When policymakers and economic researchers refer to “discouraged workers,” they’re describing the unemployed who want jobs, but who’ve given up their job searches – often, during recessions or recession-recovery periods.  Such discouragement also frequently shows up among stigmatized groups. Black and Hispanic workers are consistently over-represented in counts of discouraged workers. 

So are older workers, as my new report, published by the Schwartz Center for Economic Policy Analysis (SCEPA) at The New School, shows.

To understand the dimensions of this problem, SCEPA has established a statistical category that builds and expands on those used by the Federal Bureau of Labor Statistics (BLS) in reporting on unemployment. This additional measure takes in the “long-term discouraged unemployed”: those who want a job but have given up looking for work in the past 12 months. 

In November, 2023, that described some three million Americans – 35 percent of whom were age 55 or older. 

Ominously, more and more older workers find themselves in this distressing boat. SCEPA has been tracking trends on long-term discouraged workers since 2010. Over those past 13 years, the number of these older long-term discouraged workers grew by 23 percent – even as the number of workers 25-54 in this category declined by seven percent.

This trend has clearly disturbing implications for the economic security of older workers. Before we describe them, let’s first take a dive into the numbers.

BLS publishes six different counts of the unemployed, assigning them to categories “U-1” to “U-6.” The standard and most familiar category (“U-3”) measures those without jobs who have actively looked for work in the past four weeks and who describe themselves as available to work. The category U-6 expands on U-3 by adding involuntary part-time or underemployed workers and also "marginally attached" workers to the tally of the unemployed. (Marginally attached workers want to work, and while they haven’t looked for work in the past four weeks, they have looked in the past 12 months.) 

SCEPA’s additional “U-7” measure of more long-term discouragement in job-seeking provides information especially important both during recessions and when focusing on stigmatized workers. 

For November 2023, the BLS U-3 reported 5.8 million unemployed workers, and the U-6 counted 11.3 million unemployed, by also including 3.9 million people working part-time for economic reasons, and 1.6 million workers who were marginally attached. 

For the same period, SCEPA’s U-7 adds three million long-term discouraged workers, creating a revised – and we think more inclusive and realistic – count of some 14.3 million total unemployed in America. 

14.3 Million Unemployed Workers, November 2023.

In January 2010, the “official” U-3 unemployment rate was 10.6 percent – a high figure, reflecting the very halting jobs recovery from the 2008-09 Great Recession. While the U-3 rate spiked again during the Covid-19 recession, it has since fallen sharply to a November 2023 rate of 3.5 percent. 

Returning again to January 2010, workers 55 and older made up 16 percent of the unemployed, using SCEPA’s U-7 measurement. In November 2023, that figure stood at 23 percent. Much, but not all, of this change can be attributed to the general aging of the labor force. 

Feeding this trend is rising representation of older workers in all four types of unemployment included in categories U-3, U-6, and U-7. In particular, the age shifts in official (U-3) unemployment and long-term discouraged workers (U-7) have been dramatic. 

There’s also been a notably smaller reduction in the U-6 count of “marginally attached” older workers over the past 13 years than in the workforce as a whole, as well as a smaller reduction in the U-6 number of older part-time workers.

In short, the overall picture shows two opposing long-term trajectories, with younger and older workers moving in opposite directions. Job gains haven’t been experienced equally, leading to an unemployed labor force that is disproportionately older today than it was at the end of the Great Recession. 

This persistent and hidden unemployment affects many facets of life. For older workers who are employed, it may diminish their bargaining power with employers as they seek fair wages and acceptable working conditions. Many older households also have very little capacity to cope with prolonged unemployment. When faced with significant financial hardship they may start claiming Social Security earlier to replace their lost wages. This early claiming will reduce their guaranteed lifetime income and increase their financial fragility throughout their remaining lives. 

This research highlights the need for targeted policies and support for older individuals in the workforce, ensuring that the benefits of a recovering economy are distributed more evenly across all age groups.

Drystan Phillips is a research associate at the Schwartz Center for Economic Policy Analysis and a PhD student at The New School for Social Research.

Photo by: Cornell.edu