MacroMonitor Market Trends Newsletter July 2019

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Employment Disruptions

Historically, job disruption has been an event that younger workers have been more likely than older workers to experience. Further, households with heads age 65 and older have been far more likely to experience retirement than an involuntary job separation. However, a 2018 Health and Retirement Study (HRS) from the Urban Institute "shows that slightly more than one-half of adults in their early 50s who are working full-time, full year with a long-term employer subsequently experienced an employer-related involuntary job separation." Because job loss affects so many households, financial-institutions' offers of planning, product selection, and advice should take this disruption into consideration.

Current MacroMonitor data show that in contrast to the historical picture, in today's employment market, all employees—regardless of age—are subject to the same degree of job disruption. A definition of job disruption uses recent-life-events data: a decrease of more than 25% in household income, the start of a new job after time off, a change from full-time to part-time employment, a job loss or layoff, and disability or inability to work (disabled people or people unable to work are not in the data before 2006).

Figure 1: Trend: Job Disruption By Age of Primary Household Head

Older workers often have more difficulty than their younger counterparts do in finding new employment after a job loss. When—and if—a displaced older worker finds a job, the pay is likely less than the pay of the job the older worker lost. In fact, according to HRS, only one in ten older workers who suffer an involuntary job loss ever earn as much after that loss.

The MacroMonitor provides fact-based information to better identify, profile, and understand households that may have recently experienced a job disruption. This knowledge may be used to create contingency plans for protection and recovery. For more information, please contact us.

Subscribers have access to this month's Segment SummaryHouseholds That Suffer an Employment Disruption—highlighting financial behaviors, balance-sheet metrics, and attitudes of households that have experienced a negative job-status change. Subscribers may also receive the underlying set of data for this Segment Summary upon request. For more information, contact CFD today.