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G.M.’s Contract Deal With U.A.W. Faces Surprisingly Stiff Opposition

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Many longstanding General Motors workers have been voting against the tentative accord, which they feel insufficiently improves retirement benefits.A United Automobile Workers union vote on a tentative contract agreement with General Motors that provides record wage increases has run into unexpectedly strong resistance from veteran workers.Voting at most union locals has been completed and the final result, due as early as Thursday evening, will very likely be decided by a narrow margin. A majority of workers at several large plants in Michigan, Indiana and Tennessee rejected the contract, though union members at a large sport utility plant in Arlington, Texas, voted in favor of it.G.M., Ford Motor and Stellantis agreed to similar contracts with the union after U.A.W. members went on strike at select plants and warehouses. Workers walked off the job at the first three plants on Sept. 15 and stayed on strike for more than 40 days. It was the first time the union has struck all three automakers at the same time, though it did not shut down all of the factories of any company.The agreement appears to be headed for ratification at Ford and Stellantis, the maker of Chrysler, Jeep and Ram vehicles, by comfortable margins, according to running tallies the U.A.W. published online.At G.M., many veteran workers have opposed the contract because they want the company to contribute more money to retirement plans and the cost of health care for retirees.“I’ve heard from some traditional workers who said there wasn’t enough in there for them,” said David Green, director of the U.A.W. Region 2B, which includes Ohio, Indiana and a small part of Michigan. “The post-retirement health care is an issue for some people. For some people, it’s the pension contributions.”Mr. Green himself thinks the contract represents a big victory for union members. “This is the best contract I’ve seen since I started in 1989,” he said. “So I was happy with it.”General Motors declined to comment on the contract vote.The tentative contract raises the top wage by 25 percent, from $32 to more than $40 over four and a half years. The increase is more than the combined wage increases the union has won over the past 22 years, according to U.A.W. officials.Newer hires who are lower on the pay scale will see larger increases that take them to the new top wage. And workers who were recently hired will see their hourly pay double.The agreement also provides for cost-of-living adjustments that will nudge wages higher if inflation persists as well as enhanced company contributions to pensions and retirement plans, more paid time off and the ability to strike if any plant is closed during the term of the contract.The contract negotiations with G.M., Ford and Stellantis were led by the United Automobile Workers president, Shawn Fain, center, who was elected this year.Brittany Greeson for The New York TimesTo be ratified, the agreement must secure a simple majority. More than 46,000 U.A.W. workers work at G.M., although not all of them are likely to turn in ballots. More than 14,000 company employees took part in the targeted strikes.As of Wednesday afternoon, an online vote tally that the union maintains showed that just over 54 percent of the votes were in favor of the contract, but that tally did not include numbers from some big plants.If the tentative agreement is voted down, it would represent a big setback for the U.A.W. president, Shawn Fain, who was elected this year and promised to take a more aggressive approach in the contract talks in hopes of winning significant pay increases and reversing some of the concessions the union accepted in past contracts.He appeared to deliver that in what was widely regarded as a record deal. President Biden, who joined striking workers on the picket line in September at a G.M. site in Belleville, Mich., hailed Mr. Fain’s efforts. The president joined Mr. Fain last week at a plant in Belvidere, Ill., that Stellantis agreed to keep open after halting production this year.“I don’t think it diminishes Shawn Fain’s luster that much because of a close ratification vote,” said Arthur Wheaton, director of labor studies at Cornell University School of Industrial and Labor Relations. “It just means expectations were high, and had he not delivered as much as he did, it wouldn’t have passed.”After the contracts with the three Detroit automakers are ratified, Mr. Fain hopes to try to organize workers at nonunion plants in the South owned by Toyota, Honda and other foreign automakers, and the nonunion plants that Tesla operates in California and Texas.Since the terms of the U.A.W. agreements were announced, some of those companies have increased wages of factory workers. Toyota has told workers that it will raise hourly rates by 9 percent in January. Honda and Hyundai will lift wages 11 percent and 14 percent next year. Hyundai plans to increase wages 25 percent by 2028.“Everybody at those companies should say, ‘Thank you, U.A.W.,’” Mr. Wheaton said. “Those increases wouldn’t have happened without the new U.A.W. contract.” More

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    The Pandemic’s Job Market Myths

