Baby Boomers driven to retirement by COVID-19 return to work amid labor shortage and high inflation
Jun. 12—In 2021, Paul Boeckman of Washington Twp. joined the surge of people retiring during the COVID-19 pandemic, part of a record-breaking number of people of all ages quitting jobs in "the Great Resignation."
Boeckman, now 62, took an early retirement deal from Synchrony, capping his nearly four-decade career in banking and finance as senior vice president of sales.
But after a year, Boeckman realized he wasn't ready to be done with work, and not because of the rising inflation or declines in retirement investments that are driving some other retirees back to jobs.
"I'm very lucky from a financial perspective," said Boeckman, who in April accepted a part-time job as global business development leader at The Congruity Group in Dayton.
"It was all about being able to continue to contribute. A little bit of adding some purpose back in your days."
The Great Resignation hit businesses hard in the Dayton region and nationwide. Local leaders say resolving the labor shortage is a top priority, and tackling that problem will "absolutely" be helped by retirees returning to the workforce, said Kettering Councilman Bruce Duke.
Duke sits on the governing board of the First Suburbs Consortium of Dayton, which last year issued a report on strategies for retaining and attracting skilled workers, a mission vital to the region's economic well-being.
"Pre-pandemic, we were in a labor shortage, but not as drastic as it is right now," said Doug Barry, president of BarryStaff in Dayton. "We knew the Baby Boomer thing was coming. The pandemic just accelerated it."
Thirty-eight percent of people aged 50 and over who retired, left or considered leaving their job during the pandemic said they would not have done so were it not for the pandemic, according to a national survey by AARP released earlier this year. Twenty-one percent said they retired earlier than planned because of the pandemic.
"We have lost an awful lot of brain power with the people that have retired," Barry said. "Knowledge has retired, and we need to get that knowledge, no matter what level it is, back."
Former retiree Boeckman fit the bill for The Congruity Group, bringing vast experience, wisdom and business connections to the job, said Betsy Westhafer, the company CEO who connected with Boeckman via the Silver Is Gold initiative, which matches retired professionals with companies looking for workers.
"One of the beautiful things about somebody in his position that's been retired looking for this encore career is I would never as a small business be able to afford somebody with his experience and expertise," Westhafer said. "It's such a great fit for a growing company like us to have somebody like that to really elevate our company and for somebody like him that is looking for something a little less high pressure, a little less full time."
Pandemic economic disruption hit all ages
The COVID-19 pandemic sent employment plunging for all age groups amid nationwide shutdowns in the early weeks, followed by massive economic disruptions, closed schools and child care centers and multiple COVID-19 surges.
Unemployment hit a record 14.8% early in the pandemic, and the percentage of civilians aged 16 and over working or looking for work, known as the labor force participation rate, dropped to 60.2 in April 2020, a full 3.2 percentage points below the pre-pandemic rate in February 2020, according to the U.S. Bureau of Labor Statistics.
"What's happened is the pandemic pushed people completely out of the labor force," said Kevin Willardsen, associate professor of economics at Wright State University. "A larger percentage of older people have not re-entered the workforce."
While unemployment has declined dramatically since the pandemic began, Willardsen said people who are older have remained out of the workforce relative to 2019 levels.
An analysis comparing retirement trends before and during the pandemic showed that "as of August 2021, there were slightly over 2.4 million excess retirements due to COVID-19, which is more than half of the 4.2 million people who left the labor force from the beginning of the pandemic to the second quarter of 2021," according to a report by Miquel Faria-e-Castro, senior economist at the Federal Reserve Bank of St. Louis.
He attributed that to the particular danger COVID-19 posed to older people and the rising value of housing and stock assets that made retirement more feasible for some people.
The labor force participation rate for workers 55 and older was stable from 2012 to 2020, when it declined to 39.2. In April the rate was 38.9, even as the total number of employed people in that age group had reached pre-pandemic levels, according to an analysis of BLS data.
"Before the pandemic we had a lot of concern about the silver tsunami. About when will boomers all have a mass exodus from the workforce," said Megan Gerhardt, professor of human capital management at the Miami University Farmer School of Business.
The pandemic created a new dynamic for those older workers who had perhaps planned to hold off on retiring.
"We had people who for health reasons or safety reasons felt like, 'Well I was going to retire relatively soon, I'm just going to go ahead and do it now.' We had people who were laid off because of downsizing and other issues like that," Gerhardt said. "And then we had the people who, when it was time to go back to work had a moment where, not just the boomers but all of us, of saying, 'Do I want to go back?'"
The top reason people surveyed by AARP gave for retiring or quitting during the pandemic was that they were close to retirement age or eligibility. Twenty-one percent gave that as their primary reason, followed by 14% who cited health problems, 10% who cited low pay or feeling undervalued and 7% who cited concerns about COVID.
Forst Elliott, a financial advisor at Edward Jones in Moraine, said at the start of the pandemic he saw more people in their late 50s deciding to retire early.
"They weren't quite ready to draw Social Security but at the same point they didn't want to continue in their current job. They needed a break," he said. "They needed a mental break just to kind of deal with the pandemic and everything that was going on."
People going back to work
As COVID-19 vaccines, testing and therapeutics became widely available, and as companies raised wages to attract workers, people of all ages returned to jobs.
People returning to work pushed the labor force participation rate to 62.3 in May, still below the February 2020 rate of 63.4, according to the BLS. The rate has recovered for people aged 25-64 but in groups over age 65 continues to lag the pre-pandemic rate.
Even so, older workers helped fuel job growth, with the total employed now surpassing 2019 for those aged 65-74 and nearly there for the 55-64 age group, according to April BLS data.
