The coronavirus pandemic has crushed many small businesses.
In fact, new Small Business Administration head Isabella Guzman says that an estimated 400,000 small businesses have already shut their doors since the start of the pandemic.
As Guzman works to help small businesses through pro-small business sections of Biden’s $1.9 trillion COVID relief bill, including more loan access, there’s an overlooked factor in the economy that could sink everything.
The economic recovery is going to be a long road as it is, but the establishment is hoping that printing enough money will somehow dodge inflation and keep the ball rolling once again as people get vaccinated and jobs start up again in various sectors.
But there’s something that’s bringing economic numbers down and won’t be easy to turn around.
Many People are Retiring
Older workers are not working nearly as much as before the pandemic. Americans 55 and more in the workforce has gone from 40.3% in February of last year to 38.3% in February of this year, representing almost 1.5 million people leaving the labor force.
That may be good news for younger workers, but for the overall economic prospects many of those older-age jobs won’t be back and it could hit the economy hard.
Proof is in the pudding. While younger workers between 25 to 54 had a decline during that same time from 82.9% to 79.8%, it’s rebounded back up to 81.1% last month. There have still been millions of jobs lost in that cohort, but the employment numbers are rising for 25 to 54-year-olds (plus this age bracket is a much larger share of the labor force so it has bigger numbers overall).
Those 55 and older are just gone from the workforce.
Older folks are more worried about getting sick at work since COVID is generally more dangerous for older people. Many of their jobs will be gone.
“Historically, the likelihood of seeing workers who decided to retire come back into the labor force is quite low. So we do think that some of the drop in the participation rate with older workers is likely to remain permanent,” explained Lydia Boussour, lead U.S. economist at Oxford Economics.
4. Pay Yourself First
A whopping 21% of Americans have $0 in savings.
Why you need to pay yourself now:
– Peace of mind
– Financial stability
– Decreased spending
– Build emergency savings
– Increase your retirement savings
Invest today for a better tomorrow.
— The Millennial Money Woman 💵 (@The_MMW) March 28, 2021
Hit Pause on Economic Growth
As President Biden tries to restart the economy and people itch to get back to work, the decline in the older share of the workforce is concerning. The economy has already been held back by a lack of growth in those over 55 and declining productivity.
“Pushing older people out of the labor force before they’re ready, you lose a lot of the nation’s resources,” explained New School Professor Teresa Ghilarducci.
In addition, older workers who aren’t going to work anymore are not all going to be fine. Many will have to tap into dwindling savings or go to Medicaid and financial assistance services to try to survive. The amount of older people living in their care and doing low income jobs like being greeters at Wal-Mart is increasing constantly, and as some of them leave the workforce completely it’s worth asking where they’re going to go and what they’re going to do?
Some older folks have family to lean back on, thankfully, but others are on their own or don’t have a stable family situation. Where can they go and how can they come back from these hard economic times when their jobs might have been given away to younger workers?
More than half of the country has no retirement plan and is deeply vulnerable to hard times. And when you’re older it’s a lot harder to find new work.
It’s important to remain optimistic and things could definitely still improve even for older workers, but we shouldn’t make the mistake of being cocky.