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    Remember the “she-cession”? What about the early-retirement wave, or America’s army of quiet quitters?For economists and other forecasters, the pandemic and postpandemic economy has been a lesson in humility. Time and again, predictions about ways in which the labor market had been permanently changed have proved temporary or even illusory.Women lost jobs early in the pandemic but have returned in record numbers, making the she-cession a short-lived phenomenon. Retirements spiked along with coronavirus deaths, but many older workers have come back to the job market. Even the person credited with provoking a national conversation by posting a TikTok video about doing the bare minimum at your job has suggested that “quiet quitting” may not be the way of the future — he’s into quitting out loud these days.That is not to say nothing has changed. In a historically strong labor market with very low unemployment, workers have a lot more power than is typical, so they are winning better wages and new perks. And a shift toward working from home for many white-collar jobs is still reshaping the economy in subtle but important ways.But the big takeaway from the pandemic recovery is simple: The U.S. labor market was not permanently worsened by the hit it suffered. It echoes the aftermath of the 2008 recession, when economists were similarly skeptical of the labor market’s ability to bounce back — and similarly proved wrong once the economy strengthened.“The profession has not fully digested the lessons of the recovery from the Great Recession,” said Adam Ozimek, the chief economist at the Economic Innovation Group, a research organization in Washington. One of those lessons, he said: “Don’t bet against the U.S. worker.”Here is a rundown of the labor market narratives that rose and fell over the course of the pandemic recovery.True but Over: The ‘She-cession’Women lost jobs heavily early in the pandemic, and people fretted that they would be left lastingly worse off in the labor market — but that has not proved to be the case.

    Note: Data is as of June 2023 and is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesIn the wake of the pandemic, employment has actually rebounded faster among women than among men — so much so that, as of June, the employment rate for women in their prime working years, commonly defined as 25 to 54, was the highest on record. (Employment among prime-age men is back to where it was before the pandemic, but is still shy of a record.)Gone: Early RetirementsAnother frequent narrative early in the pandemic: It would cause a wave of early retirements.Historically, when people lose jobs or leave them late in their working lives, they tend not to return to work — effectively retiring, whether or not they label it that way. So when millions of Americans in their 50s and 60s left the labor force early in the pandemic, many economists were skeptical that they would ever come back.

    Notes: Percentages compare June 2023 with the 2019 average. Data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesBut the early retirement wave never really materialized. Americans between ages 55 and 64 returned to work just as fast as their younger peers and are now employed at a higher rate than before the pandemic. Some may have been forced back to work by inflation; others had always planned to return and did so as soon as it felt safe.The retirement narrative wasn’t entirely wrong. Americans who are past traditional retirement age — 65 and older — still haven’t come back to work in large numbers. That is helping to depress the size of the overall labor force, especially because the number of Americans in their 60s and 70s is growing rapidly as more baby boomers hit their retirement years.Questionable: The White-Collar RecessionTechnology layoffs at big companies have prompted discussion of a white-collar recession, or one that primarily affects well-heeled technology and information-sector workers. While those firings have undoubtedly been painful for those who experienced them, it has not shown up prominently in overall employment data.

    Note: Data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesFor now, the nation’s high-skilled employees seem to be shuffling into new and different jobs pretty rapidly. Unemployment remains very low both for information and for professional and business services — hallmark white-collar industries that encompass much of the technology sector. And layoffs in tech have slowed recently.Nuanced: The Missing MenIt looked for a moment like young and middle-aged men — those between about 25 and 44 — were not coming back to the labor market the way other demographics had been. Over the past few months, though, they have finally been regaining their employment rates before the pandemic.That recovery came much later than for some other groups: For instance, 35-to-44-year-old men have yet to consistently hold on to employment rates that match their 2019 average, while last year women in that age group eclipsed their employment rate before the pandemic. But the recent progress suggests that even if men are taking longer to recover, they are slowly making gains.False (Again): The Labor Market Won’t Fully Bounce BackAll these narratives share a common thread: While some cautioned against drawing early conclusions, many labor market experts were skeptical that the job market would fully recover from the shock of the pandemic, at least in the short term. Instead, the rebound has been swift and broad, defying gloomy narratives.This isn’t the first time economists have made this mistake. It’s not even the first time this century. The crippling recession that ended in 2009 pushed millions of Americans out of the labor force, and many economists embraced so-called structural explanations for why they were slow to return. Maybe workers’ skills or professional networks had eroded during their long periods of unemployment. Maybe they were addicted to opioids, or drawing disability benefits, or trapped in parts of the country with few job opportunities.In the end, though, a much simpler explanation proved correct. People were slow to return to work because there weren’t enough jobs for them. As the economy healed and opportunities improved, employment rebounded among pretty much every demographic group.The rebound from the pandemic recession has played out much faster than the one that took place after the 2008 downturn, which was worsened by a global financial blowup and a housing market collapse that left long-lasting scars. But the basic lesson is the same. When jobs are plentiful, most people will go to work.“People want to adapt, and people want to work: Those things are generally true,” said Julia Coronado, the founder of MacroPolicy Perspectives, a research firm. She noted that the pool of available workers expanded further with time and amid solid immigration. “People are resilient. They figure things out.” More

