEO of Chicago-based Challenger, Gray & Christmas.
“The 55-plus population is expanding rapidly and, whether by choice or by necessity, many of these older workers plan on working beyond the traditional retirement age of 65,” he says.
Some of these older workers are continuing in the occupations and industries where they spent most of their careers, he says, but many others are starting entirely new career paths.
“Because they may be more willing to work fewer hours or accept lower pay in exchange for better health benefits,” Challenger says, “employers are welcoming these older job seekers.
“The older worker’s experience makes it more likely that he or she can hit the ground running with little or no training and, in many cases, can do the job of two younger workers, simply by knowing the ‘tricks of the trade,’ ” he says.
But, despite the advantages that many older workers offer to employers, Challenger says, recent college graduates should be stepping into a labor market that is more positive than in the recent past.
“Each year, we continue to see improvement in the college-graduate job market,” he says. “Last year was slightly better than 2010, and this year should be slightly better than 2011.”
Challenger points to two surveys to support his theory: one from the National Association of Colleges and Employers that finds employers plan to increase hiring of spring graduates by 10 percent over last year; and a survey from Michigan State University’s Collegiate Employment Research Institute, which finds that employers are planning to hire bachelor-level graduates at a 7-percent higher clip than last year.
Indeed, according to DOL data from March, workers ages 20 to 24 gained 939,000 jobs during that same March 2010 to March 2012 period — second only to the 55-plus segment.
Challenger says that, while the slowly improving economy is creating more opportunities for all job seekers, many companies have started looking beyond recovery toward expansion, and those organizations have to make sure they have started to develop the talent they will need to fuel the next period of growth.
“That means beginning to build the entry-level ranks now,” he says, “so that, over the next five or six years, it is possible to identify and cultivate the high potentials who will drive the company forward.”
There is also new data confirming that the economic recovery is impacting passive candidates.
According to the Corporate Executive Board, for the first time in five years, the ranks of passive candidates — or employees who aren’t actively looking for a new job — shrank in the first quarter of 2012.
While still below pre-recession levels, active job seekers now make up 27 percent of the employed workforce, which the Board calls “another sign that the job market is recalibrating.”
“Overall, this is a positive trend,” says Christopher Ellehuus, managing director of the Washington-based Corporate Executive Board. “It means candidates in the labor market are feeling more bullish about job opportunities in the labor market and are more willing to take risks and move to another job with better career opportunities or better pay.”
Ellehuus says the Board’s new data also finds that employees who left their old companies in the second half of 2011 received 10-percent higher pay with their new employer, up from 8.5 percent in the first half of the year.
“While the global downturn provided organizations with selective opportunities to ‘trade up’ on talent for bargain prices,” he says, “that opportunity appears to be fading quickly as the market begins to re-equilibrate in favor of candidates.”
But one demographic that is not enjoying any effects of a revived economy is disabled workers, according to a new study based on DOL data analyzed by Allsup, a Belleville, Ill.-based provider of Social Security disability representation.
The Allsup Disability Study: Income at Risk finds that the unemployment rate for people with disabilities was nearly three-quarters (74 percent) higher than for non-disabled workers during the first quarter of 2012: 15 percent for disabled workers versus 8 percent for non-disabled workers.
And compared to the first quarter of 2011, the figures show no positive movement for either group: 13 percent for disabled workers versus 8 percent for non-disabled workers.
Allsup has been tracking such figures since the first quarter of 2009.
“People with disabilities often face a much greater challenge in securing employment,” says Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. “Their health condition may make it difficult to continue to work for extended periods, or it worsens so they are forced out of the labor market entirely.”
With all this data, it’s no surprise many HR executives are unsure of their next step, says Challenger.
“This is complex time for HR executives,” he says. “HR has to manage staffing demands for the next six months without losing sight of what will be needed over the next six years.
“Unfortunately,” he says, “those expecting a rapid turnaround and sudden burst in hiring will be disappointed.”