One of the many impacts of the COVID-19 pandemic still reverberating through the U.S. is the “Great Resignation” and new data indicates that there are nearly 2 million more retirees than expected this year.
Retiree expectations are set by the Federal Reserve Bank’s economic model. However, experts from the St. Louis Federal Reserve Bank have noted for months that excess retirements have continued after the pandemic.
This June, they reported that that there were 2.4 million excess retirees in the U.S. as of April.
“Excess retirements are still well above our predicted trend, which may be contributing to a continued tightness in the labor market and low unemployment rate since the recovery from the pandemic recession,” said Miguel Faria e Castro and Samuel Jordan-Wood of the St. Louis Federal Reserve.
At that time, it looked as though retirements would level off in 2023. Although retirements are down from a 2.8 million gap late last year, numbers remain elevated today and have even risen from 1.7 million in June, said Bloomberg.
“While the gap seemed to be closing earlier in the year, it seems to have widened slightly since then,” said Faria-e-Castro, said according to a report this week from the outlet. “As of September, we estimate about 1.98 million excess retirees.”
Prior to the pandemic, workers age 65 and older participated more in the work force. Bloomberg said the rate dropped from a peak of 20.8% and now is at around 19.3%
“The lack of older workers is creating some shortages. In Michigan, a state law was tweaked to make it easier for teachers to ‘un-retire’ without risking their pensions,” said Bloomberg. However, once Americans are retired, it can be difficult to re-enter the labor market. It takes workers age 65 and older nine weeks longer to find a job than the overall average.
Currently, the U.S. economy is experiencing one of the tightest labor markets in history, the St. Louis Federal Reserve said this week.
“This condition has been shaped not only by a confluence of factors that emerged out of the pandemic labor market but also by demographic trends, such as the retirement of baby boomers and recent changes in migration patterns,” it said.
As retirements remain higher than expected, more laborers in the workforce are overemployed, the Fed explained. This means that they work a full-time job and an additional job or jobs for another employer or employers.
Last month, Audacy also reported that seniors collecting Social Security benefits are expected to see a softer increase to their benefits last year. High inflation resulted in an 8.7% increase last year.