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YOUR MONEY BRIEFING

Your Money Briefing is your personal-finance and career checklist, with the news
that affects your money and what you do with it. From spending and saving to
investing and taxes, the Wall Street Journal’s finance reporters and experts
break down complicated money questions every weekday to help you make better
decisions about managing your money. Hosted by J.R. Whalen.



FRIDAY, NOVEMBER 5, 2021

11/5/2021 3:00:00 AM
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IN THE 'GREAT RESIGNATION,' OLDER WORKERS LEAD THE WAY

The unexpected departure of many older Americans from the workforce during the
pandemic has further strained an already tight labor market. WSJ economics
reporter Amara Omeokwe joins host J.R. Whalen to discuss how employers are
adapting. Plus, retiree Kevin O'Connor discusses his decision to retire early.

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FULL TRANSCRIPT

This transcript was prepared by a transcription service. This version may not be
in its final form and may be updated.

J.R. Whalen: Here's Your Money Briefing for Friday, November 5th. I'm J.R.
Whalen for the Wall Street Journal. Have you heard of the Great Resignation?
That's the name given to the record number of people who voluntarily left their
jobs during the pandemic. Many have quit in search of better pay, but others
like older Americans with decades of experience saw an opportunity to move up
the retirement date. And that's thrown a wrench into the labor market.

Amara Omeokwe: In 2019 going into 2020 right before the pandemic, the economy
had actually been doing quite well. And what we actually saw was some older
Americans coming off the sidelines. They were kind of lured back into work. We
weren't expecting to see this pickup in retirements right as we headed into the
pandemic.

J.R. Whalen: Coming up, our economics reporter Amara Omeokwe will join us to
discuss how early retirement among older Americans is affecting the workforce.
And we'll hear from one Minneapolis area resident on why he decided to retire
early. That's after the break. We've seen the unemployment rate improve
dramatically since the height of the pandemic. Many workers have either returned
to their original jobs or found something new. But when it comes to older
Americans compared to their younger counterparts, far fewer of them have
returned to the workforce. WSJ economics reporter Amara Omeokwe wrote about how
that's affecting the jobs market. And she's here to talk about it. Amara, thank
you for being with us.

Amara Omeokwe: Thanks for having me.

J.R. Whalen: So Amara, data from the Federal Reserve shows that an additional
1.5 million people retired from February, 2020 to April of this year than would
have if the retirement trend we saw in 2019 had continued. I want to first talk
about what's driving that ramp up in retirement. What is it about returning to
work that's unappealing to so many older workers?

Amara Omeokwe: Well, the workers I talked to for this story and the economist
I've spoken with about this trend say that there are several reasons for what
we're seeing with retirements during the pandemic. So for some older workers, it
was the fear of coronavirus. As we know, older people are more at risk from
serious illness or death from COVID-19. And one of the workers I spoke with had
preexisting health conditions. And he said, "Look, I was just really afraid that
if I caught coronavirus, I could die from it." And so he retired from his job
and that triggered a lot of financial issues for him and his family. But for him
when he weighed the potential health risk, it just made more sense to retire.
Other older Americans I spoke with said the pandemic just changed their
priorities and their desires. I spoke to a woman who was a literacy coach for a
school system in South Carolina and she said she was just kind of tired, kind of
burnt over the pandemic. She didn't want to have to do her job during this
upcoming school year. And she kind of retired when she thought she might work
for another two years or so. And then we also saw during the pandemic the stock
market eventually performed really well. Other assets performed really well. And
so for some older Americans that just put them in a better financial position
and made them feel more comfortable with the idea of retiring.

J.R. Whalen: Now, aside from voluntarily retiring, are there other factors
keeping older people out of the workplace?

Amara Omeokwe: Well, one thing that I also heard in reporting this story is this
idea of age discrimination. So I talked to a man who early in the pandemic was
laid off from his job because his employer was cost cutting and he said he
didn't want to stop working. He really wanted to continue working. And he
submitted well over a hundred applications, he said to jobs in his field and he
couldn't land one. And he said one thing that he really sensed in his interviews
and his interactions with potential employers was that they just weren't really
interested in hiring someone of his age, and researchers at The New School,
which is a private university in New York, talk a lot about how age
discrimination can sometimes play a factor, particularly in some of these
industries that have a lot of job openings right now, for instance, the
hospitality industry or the restaurant industry. Those are industries that in a
lot of ways are physically demanding. And one researcher I talked to said
employers in those industries may assume that older workers would not be good at
that physically demanding work. And so they choose not to hire them.

J.R. Whalen: And then the flip side of not returning to work is making sure you
can live comfortably in retirement. How is that factoring into older workers'
decisions?

Amara Omeokwe: Well, some more affluent older Americans really saw the value of
their retirement portfolios and their investment portfolios do quite well during
the pandemic. You may remember that at the beginning of the pandemic, we saw the
stock market sharply decline, but then it went on to actually have a really good
year in 2020. So that of course boosted retirement portfolios for people who
have them. And I talked to one man for the story who, he saw his portfolio do
quite well during the pandemic. That wasn't the main driver of his decision to
retire, but it certainly made him feel more comfortable doing so.

