Recession's Seesaw Older Workers Stay as the Younger Set Scrambles to Get a Foot in the Door
At 73, John Clancy was finally looking forward to doing nothing.
“I thought I was going to retire this year or next,” he says in his Irish lilt.
Ahris Kim, on the other hand, was just starting out. The 22-year-old senior at New York University expected that a year as an unpaid intern at an upscale Manhattan hotel would pay off with a full-time job.
“I hoped to grow with the company,” she says.
Then came the recession.
Clancy’s investment portfolio was decimated: So much for plans to do nothing in sunny Florida. And falling occupancy at the hotel where Kim was interning led to layoffs and a hiring freeze. Instead of securing her dream job in sales at a luxury hotel in New York, Kim is now looking for positions in her native Milwaukee, where she will return after graduating.
The experiences of retirement-age workers like Clancy and those just starting out, like Kim, may appear to be just two more tales of this recession. In fact, their stories show how this economy is helping shift the balance in the labor markets in favor of older workers.
The statistics show that even though there are fewer jobs to go around, an increasing number of older Americans are working, often at the expense of younger ones. With their savings depleted by the real estate crash and the stock market’s troubles, older workers are putting off retirement and staying in jobs that otherwise would be freed up for younger workers.
“For young kids, it’s an unmitigated disaster,” says Joseph Quinn, a professor of economics at Boston College. “How would you like to be coming out of college now?”
In the fourth quarter of 2008, the participation rate of older Americans in the workforce rose or remained the same for every demographic category above 55 compared with the year-earlier period, Bureau of Labor Statistics data show. For all the categories below 55, the rate fell.
In New York, similar patterns showed up. From 2007 to 2008, the number of workers over 55 increased by 83,000 to 1.73 million, while the number of workers 54 and under fell by 29,000 to 7.3 million.
The national unemployment rate for workers 16 to 24 was 16.3 percent in March, nearly double the overall rate.
Youth Not Served
|Young workers without skills fare the absolute worst in a down economy, says John Schmitt, a senior economist at the Center for Economic and Policy Research in Washington. Nationally, the unemployment rate in March for workers 25 and over without any college was 13.3 percent, triple the rate for those with at least a bachelor’s degree.|
The trend belies stereotypes of employers firing older, expensive workers first and looking to replace them with younger workers. In fact, say economists, older workers’ skills more often allow them to be reassigned.
The stories of Clancy and Kim show how differently the recession can play out for young and old workers.
Clancy’s challenge is to hold on. On the first St. Patrick’s Day of his delayed retirement, Clancy, who has survived two bypass surgeries and has a pacemaker, worked a 14-hour shift, leaving the bar at around midnight.
Kim has the opposite challenge: not holding her ground, but trying to cover a lot of it, fast.
“If you were sending 10 cover letters last year, now you should be sending 50,” she says, echoing the words of an advisor.
She spent spring break back home in Milwaukee polishing up her résumé and cover letter. She hasn’t ruled out taking an hourly position that could turn into a managerial job when the economy rebounds.
“Anything that would get my foot in the door at the right company would work,” she says.
Clancy has no idea how long it will take him to be whole again. He sold his pub in Cavan, Ireland, in 1992 and had his life savings in investment accounts in Ireland and the United States.
|A new poll by CareerBuilder shows that 60 percent of workers 60 and older are putting off retirement because of the toll the financial crisis took on their long-term savings. One in 10 workers older than 60 fear they will never be able to retire, while 73 percent say it will take up to six years to recoup their losses.|
In Ireland, he racked up losses with the beleaguered Anglo Irish Bank, while his account with Lehman Brothers lost 80 percent of its value, costing him tens of thousands of dollars. Stocks in blue-chip companies that his advisor told him were “can’t miss” turned out to be just the opposite, he says.
So the garrulous host works the lunchtime crowd five days a week at Foley’s NY Pub and Restaurant, a stone’s throw from the Empire State Building. He tells patrons of his days as a waiter on the Queen Elizabeth and of the celebrities—including Jackie Gleason, Joe DiMaggio and Frank Costello—he served in his 10 years working at Toots Shor’s and the Rainbow Room.
“Bob Hope was useless at telling jokes,” he says. “Frank Sinatra was much better.”
Lalia Rach, Kim’s dean at the Tisch Center for Hospitality, Tourism and Sports Management at NYU, says younger workers need to play up the advantages they bring to an employer, such as technical and social networking skills. But, she says, in this economy, they may also have to become more flexible. Indeed, despite Kim’s focus and energy, the recession is likely to change her career path.
“You may have to take a job you wouldn’t have taken a year ago in order to get your foot in the door and prove yourself,” Rach says. “You may have to be willing to accept a salary you wouldn’t accept a year ago, to go geographically somewhere you wouldn’t go a year ago.”
Kim is confident she’ll land the job that will lead her in the direction she wants to go.
“I know there will be demand for our generation in the [hospitality] industry because of the direction the industry is headed,” she says, adding that many hotels now have blogs to help build bonds with customers—just one example of marketing that befits younger workers.
Clancy, meanwhile, keeps busy doing what he does best, schmoozing with the tourists and regulars who show up at his door. He never forgets to show newcomers the pub’s crown jewels: the men’s urinals—which he calls the oldest in the city—and a Tiffany glass window, which were rescued from the original Waldorf-Astoria before it was demolished to make way for the Empire State Building.
“If things come back, I’ll retire,” he says. “But they better hurry up.”