With a labor shortage, why are so many older workers unemployed for so long?

In the early months of the pandemic, nearly 1.7 million workers over the age of 55 dropped out of the job market. With a public health crisis taking a heavy toll on older people, many retired early or simply quit in order to stay safe.

An additional 4 million workers age 55 and over lost their jobs right after the pandemic began, usually through furloughs or layoffs.

Nearly two-thirds of those jobs have come back, although older workers as a group are recovering at a much slower rate than the rest of the working population. That's disappointing, given that employers are complaining about a labor shortage and many older Americans haven't saved enough for retirement.

"In most recessions, younger workers tend to lose jobs, but this one was different," said Jennifer Schramm, a senior strategic policy adviser at the AARP Public Policy Institute. "Now, many months into a recovery, the big distinguishing factor has been the duration of unemployment."

It's taking a lot longer for older workers to get rehired — twice as long for certain age groups.

It took 20 weeks for an unemployed 25- to 34-year-old to get hired, according to the latest federal data compiled by AARP. For those 55 to 64, the median length of unemployment was over 32 weeks, and for those over age 65, the median time out of a job surpassed 46 weeks.

Here's another way to look at the data. Among those 16 to 54 looking for work, 36% were unemployed for 27 weeks or longer. Among those 55 and over, a whopping 55% were unemployed for that long.

Older applicants have long faced hurdles in the job market, with some employers worried about their technology skills, pay demands and the cost of health care. Many older workers see age discrimination, and those perceptions soared during the pandemic.

In a December survey by AARP, 78% of older workers reported having seen or experienced age discrimination in the workplace. That's up from 61% in 2018, and it's the highest mark since AARP started surveying the issue in 2003.

"Age Discrimination Continues to Hold Older Workers Back," said the headline from AARP Research in May.

Part of the increase may stem from the pandemic hitting older Americans so hard. They're more vulnerable to serious illness and death, and it's only natural that employers would take steps to keep them safe.

The pandemic also coincided with a big push to bring more diversity and inclusion to the workplace, in part as a response to the murder of George Floyd by a Minneapolis police officer.

"They're having a very difficult time, and the older they are, the more difficult," Murphy said, adding that he was referring to clients, friends and acquaintances in North Texas only. "They put their résumés into the algorithm, and they don't get any interviews, calls or anything.

"Is it their age, race, gender? I can't tell you except to say they're not getting jobs," he said.

Sometimes the explanation is simpler. He recently met with two friends who have their own companies, and each wanted to hire 10 people immediately — but only if they were experienced in the right computer language.

"Those jobs exist and they're being posted online, but most older workers don't have the skill sets," Murphy said.

The vast majority are willing to learn, including 77% who expressed strong interest in computer and technology training, according to another AARP survey. That's promising, especially if employers continue to offer more flexibility in the workplace, as they did during the pandemic.

"In many ways, this could bode very well for older workers," said Catherine Collinson, CEO of the nonprofit Transamerica Institute and its Transamerica Center for Retirement Studies. "Some employers will have to get really aggressive in recruiting, and they may realize this is a segment of the workforce they've overlooked. It's a terrific untapped opportunity."

She urges employers to offer options so older workers don't walk away all at once, which usually occurs with retirement. A few companies have phased retirement plans that delay departures while reducing workload and pay. Others have part-time work or contracting assignments, helping soon-to-be retirees build up their nest eggs while keeping their institutional knowledge for longer.

"This can be a retention and recruiting tool in a very hot job market," Collinson said. "Companies should ask: 'Are we overlooking a really important hiring pool?' "

Few companies have formal programs, although more will consider individual requests, she said. But many workers won't bring up the subject.

Collinson cited one woman who approached her after a speaking event. She was an empty-nester and was willing to work holidays and weekends so employees with young families could have more time together. She thought that would be a great pitch.

Raising awareness might move the needle now, she said, because of the success of working from home. But Murphy, the North Dallas financial planner, is skeptical.

Many people retire earlier than planned because of corporate downsizing or health problems. And many clients working remotely are nervous about returning.