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Joblessness among older workers jumps

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The state of Minnesota's Dislocated Worker program, which helps laid off workers land new jobs, is assisting more older white-collar folks these days. The average age of the workers getting help through the program is now in the late 40s.
Chris Hondros/Getty Images

At  St. Andrew Lutheran Church in Eden Prairie, Pastor Rod Anderson conducts weekly networking and support meetings for unemployed people.   Lately, the meetings have been attracting 150 to 200 people, both from within and outside the parish. 

People stand up and diligently deliver their elevator pitches, summarizing their work history and what new job they'd like to land. 

Pastor Anderson quickly flips through a thick binder of contacts at companies throughout the Twin Cities. Almost without fail, Anderson fires back the name and phone number of someone who might help.

James Melzer
James Melzer
Photo Courtesy of James Melzer

If Anderson can't offer a connection, he'll get one from the job seekers in the room.

Many of the job hunters here are in their 50s. Their gray hair betrays them. Some have been looking for work for weeks; some for years. Many are former executives, managers and other white-collar professionals. 

Last year in Minnesota, the 4.2 percent unemployment rate of workers age 55 and older was lower than the state average of 5.5 percent. But over the past two years, their jobless rate grew at twice the state's overall pace. 

Among the folks at the church networking meeting is Jim Melzer of Eden Prairie.   He's a Baby Boomer whose career -- and finances -- didn't go as expected. Melzer is 53.  He hasn't had a permanent position for about six years, since the ad agency he worked for went under. 

Melzer has supported himself by working on a freelance or contract basis. But now he figures he'd be much better off with a full-time job that provides health and retirement benefits.

"I've lost 45 to 50 percent of my retirement money and it's frightening to think that you'll just be trying to get by on  Social Security--if that's there," he said.     In the job market Melzer is competing against a lot of talented young people who'll work for less. But Melzer has a strategy.

I need more than an hourly wage type of job. I can't just be a clerk at Target.

"What I've tried to do is repackage myself at a discount," he said. "I have 25 years of experience. But I'll work for the price of someone  with 10 years' experience. So, it's very much a discounting situation," he said.

Ouch. 

But that's the reality.

A study by the Urban Institute found that laid off workers age 45 or older took an average wage cut of about 20 percent when they finally landed a new job. That was from 1986 to 2004.  

In this recession, it's a good bet the financial haircuts are more severe.

And those income hits are coming at  a time when many older workers are coping with big mortgages,  onerous college tuition payments for children, rising health care expenses and shrinking retirement savings.

Not so long ago someone of Melzer's age had a lot more job security.   For decades, workers 55 and older were much less likely to lose their jobs than younger workers. That started changing about a decade ago, according to the Economic Policy Institute. Researcher  Emily Garr has been studying    the current recession's impact on older Americans.  

Unemployment rate growth
Since 2006, the jobless rate of workers age 55 and older grew at twice the state's overall pace. Even so, older workers' unemployment rate (4.2 percent) remained lower than the state average (5.2 percent) in 2008. Source: U.S. Bureau of Labor Statistics.
MPR Graphic/Bill Catlin

"There's less job security now," she said. "We're seeing more get laid off and we're also seeing kind of this tension between older and younger workers in terms of the jobs available to them."   An *** AARP study released this month found older workers typically take four weeks longer than younger workers to land new jobs.

Economist Sandy Mackenzie wrote the report.

"The simply have a hard time coming back and getting another job than a younger person would," he said. "And they're also at some risk of having to take a job at a much lower level of pay."

That's not what Jim Melzer wants to hear.     

"I have to work for another 10 years," he said. "I can't retire early. But what do I do in that 10 years? I need more than an hourly wage type of job. I can't just be a clerk at Target. I need to make fairly good money to get back what I lost so I can feel fairly comfortable going into my 60s."

It used to be  folks thought they could hit their 50s and cruise to retirement. But like Melzer, more and more workers are finding the closer they think they're getting to retirement, the rockier the ride gets.