CHICAGO – 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, doesn’t buy the comparison of older workers to women entering the workforce and says 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.
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: 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?”