Ranks of Older Workers Swell as Losses Shorten Retirement
By Kelly Evans
The Wall Street Journal
Friday, May 9, 2009
-- Jose Villareal once had a successful career as a franchising
executive with Pepsi Co. Now, at the age of 67, he can't
even get a job as a school custodian.
Mr. Villareal is among the growing numbers of retirement-age
Americans battered by financial losses who are trying to get
back into the work force -- or never left it.
Participation in the labor force by workers over age 65, which
has been creeping upward in recent years, hit 16.9% in April,
the highest for that month since 1971, the Labor Department said
Friday. Meanwhile, unemployment for workers in that age
group was up sharply in April from a year earlier, to 5.8% from
"We're just living day-to-day," Mr. Villareal said.
In an April survey, 22% of workers nationwide said they were
"not at all confident" that they will have enough savings for a
comfortable retirement, surpassing the number who are "very
confident" for the first time since the survey began in 1993,
according to the Employee Benefits Research Institute, based in
Washington, D.C. A fifth of those workers said they now
plan to work into their 70s. One in 10 doesn't plan to
Mr. Villareal's predicament is increasingly common in this
city, where a fifth of the 215,000 residents are 65 or older,
compared with one-in-eight nationwide.
economy has long thrived on retirees, tourists and second-home
buyers bringing their wealth to the city. Now, the massive
loss of wealth in the U.S. has left
the city vulnerable.
Luxury-car dealerships, restaurants and shops struggle for
customers. Nearly a third of prime office space is vacant.
Earlier this week, the swanky Copper Wynd resort, situated
between Scottsdale and neighboring Fountain Hills,
became the struggling economy's latest victim, closing its doors
after 10 years.
Scottsdale is part of the
metropolitan area, which lost 136,000 jobs in the year that
ended in March, tying
Detroit for the
largest percentage of jobs lost in the period at 7.1%, according
to the U.S. Labor Department. The Arizona Department of
Commerce projects that the metro area will shed another 6% of
its jobs by next year.
The Villareal family's money troubles started earlier this
decade, but have been exacerbated by the bad economy.
They lost much of their savings and cashed out their retirement
funds in 2000 after a string of pizza restaurants Mr. Villareal
opened in Mexico went
bust. He then turned to running a small consultancy, but
business dried up over the past year as the economy slowed.
Taking a big cut in pay, Mr. Villareal spent several months
working in the cafeteria of a local high school, his daughter's
alma mater, until a back injury ended that stint. Among
other efforts, he applied for a custodian position in the school
district, for which he was judged overqualified.
"I don't buy $200 shoes like I used to," said Mr. Villareal,
dressed in a white polo shirt bearing a EuroDisney logo, chino
shorts, loafers and ankle socks. "I'll wear these clothes
for another 11 years -- what do I care?"
Because Mr. Villareal can't get a job, his 62-year-old wife, who
had left the work force two decades earlier after the birth of
their daughter, started working at a discount retailer where she
earns $10 an hour.
Others her age haven't been as lucky. Unemployment among those
between the ages of 55 and 64 jumped to 6.3% in April, compared
with just 2.7% a year ago. Even those who are employed
have been battered by 401(k) losses, upending their plans for
A study by human-resources consulting firm Hewitt Associates
found that the typical 55-year-old worker will need to work for
two more years to replace 401(k) losses in 2008.
Meredith Schimmelman, 60, is among those who would like to
retire but can't afford to right now. Sitting in a
restaurant with her husband, Art, who is 67, she said with a
half-smile that while she enjoys her administrative job at a
mortgage company, "it would be nice if he had a job and I didn't
have to work."
The couple moved from
nearly six years ago and owe more on their home than it is
currently worth. Mr. Schimmelman borrowed against it to
finance business ventures that didn't work out. He also
moved much of the couple's retirement money a few years ago into
the precious metal palladium, which is closely tied to demand
from the auto industry and has lost more than half its value.
Mr. Schimmelman is looking for a job but hasn't had any luck.
"I've never felt so paranoid about the future as I do now," he
said. "If she lost her job, the bottom would really fall
out for us."
Write to Kelly Evans at