The “Great Retirement” Has Become the “Great Un-Retirement” as Many Workers Decide to Re-join a Hot Job Market
Do you recall the “Great Retirement”? It was all over the news during the pandemic, as workers fed up with the uncertainty of their work environment during COVID decided to opt out entirely, accelerating their retirement plans and embracing new-found freedom as retirees. But as with many sociological trends, that pendulum swings both ways. Now, according to recent research cited in CNBC article by reporter Greg Iacurci, the reversal appears to have already begun.
In his CNBC report, Iacurci writes that there seems to be a steady rise in the number of workers “un-retiring” – heading back to the workplace, drawn in some cases by a healthy job market. As the article states, this trend may help employers who are having a hard time finding qualified, experienced workers. Let’s read on and see whether “un-retirement” is really a thing.
“Un-retirement” Has Trended Up Since Last Summer
Iacurci begins, “Retirees have rejoined the labor force at a steady clip in recent months, attracted by a hot job market and reduced COVID health risks. This ‘un-retirement’ trend could help increase the available pool of workers and ease the hiring challenges businesses have reported.”
And the numbers are pretty convincing: 1.7 million people so far – 3.3 percent of people who reported they had been retired a year ago – have un-retired, according to research from economist Nick Bunker, who works for job site Indeed. And that number represents a continual upward trend, currently almost equivalent to the numbers from before the pandemic in 2019.
Bunker explained, “As COVID seems to be waning, the labor market continues to be strong, and nominal wage growth is still fairly high; that’s enticing people to take jobs.”
The “Great Retirement” Started as COVID Raged
We’re all fairly familiar with the story by now: when COVID began, along with lockdowns and quarantines with no end in sight, many workers chose to retire, some of them much earlier than planned. If financially secure enough to do so, many older Americans chose to retire to avoid the risks of contracting COVID, especially before the vaccines became widely available.
Iacurci explains, “The so-called ‘Great Retirement’ exceeded the flow predicted by the demographic shift of baby boomers into retirement, according to the Federal Reserve Bank of St. Louis. There were 3.3 million (or 7 percent) additional retirees as of October 2021 than in January 2020, economists estimated.”
How many of those retirements were due to factors related to COVID? According to the Federal Reserve, a pretty significant 25 percent.
Rising Portfolio Values, Home Equity Boosted Early Retirement
Other factors certainly made the decision to retire early easier for some. Iacurci writes, “In addition, stock and home values swelled to record levels last year, which may have helped to ease the financial burden of those choosing to retire. The federal government also issued three rounds of stimulus checks to households in 2020 and 2021.”
But some of the same factors that caused older Americans to retire have now prompted the return to work. While early in the pandemic it was a lack of vaccines prompting health concerns, now about 91 percent of people 65 years and older are fully vaccinated, and many feel more comfortable in public spaces. Moreover, because the stock market has reversed course and performed poorly in 2022, those same financially secure retirees may be turning to work for extra income.
Job Openings Hit a Record High
The good news for un-retirees is that it’s an ideal time to look for a job. This is definitely the job seekers’ market, data shows, as business owners are scrambling to fill empty positions and trying to make their workplaces more appealing.
Iacurci writes, “Job openings hit a record 11.5 million at the end of March, suggesting extremely high demand for labor among businesses. Hourly wages (before inflation) are up 6 percent over the past year for the typical worker, higher than any point in the last 25 years, according to the Federal Reserve Bank of Atlanta, which has tracked data since 1997. Businesses have found themselves competing for talent and being forced to raise wages.”
Could a Labor Slowdown Reverse the Trend?
“Of course,” Iacurci cautions, “it’s unclear whether the un-retirement trend will continue. To be sure, there are signs the labor market may be starting to cool amid moves by the Federal Reserve to apply the brakes to the U.S. economy. Many who retired during the pandemic are still young enough to reenter the labor market, according to the Federal Reserve Bank of Kansas City. The number of retirees since February 2020 included 700,000 people under 60 years old; 500,000 age 60 to 67; and 1.6 million age 68 to 75, according to the analysis, published in August.”
He ends his article with the encouragement that many who decided not to rejoin the labor force still have time, if they choose to. It’s not too late to put your plans into action.
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Photo Credit: Scott Lewis on Flickr
(originally reported at www.cnbc.com)