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    Japan’s Business Owners Can’t Find Successors. This Man Is Giving His Away.

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    Hidekazu Yokoyama has spent three decades building a thriving logistics business on Japan’s snowy northern island of Hokkaido, an area that provides much of the country’s milk.Last year, he decided to give it all away.It was a radical solution for a problem that has become increasingly common in Japan, the world’s grayest society. As the country’s birthrate has plummeted and its population has grown older, the average age of business owners has risen to around 62. Nearly 60 percent of the country’s businesses report that they have no plan for what comes next.While Mr. Yokoyama, 73, felt too old to carry on much longer, quitting wasn’t an option: Too many farmers had come to depend on his company. “I definitely couldn’t abandon the business,” he said. But his children weren’t interested in running it. Neither were his employees. And few potential owners wanted to move to the remote, frozen north.So he placed a notice with a service that helps small-business owners in far-flung locales find someone to take over. The advertised sale price: zero yen.Mr. Yokoyama’s struggle symbolizes one of the most potentially devastating economic impacts of Japan’s aging society. It is inevitable that many small- and medium-size companies will go out of business as the population shrinks, but policymakers fear that the country could be hit by a surge in closures as aging owners retire en masse.In an apocalyptic 2019 presentation, Japan’s trade ministry projected that by 2025, around 630,000 profitable businesses could close up shop, costing the economy $165 billion and as many as 6.5 million jobs.Economic growth is already anemic, and the Japanese authorities have sprung into action in hopes of averting a catastrophe. Government offices have embarked on public relations campaigns to educate aging owners about options for continuing their businesses beyond their retirements and have set up service centers to help them find buyers. To sweeten the pot, the authorities have introduced large subsidies and tax breaks for new owners.Still, the challenges remain formidable. One of the biggest obstacles to finding a successor has been tradition, said Tsuneo Watanabe, a director of Nihon M&A Center, a company that specializes in finding buyers for valuable small- and medium-size enterprises. The company, founded in 1991, has become enormously lucrative, recording $359 million in revenue last year.Mr. Yokoyama plans to give away his land and equipment to a successor he has chosen.Noriko Hayashi for The New York TimesOne of Mr. Yokoyama’s workers.Noriko Hayashi for The New York TimesBut building that business has been a long process. In years past, small-business owners, particularly those who ran the country’s many decades- or even centuries-old companies, assumed that their children or a trusted employee would take over. They had no interest in selling their life’s work to a stranger, much less a competitor.More on Social Security and RetirementEarning Income After Retiring: Collecting Social Security while working can get complicated. Here are some key things to remember.An Uptick in Elder Poverty: Older Americans didn’t fare as well through the pandemic. But longer-term trends aren’t moving in their favor, either.Medicare Costs: Low-income Americans on Medicare can get assistance paying their premiums and other expenses. This is how to apply.Claiming Social Security: Looking to make the most of this benefit? These online tools can help you figure out your income needs and when to file.Mergers and acquisitions “weren’t well regarded. A lot of people felt that it was better to shut the company down than sell it,” Mr. Watanabe said. Perceptions of the industry have improved over the years, but there are “still many businesspeople who aren’t even aware that M&A is an option,” he added.While the market has found buyers for the businesses most ripe for the picking, it can seem nearly impossible for many small but economically vital companies to find someone to take over.In 2021, government help centers and the top five merger-and-acquisitions services found buyers for only 2,413 businesses, according to Japan’s trade ministry. Another 44,000 were abandoned. Over 55 percent of those were still profitable when they closed.Many of those businesses were in small towns and cities, where the succession problem is a potentially existential threat. The collapse of a business, whether a major local employer or a village’s only grocery store, can make it even harder for those places