Opinion | Everyone’s Talking About ‘Unretirement.’ It’s Overblown.

“Unretirement” is a popular topic these days in the news media and at start-of-summer parties. The notion is that people who retired when Covid-19 hit are coming back to work, helping their finances as well as the U.S. economy, which had a record 11.5 million job openings in March.

But there’s less unretirement going on than the attention to it would suggest. I’ll show that in a couple of charts.

This first one, from Indeed Hiring Lab, a research group belonging to the job site Indeed, shows that the percentage of people who have returned to work 12 months after they described themselves as retired is back up to where it was in early 2020 — a little more than 3 percent.

The chart shows that even before the pandemic, there was a steady flow of people going from retirement to employment.

To make up for all the people who retired prematurely during the pandemic, the rate would have to go significantly higher than it was before the pandemic and stay there for a while. “That is the big question of the next few months,” Nick Bunker, the economic research director for North America at Indeed Hiring Lab, told me this week. “Can the forces continue to drive down these excess retirements? That is yet to be seen.”

This second chart is even less reassuring. It’s from the Federal Reserve Bank of Kansas City, and it uses the same data, except it looks at the one-month change rather than the 12-month change in employment status. So, for example, the April numbers show the percentage of people who transitioned into employment in April from retirement in March rather than from one year earlier, as in the Indeed Hiring Lab’s chart.

Naturally, the percentages are lower in the second chart because the people shown have had only one month rather than one year to return to work. What’s more interesting, I think, is that the rebound is smaller when measured this way — an increase of a small fraction of a percentage point from its recent low, as opposed to an increase of an entire percentage point in the first chart. The current rate of moving from retirement to employment in this chart remains noticeably below the prepandemic pace.

Jun Nie, the senior economist at the Kansas City Fed who gave me the data for the chart, said he prefers to use the monthly change data because the sample is more complete. He said the April 2022 count picks up about 70 percent of the people who were surveyed in March but only about 35 percent of the people who were surveyed in April 2021. Also, the monthly data allows you to zero in on recent conditions.

More retirees might return to work if the Covid pandemic recedes or if the stock market decline continues to eat into their savings. But the longer people are retired, the harder it is to go back. People lose their contacts at work, they get used to the pace of retirement, and of course, they get older.

Data from the Bureau of Labor Statistics show that the labor force participation rate of Americans ages 55 to 64 was 65.4 percent in April, having recovered to just 0.1 percentage point below its level of February 2020. (Many of those returnees, especially the younger ones, never retired; they just weren’t working.) But the participation rate for people 65 and up, 18.9 percent in April, has not recovered at all from the pandemic and is actually 0.1 percentage point lower than in April 2020.

Color the unretirement trend unimpressive.

The readers write

I am a baby boomer. Every time the United States has had astronomically high gas prices in my lifetime, every company in the supply chain has made tons of money. This recent episode is just a repeat. You can rationalize this increase any way you please. But people like me who are on a fixed income are suffering economically. What is happening is price gouging, and it is the ugly side of capitalism.

Priscilla Rowe

Eugene, Ore.

Quote of the day

“Large organizations cannot be versatile. A large organization is effective through its mass rather than through its agility. Fleas can jump many times their own height, but not elephants.”

— Peter Drucker, “The Age of Discontinuity” (1969)

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