CHICAGO (AP) — It’s an assertion that has been
accepted as fact by droves of the unemployed: Older people remaining on
the job later in life are stealing jobs from young people.
One problem, many economists say: It isn’t supported by a wisp of fact.
"We
all cannot believe that we have been fighting this theory for more than
150 years," said April Yanyuan Wu, a research economist at the Center
for Retirement Research at Boston College, who co-authored a paper last
year on the subject.
The commonly accepted vision of a surge of
workers looks like this: A young post-doctoral student dreams of a
full-time teaching job at their university, but there are no openings.
An 80-something professor who has remained on the job long past what’s
considered "normal" retirement is blamed,
The problem with that
vision is that there are probably full-time teaching positions available
elsewhere, or the person blocking the young grad student from the job
is only 40 years old, economists say. Further, the veteran professor’s
decision to stay employed and productive may stir other job growth. He
may bring research grants to his university allowing for other hiring,
may take on assistants, and may be able to dine out and shop and fuel
the economy more than if he weren’t on the job.
None of that would have happened had he retired.
The
theory Wu and other economists are fighting is known as "lump of
labor," and it has maintained traction in the U.S., particularly in a
climate of high unemployment. The theory dates to 1851 and says if a
group enters the labor market — or in this case, remains in it beyond
their normal retirement date — others will be unable to gain employment
or will have their hours cut.
It’s a line of thinking that has
been used in the U.S. immigration debate and in Europe to validate early
retirement programs, and it relies on a simple premise: That there are a
fixed number of jobs available. In fact, most economists dispute this.
When women entered the workforce, there weren’t fewer jobs for men. The
economy simply expanded.
The same is true with older workers, they argue.
"There’s
no evidence to support that increased employment by older people is
going to hurt younger people in any way," said Alicia Munnell, director
of the Center for Retirement Research and the co-author with Wu of "Are
Aging Baby Boomers Squeezing Young Workers Out of Jobs?"
" It’s
not going to reduce their wages, it’s not going to reduce their hours,
it’s not going to do anything bad to them," Munnell said.
Still, many remain unconvinced.
James
Galbraith, a professor of government at the University of Texas at
Austin, has advocated for a temporary lowering of the age to qualify for
Social Security and Medicare to allow older workers who don’t want to
remain on the job a way to exit and to spur openings for younger
workers.
He doesn’t buy the comparison of older workers to women
entering the workforce and says others’ arguments on older workers
expanding the economy don’t make sense when there are so many unemployed
people. If there was a surplus of jobs, he said, there would be no
problem with people working longer. But there isn’t.
"I can’t
imagine how you could refute that. The older worker retires, the
employer looks around and hires another worker," he said. "It’s like
refuting elementary arithmetic."
The perception has persisted,
from prominent stories in The New York Times, Newsweek and other media
outlets, to a pointed question to Rep. Nancy Pelosi last year by the NBC
reporter Luke Russert, who asked whether her refusal to step out of the
House leadership (and the similar decisions of other older lawmakers)
was denying younger politicians a chance. A chorus of lawmakers around
Pelosi muttered and shouted "discrimination," until the Democratic
leader chimed in herself.
"Let’s for a moment honor it as a
legitimate question, although it’s quite offensive," she said. "But you
don’t realize that, I guess."
The heart of Russert’s question
makes sense to many: If Pelosi doesn’t give up her position, a younger
person doesn’t have a chance to take it. That viewpoint is repeated in
countless workplaces around the country, where a younger person awaits a
senior employee’s departure for their chance to ascend.
In the
microeconomic view of things, Pelosi remaining in her job at the age of
73 does deny others her district’s seat in Congress or a chance to
ascend to the leadership. But economists say the larger macroeconomic
view gives a clearer picture: Having older people active and productive
actually benefits all age groups, they say, and spurs the creation of
more jobs.
Munnell and Wu analyzed Current Population Survey data
to test for any changes in employment among those under 55 when those 55
and older worked in greater numbers. They found no evidence younger
workers were losing work and in fact found the opposite: Greater
employment, reduced unemployment and yielded higher wages.
Munnell
said, outside of economists, the findings can be hard for people to
understand when they think only of their own workplace.
"They just
could not get in their heads this dynamism that is involved," she said.
"You can’t extrapolate from the experience of a single company to the
economy as a whole."
Melissa Quercia, 35, a controller for a small
information technology company in Phoenix, said she sees signs of the
generational job battle all around her: jobs once taken by high
schoolers now filled by seniors, college graduates who can’t find work
anywhere, the resulting dearth of experience of younger applicants. She
doesn’t see economists’ arguments playing out. Older people staying on
the job aren’t spurring new jobs, because companies aren’t investing in
creating new positions, she said.
"It’s really hard to retire
right now, I understand that," she said. "But if the younger generation
doesn’t have a chance to get their foot in the door, then what?"
Jonathan
Gruber, an economist at the Massachusetts Institute of Technology who
edited a book on the subject for the National Bureau of Economic
Research, said it’s a frustrating reality of his profession: That those
things he knows as facts are disputed by the populace.
"If you
polled the average American they probably would think the opposite," he
said. "There’s a lot of things economists say that people don’t get and
this is just one of them."
___
Matt Sedensky, an AP writer
on leave, is studying aging and workforce issues as part of a one-year
fellowship at the AP-NORC Center for Public Affairs Research, which
joins NORC’s independent research and AP journalism. The fellowship is
funded by the Alfred P. Sloan Foundation and supported by APME, an
association of AP member newspapers and broadcast stations.
___
Follow Matt Sedensky on Twitter at http://twitter.com/sedensky
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