While many are looking for work, some older workers seize the opportunity for a fresh start

You’ve probably heard: Meghan McCain is leaving ABC’s “The View” after nearly four years. One of her reasons for quitting is that COVID-19 has “changed the world for all of us,” she told the Guardian. “It’s changed the way I look at my life, the way I live my life, the way I want my life to look.”

Few of us have the net worth or brand awareness of Meghan McCain, who is 36. Yet her sentiment resonates with many who have worked during the pandemic, often tethered to their computers at home.

Record numbers of workers are part of what has been called “The Big Quit” or “The Great Resignation” as economies emerge from the pandemic. As a recent Microsoft MSFT,
research even comes close to the goal, 41% of the global workforce planning to say goodbye to their employer and colleagues this year.

Many of the quitters are and will be in their 50s. Some for greener pastures at other employers or businesses they start; others for retirement.

The flood of email farewells and virtual farewell rallies in the US of late reflect workers’ confidence that the US economic recovery is strong enough that they are willing to take a risk and quit their jobs.

Demand for employees means options for some

Their timing is smart given the high demand for workers.

Companies are fighting for talent, and that’s the definition of a good market for anyone willing to voluntarily change jobs. In general, household finances also seem unusually supportive of job search funding. Economists estimate that Americans accumulated more than $2 trillion in savings during the pandemic, although they are quick to add that many are struggling.

Seasoned employees with retirement savings plans have been doing well lately, as markets have been strong and 401(k) contributions have remained relatively stable. Home prices also rose sharply in many places during the pandemic, and older Americans tend to be homeowners.

“In a world where workers don’t have a lot of power, the only bargaining chip they have is getting fired,” said Geoffrey Sanzenbacher, a research economist at Boston College’s Center for Retirement Research. And, he added, many older workers “have something they’ve wanted to do for a while” — which could be starting a business, pursuing a passion, or retiring.

There is something else going on.

Over the past two decades, the combination of stagnant wages and job insecurity has kept many people from quitting, while older workers have had the added worry of ageism.

See: These workers would quit their jobs, but worry about losing health care

The phenomenon of ‘life is short’ at work

But the social isolation that so many endured during the pandemic and the trauma following the murder of George Floyd by a former Minneapolis police officer forced many to rethink and rethink what they were doing with their lives and at work.

“With so many changes that have rocked people in the past year, employees are re-evaluating their priorities, home base, and their entire lives,” the Microsoft report said. “So whether it’s because of fewer networking or career opportunities, a new calling, pent-up demand, or a host of pandemic issues, more people are considering their next move.”

Among those considering their next move are Nancy Collamer’s clients. Collamer, a Pennsylvania-based retirement coach and popular Next Avenue contributor, has heard of people seeking help figuring out their next chapter.

A motivated longtime volunteer lost her husband (not to COVID-19) during the pandemic. The combination of his death and the coronavirus cloud have convinced the woman that life is fleeting and that things can change in the blink of an eye. She is now driven to find a more purposeful path with her volunteer work.

A financial services client of Collamer realized during the pandemic how much he enjoyed being with his family. He now dreads traveling for work and wants to change jobs, possibly a career switch.

“A common thread is that the pandemic gave them time to stop and think about what they wanted to do with their lives,” Collamer said.

Job changes and longer work life

Certainly, money is not an obstacle with its customers. Nevertheless, for anyone who is able to take the plunge, there is intriguing evidence that voluntary job changes among late-career workers extend their working lives.

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Take research from Sanzenbacher, Steven Sass and Christopher Gillis at the Center for Retirement Research. They examined voluntary job changes by workers aged 51 to 61 from 1992 to 2012, and followed them up to age 65. They found that a voluntary job change was associated with a 9.1% increase in the likelihood of remaining in the labor market until age 65.

The effect applied to different socio-economic groups. For those with at least some college, the increase was 10.9% and for those with high school or less, 7.5%.

“If you leave an employer for more pay or because you think it’s better, both are fine,” Sanzenbacher says.

The increase in risk taking, reflected in what is known as the ‘stop rate’, is also reflected in the number of new businesses.

John Haltiwanger, an economist at the University of Maryland, noted in a recent article that the pace of new business applications was its highest since mid-2020 (although the streak only dates back to 2004).

He adds that things are very different from the economic trauma many felt a decade ago when entrepreneurship declined during the 2007-09 recession.

The Kauffman Foundation, which studies entrepreneurship, also saw a sharp increase in startup activity in 2020. A majority of the new entrepreneurs, Kauffman says, were 45 and older.

Certainly, the pandemic has caused the number of new entrepreneurs who found it necessary to start a business just to pay their bills to reach its highest level in the past 25 years.

New businesses: for passions and to pay the bills

“Anyone who started a business as an opportunity, rather than a necessity, was lost to everyone,” said Robert Fairlie, an economist at the University of California, Santa Cruz.

Nevertheless, you don’t take the risk of starting a business unless you think there’s a chance to try it – a reasonable bet for midlife entrepreneurs these days.

“The data shows that older entrepreneurs have the resources and knowledge base to succeed,” said Susan Weinstock, vice president of financial resilience programming at AARP. “I think we’re going to see a lot more small businesses started by older workers.”

Despite several challenges, the US economy’s recovery is on track to become one of the strongest and fastest in history. If so, now is the time to think about making a late career shift or starting your own business.

As former Treasury Secretary Larry Summers once wrote, a good economy is when “companies are looking for workers instead of workers looking for jobs.” That is certainly the case today.

Collamer says it helps to think about two important questions when choosing your next path: “Who or what gives you energy? And who or what drains you?”

This is a good point in this column to stop and reflect on what’s going on in the U.S. job market and what experienced workers are dealing with.

As we emerge from the pandemic, the increase in voluntary layoffs and the embrace of second-life entrepreneurship is largely positive. However, other parts of the labor market are troubling.

More than half of job seekers aged 55 and over were long-term unemployed in June, meaning they had been looking for work for at least six months. The longer someone is unemployed, the harder it is to get another job — and that’s before ageism takes effect.

Uncertainty also swirls around the sharp rise in the number of retirees last year.

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According to Pew Research Center, 3.2 million more boomers retired in Q3 2020 compared to 2019, many of them not of their own free will. The COVID-19 economy has hit older workers with low and unstable incomes much harder than their high-earning peers.

“There are a lot of confounding factors in what’s going on here as the economy opens up and people go back to work,” Weinstock says.

Many questions about the condition of older workers will not be known for a year, if not longer. But for those who are able to reshape their lives, the economic recovery is an opportune time to seek the purpose they have discovered in solitude.

Chris Farrell is a senior economics officer for Marketplace at American Public Media. An award-winning journalist, he is an author
from “Goal and a Salary: Finding Meaning, Money and Happiness in the Second Half of Life” and “Non-retirement: How Baby Boomers Are Changing the Way We Think About Work, Community and the Good Life.

This article is reprinted with permission from NextAvenue.org© 2021 Twin Cities Public Television, Inc. All rights reserved.

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