Older women are digging in and staying in the work force longer. That’s not their fault.
One of the weird things about the economy right now is that the labour market has been frustratingly soft. Wages growth remains very weak, and unemployment is pushing higher.
And apparently it’s all the fault of old women.
That’s what the RBA reckons.
The labour force participation rate – the number of Australians either working or looking for work – has risen to an all time high in recent years.
And when you look at that rise, particularly since the last little dip in 2016, the clear majority of that increase is accounted for by increased participation by people aged over 55. The biggest increase was for people in their early 60s.
And the majority of them were women.
Economists, who are good for nothing as usual, have a few theories about why this increase in happening – why older people are staying in work longer or re-entering the workforce.
It’s possible some older workers are trying to make up for stagnant income growth in recent years by working for longer. They might also be taking advantage of more flexible employment, or the ability to work until an older age because jobs are less likely to be physically demanding these days.
People might also just not have enough super, or still be shouldering a mortgage. They might not actually have a choice!
Government policies have also tried to encourage people to stay in the workforce longer in recent years.
Whatever the case, the participation of older workers, and particularly older women, is going up.
And what that means, as RBA Governor Phil Lowe pointed out recently, is that it has become, “quite difficult to generate a tight labour market, with the flow-on consequence that wage increases remain subdued.”
That is, with more slack in the labour market, unemployment will be higher, wages growth will be lower, and that in turn will mean that inflation and interest rates will stay lower for longer.
To be honest, I’m not surprised. This matches my experience. I see it in the students who come to me.
The struggles that older women face are so often ignored in the stories we tell about the economy.
(Maybe if they weren’t so used to putting on a brave face and soldiering on, we might hear a lot more about it!)
But older women are often entering retirement age in a precarious financial position. They’ve given their lives to their families, so they haven’t built up a lot of super. And then the hubby leaves or dies, and they’ve got to make it on their own.
To make matters worse, they might not own their own home or be looking at the prospect of having to find a new place to live. Try getting a mortgage when the bank thinks you’ve got ten years of work left in you at best.
And on top of all that, you’re invisible, or people assume that because you’re old you must be financially sorted.
So let me make this crystal clear. The economic trends of the past twenty years haven’t gone in favour of older women. They’ve made it tougher.
And many older women, right now, are doing it tough.
So of course we’re in the workforce. We’re not there for the giggles and work-lunches.
But let me also make one point clear. If you’re an older woman, staying in the job-market – especially one that discriminates against your age and gender – isn’t the only option you have.
I’ve worked with many older women, totally overwhelmed about what their retirement is going to be liked, and we’ve worked through it.
We’ve sat down and we’ve come up with a plan.
Trust me. I’ve seen it all. And there are always options.
So shout out to the older women who are digging in and doing their best.
And if our politicians have to work a little harder to get the economic results they want, tough titties!