to survive the constant attrition of aging populations and urban flight that is hollowing out the countryside.After a government-run matching program failed to find someone to take over for Mr. Yokoyama, a bank suggested that he turn to Relay, a company based in Kyushu, Japan’s southernmost main island.Hay stored in a warehouse on the Yokoyama land.Noriko Hayashi for The New York TimesAn abandoned cowshed.Noriko Hayashi for The New York TimesRelay has differentiated itself by appealing to potential buyers’ sense of community and purpose. Its listings, featuring beaming proprietors in front of sushi shops and bucolic fields, are engineered to appeal to harried urbanites dreaming of a different lifestyle.The company’s task in Mr. Yokoyama’s case wasn’t easy. For most Japanese, the town where his business is situated, Monbetsu, which has around 20,000 people and is shrinking, might as well be the North Pole. The only industries are fishing and farming, and they largely go into hibernation as the days grow short and snow piles up to roof eaves. In deep winter, some tourists come to eat salmon roe and scallops and see the ice floes that lock in the city’s modest port.A street full of 1980s-era cabarets and restaurants is a snapshot of a more prosperous time when young fishermen gathered to let off steam and spend big paychecks. Today, faded posters peel off abandoned storefronts. The town’s biggest building is a new hospital.In 2001, Monbetsu constructed a new elementary school building just around the corner from Mr. Yokoyama’s company. It closed after just 10 years.In times past, the classrooms would have been filled with the grandchildren of local dairy farmers. But their own children have now mostly moved to cities in search of higher-paying, less onerous work.With no obvious successors, the farms have folded one after another. Decades-high inflation brought on by the pandemic and Russia’s war in Ukraine has pushed dozens of holdouts into early retirement.Mr. Yokoyama’s employees are skeptical about his succession plan.Noriko Hayashi for The New York TimesThe workers are mostly in their 50s and 60s.Noriko Hayashi for The New York TimesAs local farmers have aged and their profits thinned, more of them have come to depend on Mr. Yokoyama for tasks like harvesting hay and clearing snow. His days start at 4 a.m. and end at 7 in the evening. He sleeps in a small room behind his office.It would be “extremely difficult” if his business folded, said Isao Ikeno, the manager of a nearby dairy cooperative that has turned heavily to automation as workers have become harder to find.On the cooperative’s farm, 17 employees tend to 3,000 head of cattle, and Mr. Yokoyama’s company fills in the gaps. No other area businesses can provide the services, Mr. Ikeno said.Mr. Yokoyama began contemplating retirement about six years ago. But it wasn’t clear what would happen to the business.While he had taken on a little over half a million dollars in debt, years of generous economic stimulus policies have kept interest rates at rock bottom, easing the burden, and the company’s annual profit margin was around 30 percent.The ad he placed on Relay acknowledged that the job was hard, but it said that no experience was needed. The best candidate would be “young and ready to work.”Whoever was chosen would take over the debts, but also inherit all of the business’s equipment and nearly 150 acres of prime farmland and forest. Mr. Yokoyama’s children will get nothing.“I told them that if you want to take it over, I’d leave it to you, but if you don’t want to do it, I’m giving it all to the next guy,” he said.Thirty inquiries poured in. Among those who expressed interest were a couple and a representative of a company that planned to expand. Mr. Yokoyama settled on a dark horse, 26-year-old Kai Fujisawa.A friend had showed Mr. Fujisawa the ad on Relay, and Mr. Fujisawa immediately jumped in a car and showed up on Mr. Yokoyama’s doorstep, impressing him with his youth and enthusiasm.Kai Fujisawa, Mr. Yokoyama’s potential successor.Noriko Hayashi for The New York TimesStill, the transition hasn’t been smooth. Mr. Yokoyama is not entirely convinced that Mr. Fujisawa is the right person for the job. The learning curve is steeper than either of them had imagined, and Mr. Yokoyama’s grizzled, chain-smoking employees are skeptical that Mr. Fujisawa will be able to live up to the boss’s reputation.Most of the company’s 17 employees are in their 50s and 60s, and it’s not clear where Mr. Fujisawa will find people to replace them as they retire.“There’s a lot of pressure,” Mr. Fujisawa said. But “when I came here, I was prepared to do this for the rest of my life.” More