J.R. Whalen: Now, one recent retiree is Minnesota resident, Kevin O'Connor. He
was CEO of a medical systems manufacturing company, and at age 58, he decided to
exit the workforce and he joins me now. Kevin, thanks very much for being here.

Kevin O'Connor: Thanks for having me today, J.R.

J.R. Whalen: So Kevin, retiring at 58 is a little earlier than most people think
about retiring. What made you decide to do that?

Kevin O'Connor: Well, three years ago I had a kidney transplant and made a full
recovery and have enjoyed great health. But then when the pandemic hit, I spent
a lot of time working from home and have two young grandchildren that my wife
was taking care of and kept hearing them having such a great time and spending a
lot of really memorable time together and realized I was going to miss out on
that once I got back to the routine of traveling and doing the normal things.
So, really made the decision to ... once I had an opportunity this summer, I
decided to retire and spend more time with my wife and grandkids and do some fun
things while we can.

J.R. Whalen: Now, in your own particular situation, did you feel comfortable
financially with making the decision to retire when you did?

Kevin O'Connor: I was comfortable financially. I had always thought that I may
want to consider retiring at 60. And so being 58 now and after going through a
year and a half with the pandemic of really working from home in my home office,
I just realized that the thought of getting up on a Monday morning and getting
to the airport for a 7:00 AM flight and going through the grind was not
appealing to me anymore. So I just decided that I'd had enough and decided it
was time to step back and enjoy things.

J.R. Whalen: Was there any sort of pushback against your decision to retire?

Kevin O'Connor: We actually were owned by a parent company that was a small-cap
public company that had a new CEO start two weeks before I retired. So they did
ask if I would stay and I appreciated the offer to stay and still continue to
talk with her and I'm doing some consulting, but really was at a point where I
was ready to not go to work on Monday mornings.

J.R. Whalen: So what would it take for you to consider returning to the
workforce in any capacity?

Kevin O'Connor: I think if I were to return in any capacity, it would really be
at a time when grandkids are a little bit older and probably are in school and
have their own activities. And really if I found something that I was really
passionate about, people that I really enjoyed working with and probably more in
a volunteer capacity than an employment capacity. I've spent a lot of time
listening to podcasts since I retired, spending a lot of time walking and
exercising, and really trying to look for things that keep me engaged in
retirement. And one of the things that I listen to were, somebody said
retirement is not really retirement per se. It just means you create your own
schedule. So you're not really working on somebody else's schedule, but you go
find what you want to do and can contribute to and do it on your schedule. So I
really think that it will continue to evolve and as opportunities to get
involved or to help out come along, I think that I will participate with my wife
and even to some extent with my grandkids as well.

J.R. Whalen: All right. That's Minnesota resident, Kevin O'Connor. Kevin, thanks
so much for being with us.

Kevin O'Connor: Thank you very much, J.R. I appreciate your time today.

J.R. Whalen: So Amara, this early retirement thing, we should know that this
isn't happening to all seniors evenly across the board. The retirement equity
lab at the new school says a higher share of workers without a college degree
retired before the traditional retirement age of 65 compared with those who had
a college education. And so Amara, what could the impact of that be?

Amara Omeokwe: Well, the researcher from the retirement equity lab that I spoke
with said one thing that this trend could mean is that those workers are now in
a more financially vulnerable position. So what he said is we assume that
workers with lower incomes, lower education have less of a buffer for
retirement, and so if they were forced to retire early or retire in an unplanned
way, they can now be facing more financial stresses from that happening.

J.R. Whalen: Now, I want to talk about the impact this trend is having on the
workforce. Is this putting employers in a tight spot and how are they reacting?

Amara Omeokwe: Well, it is putting employers in a tight spot. And one way we've
seen them respond is sort of raise wages to try and attract workers to try to be
more competitive and have a competitive advantage in this fierce competition
they're all engaging in for workers. At the same time though, we've seen
accelerated inflation. We've seen higher prices for many of the everyday items
that Americans are buying. And so this is a question for the economy, whether
we're going to be engaged in this spiral where we see inflation rise, then we
see wages rise. And because inflation is rising, employers need to raise wages
even more and whether we get into this cycle. So that's an open question for the
economy.

J.R. Whalen: All right. That's Wall Street Journal reporter, Amara Omeokwe.
Amara, thanks so much for being here.

Amara Omeokwe: Thank you.

J.R. Whalen: And that's Your Money Briefing, I'm J.R. Whalen for the Wall Street
Journal.

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HOSTED BY


J.R. WHALEN


HOST AND PRODUCER, WSJ PODCASTS, THE WALL STREET JOURNAL

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J.R. Whalen is host and producer of The Wall Street Journal’s Your Money
Briefing and Minute Briefing podcasts. He joined WSJ Podcasts in 2017 after
nearly a decade of producing news and business programming for the WSJ’s video
department. Before joining the WSJ, J.R. held positions at CBS News, CBS Sports,
HBO, the Associated Press and Who Wants to Be a Millionaire, where he was
responsible for assigning dollar values to the questions. He began his career at
WVIP-AM/FM in Mount Kisco, N.Y., as news and sports director. He is a graduate
of Syracuse University, and owns about 100 pairs of cufflinks.




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