Not a Good Time to Be Middle-Aged

The New York Times 

May 15, 2009

In this recession, it is better to be old. Being young has some advantages, too.

But being in the middle of the spectrum — in your 30s or 40s — seems to be the worst place to be.

The Pew Research Center released a poll of Americans this week that found people over 65 were generally suffering less from the recession. Fewer of them reported being forced to cut back on household expenses or said they had trouble meeting rent or mortgage obligations.

“The most vivid finding to emerge from this survey is that older Americans — most of whom have already retired and downsized their lifestyles — have been far better insulated from the current storm than those who need to worry about keeping their jobs and building up diminished retirement accounts,” wrote Rich Morin and Paul Taylor of Pew Research.

The elderly benefit from a greater safety net than do other Americans. Many are collecting pensions, and Social Security and Medicare are available. Just 7 percent of those over 65 reported problems in obtaining or paying for health care, a third the proportion of younger adults.

The collapse in stock prices last year also caused less damage to those over 65. The poll found that 23 percent of elderly Americans reported losing at least 20 percent of their investments last year, well below those further from retirement.

Those over 65 presumably had more conservative investments, which fared better. 

The proportion of those 18 to 29 who reported large losses was even smaller, at 15 percent. It appears that many of them lost little because they had little in the way of investments to lose.

Older Americans have also been less affected by rising unemployment. Fewer of them are working, of course, but the number of people over 65 with jobs has risen by 3.9 percent since November 2007, when the total number of people with jobs hit a peak. Since then, the younger the worker, the more likely he or she was to lose a job.

This recession differs from recent ones in that regard. While the youngest workers have always been the most vulnerable, those over 65 fared worse than those in middle age in the three previous recessions — in the early years of the 1980s and 1990s, as well as the beginning of the current decade.

A rise in the number of people over 65 with jobs may not be good news, of course, since it could indicate that some retired people were being forced back into the labor market by declines in their investments. But at least many of them were able to find jobs.

The Pew poll found that the recession was having its deepest immediate impact on those in the “threshold generation,” ages 50 to 64. They were most likely to have suffered significant investment losses, and three-quarters of them said the recession would make it harder for them to afford retirement, a greater percentage than of either older or younger Americans.

But if that generation does end up working longer, workers in their 30s and 40s could find themselves facing more competition for jobs and promotions. Even if the recession does end this year, as the more optimistic economists forecast, the effects of it could be felt for years to come.

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