The latest numbers from May put the nation just 822,000 jobs short of the pre-pandemic February 2020 level. Nationally, unemployment was down to 3.6%, compared to the pre-pandemic 3.5%. In the Dayton metro area, the unemployment rate was 3.3% in April.
"So (older workers) did take a few months off during the pandemic — anywhere from three to six months — and then they went back into the workforce because they knew they were not ready to retire," Elliott said. "They did seek employment with a different employer. I did see that a number of times."
High inflation and stock market volatility are also giving older workers pause about retiring, he said.
"What I have seen is people have decided to delay their retirement by a year or two," Elliott said. "They're not retiring as soon as they had anticipated but they are exploring the possibility of a slightly later retirement."
Inflation and quarterly losses eroding retirement funds have an impact, said Donna Kastner, a Del Mar Encore Fellow at the Dayton Foundation's Silver Is Gold initiative.
"I think people are now saying, 'I retired. I thought we were going to be good. Now, if I could land a part-time flexible job that might be the chance to bolster the nest egg just a bit more,'" Kastner said. "I think if you are scrambling and you are woefully behind, a part time job will help, but it will not solve the issue."
Some retirees are looking at getting jobs because they need money for rent or mortgages, gasoline, food, health care and prescriptions, said Vickie Carraher, senior services coordinator for the city of Kettering.
"Whenever you go into retirement you are forced typically onto a fixed income, which is the worst possible scenario you can be in during bouts of inflation," Willardsen said. "They're not going to be able to afford to stay unemployed, to stay retired. My expectation is that if nothing changes these people have no choice. They are going to have to go back to work."
Those who started drawing Social Security sooner than their full retirement age, which maxes out at age 67 for people born in 1960 and after, are penalized if they earn more than $19,560 annually, said Theresa Busher, public affairs specialist for the Social Security Administration. The penalty is a reduction in the Social Security monthly check of $1 for every $2 over the limit. There is no penalty for people who do not draw Social Security after full retirement age.
Carraher said some older retirees who didn't go to college and whose work experience includes factory, retail or food service jobs rather than an office job are having the biggest problems finding work.
"Those individuals may not physically be able to do the jobs that are really plentiful right now. They can't do the standing (or lifting) that is required for some places," she said.
"Jobs that allow you to sit down are few and far between for individuals who that maybe was not their career path. Those are issues that are really frustrating for a lot of people because they do need to go back into the workforce."
Matching workers with jobs
Businesses are very concerned about the loss of Baby Boomers and Generation X employees, as well as the overall labor shortage, said Holly Allen, vice president of marketing and communications at the Dayton Area Chamber of Commerce.
"The result is that workplaces are suffering from a severe loss of institutional knowledge, and in many cases, have lost their most experienced workers, on whom they'd relied for a long time," Allen said. "Onboarding new employees costs a lot of money and supervisor time. That's compounding the labor shortage."
In response, the chamber has hosted a conference and a speaker series on expanding the labor pool, best practices for attracting talent and hiring retired military veterans, Allen said.
Among the industries struggling with shortages are the region's healthcare systems, which have been actively recruiting those who have left healthcare jobs, said Sarah Hackenbracht, president and CEO of the Greater Dayton Area Hospital Association.
"Retirees are more likely to want to return as a volunteer instead of an employee," she said. "However, should any retiree wish to return to the healthcare workforce, every hospital in our region would be eager to have them and will work with those candidates to guide them through the appropriate pathways."
"I would tell somebody to stay open-minded on what it looks like and constantly seek that win-win scenario and to be open to the flexibility because I can tell you it has paid huge dividends for us at Congruity."
Boeckman said the new job is much less stressful than his old job and that he has flexible hours that allow him to coach a high school tennis team and enjoy time with friends and family. And while he does travel for work, it isn't anything like the 30 to 40 percent of time he spent on the road for Synchrony.
Kastner and Gerhardt said employers considering a retired applicant should try to assess what it is that person is looking for in the job. It might be just to pay bills or the person wants to fill time in the day, feel more productive by using their skills or pass on knowledge and mentor others.
"I would argue that it maybe for some people in this age group that the money isn't the most important thing," Gerhardt said. "(But) they want to be paid fairly. They want to be paid well."
She said the opportunity to give back and mentor may make it worthwhile to the retiree to accept a job at a company that can't afford to pay them what they once earned, as long as the new employer makes them feel valued.
"If you feel unfairly paid you're just not coming at all, I don't care how old you are," Gerhardt said. "You can't insult people. Because that's not showing them respect."
Barry said companies are offering higher pay and benefits and are increasingly willing to be flexible, doing things like forming weekend crews or allowing job-sharing, as they try to lure workers. He said it is important for hiring managers to put aside stereotypes about what older workers are able to do.
"I was talking to someone last week who said, 'I just had two people who were in their 80s retire and I love people in their 80s. Can you find me some of those?'" Barry said.
The employer said he was impressed by the older workers' work ethic.
"It wasn't the money or the benefits. They'd already made their money," Barry said. "This was just something to keep them busy, their mind going and something to look forward to every day rather than getting up, drinking coffee and wondering 'What am I doing today?'"
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Resources
State of Ohio — OhioMeansJobs.ohio.gov
Social Security Administration — https://www.ssa.gov/
Dayton Region — 888-329-5724
National toll-free — 1-800-772-1213
Silver Is Gold — SilverIsGold.org
Goodwill Easter Seals Miami Valley Senior Community Service Employment Program — 937-528-6540
Kettering Senior Services — 937-296-3356
In Monday's Dayton Daily News: Financial experts weigh in with tips if you are returning to the workforce after retiring or thinking of retiring during this time of high inflation and stock market volatility.
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