Chapter 3
Unemployment and displacement of older workers

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Unemployment

The financial insecurity experienced by people faced with unexpected and sudden unemployment is a stressful experience. About 4% of older workers indicated that they were not working but looking for work. Of these 220,000 plus older workers, forty-eight percent were women and fifty-two percent were men. Almost three quarters (74%) of these older workers indicated that they were willing to learn new skills in order to regain employment. However, only 27% of the same group indicated that they would be willing to move (relocate) in order to achieve the same outcome. Over sixty percent (60%) of these indicated that the largest barrier to moving was family ties or obligations; 36% indicated community attachment and friends as the largest barrier; while the third most important impediment identified were the costs associated with housing and moving (33%).¹

As for those unemployed and unable to work (46% female and 54% male), long term disability was almost always the cited reason (75%) with short-term illness or disability a distant second mention with fourteen percent. Sixty-nine percent (69%) of those unable to work agreed that they would go back to work if their health improved, but just over one in five (22%) indicated that there was nothing that could be done to get them back to the work.

Nevertheless, of the older workers who were unemployed, nearly half (48%) believed that their unemployment would not affect the timing of their retirement and they would still retire as planned. Twenty-seven percent (27%) believed they would retire sooner due to their unemployment, and 25% believed their retirement plans would be delayed.

Displacement

As indicated earlier, losing a job is typically a traumatic life event, with many Canadian families depending on a regular income for their own financial security. With prolonged unemployment, savings meant for retirement may be called upon immediately and unless replenished in short order may have negative consequences on future retirement income; thus increasing potential reliance on the public pension system. Losing a job due to a displacement such as a layoff, plant closure, a business downsizing or business bankruptcy can often be overwhelming. Not only is the individual job gone, but those similarly qualified individuals working at that same business are likewise gone and oftentime's younger colleagues are suddenly competing for the same scarce jobs. Over twelve percent (12%) of the older workers (657,000 Canadians) reported having lost a job due to displacement since the age of 50.² Fifty-seven percent (57%) of these were males and forty-three percent (43%) were females. Generally speaking, the bulk of these (59%) reported that their most recent displacements occurred between the ages of 50 and 54.

Chart 3.1 Reasons for displacement since age 50, Survey of Older Workers (SOW) 2008

Eighty-one percent (81%) of older workers who looked for work right after their displacement found employment (58% in less than six months). Similarly, the majority (63%) of all older workers displaced since the age of 50, regardless of whether they were looking for work, were working again in less than 6 months from the time of their displacement and nearly three-quarters (73%) found full time employment. Of those who did not look for work after their displacement, twenty-nine percent (29%) became self-employed and fourteen (14%) percent retired immediately following their displacement.

It is worth noting that the immediate experience following displacement may have changed by the time the survey was conducted. For instance, the worker may not have looked for work after displacement because they expected to be recalled or, they may have initially retired, and later re-entered the labour market, or, conversely, they may have found a job after their displacement, but since retired. Of those who had experienced a displacement after the age of 50, seventy-three percent (73%) were still working at the time of the survey (either at their old job or in a new one). A breakdown of the remaining 26% who were not working at the time of the survey shows that 17% were looking for work and the remaining 10% had withdrawn from the labour market (9% retired and 1% were no longer able to work). The largest obstacles to re-employment identified by older displaced workers were "no work available" (23%) followed by "wages too small" (21%) and "age barrier" (15%). Thirty-one percent (31%) of displaced older workers indicated that they perceived no barriers to finding a new job.

Of older workers who remained displaced due to layoff, over half (54%) did not expect to be recalled or knew the layoff was permanent. Of those who returned to work after their displacement, almost half reported earning significantly less (at least 25% less) than their previous position, 39% were re-employed at pretty much the same earning level and only 13% wound up earning considerably more (at least 25% more) than what their previous position had paid. Moreover, of those who found employment, over 91% were employed in a different company and 57% were employed doing a different type of work. However, most (93%) managed to find employment in the same community.

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Notes:

1. Totals exceed 100% since respondents were allowed to choose more than one reason why they are unwilling to relocate.
2. Displacement is defined as a job loss due to layoff, plant/business closure or downsizing