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    Retirees Are One Reason the Fed Has Given Up on a Big Worker Rebound

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    Workers are in short supply three years into the pandemic job market rebound, and officials increasingly think they aren’t coming back.Alice Lieberman had planned to work for a few more years as a schoolteacher before the pandemic hit, but the transition to hybrid instruction did not come easily for her. She retired in summer 2021.Her husband, Howard Lieberman, started to wind down his consulting business around the same time. If Mrs. Lieberman was done working, Mr. Lieberman wanted to be free, too, so that the pair could take camping trips and volunteer.The Liebermans, both 69, are one example of a trend that is quietly reworking the fabric of the American labor force. A wave of baby boomers has recently aged past 65. Unlike older Americans who, in the decade after the Great Recession, delayed their retirements to earn a little bit of extra money and patch up tenuous finances, many today are leaving the job market and staying out.That has big implications for the economy, because it is contributing to a labor shortage that policymakers worry is keeping wages and inflation stubbornly elevated. That could force the Federal Reserve to raise rates more than it otherwise would, risking a recession.About 3.5 million people are missing from the labor force, compared with what one might have expected based on pre-2020 trends, Jerome H. Powell, the Fed chair, said during a speech last month. Pandemic deaths and slower immigration explain some of that decline, but a large number of the missing workers, roughly two million, have simply retired.And increasingly, policymakers at the central bank and economic experts do not expect those retirees to ever go back to work.“My optimism has waned,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution. “We’re now talking about people who have reorganized their lives around not working.”Millions of Americans left or lost jobs in the early months of the coronavirus pandemic as businesses laid off employees, schools closed and workers stayed home. Child care disruptions, Covid-induced disability and other lingering effects of the pandemic have kept some people on the sidelines. But for the most part, workers went back quickly once vaccines became available and businesses reopened.Slow to ReturnAmericans of most ages are working or looking for work at close to their prepandemic rate. But many older people have remained on the sidelines.

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    Change in labor force participation rate since Feb. 2020
    Note: Data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesOlder workers were the exception. Among Americans ages 18 to 64, the labor force participation rate — the share of people working or actively looking for work — has largely rebounded to early 2020 levels. Among those 65 and up, on the other hand, participation lags well below its prepandemic level, the equivalent of a decline of about 900,000 people. That has helped to keep overall participation steadily lower than it was in 2020.“Despite very high wages and an incredibly tight labor market, we don’t see participation moving up, which is contrary to what we thought,” Mr. Powell from the Fed said during his final news conference of 2022, adding: “Part of it is just accelerated retirements.”More on Social Security and RetirementEarning Income After Retiring: Collecting Social Security while working can get complicated. Here are some key things to remember.An Uptick in Elder Poverty: Older Americans didn’t fare as well through the pandemic. But longer-term trends aren’t moving in their favor, either.Medicare Costs: Low-income Americans on Medicare can get assistance paying their premiums and other expenses. This is how to apply.Claiming Social Security: Looking to make the most of this benefit? These online tools can help you figure out your income needs and when to file.As would-be employees stay out of work, the resulting labor shortages have reverberated through the economy. Consumers are still shopping, and understaffed firms are eager to produce the goods and services they demand. As they scramble to hire — there are 1.7 job openings for every jobless person in America — they have been raising wages at the fastest pace in decades.With pay climbing so swiftly, Fed officials worry that they will struggle to bring inflation fully under control. Wages were not a major initial driver of inflation but could keep it high: Businesses facing heftier labor bills may try to pass those costs along to their customers in the form of higher prices.That risk is why the Fed is focused on bringing the labor market back into balance, and it is what makes the wave of retirees particularly bad news.If America’s missing workers were just temporarily sidelined, waiting to spring back into jobs given enough opportunity and a safe public health backdrop, nagging labor shortages might fade on their own. But if many of the workers are permanently retired — as policymakers increasingly believe is the case — bringing a hot labor market back into balance will require the Fed to push harder.It can do that by raising rates to slow consumer spending and business expansions, tempering the economy and slowing hiring. But the process is sure to be painful and could even spur a recession.Having fewer workers available “lowers the landing pad that the Fed has to lower the economy onto,” Ms. Edelberg said. “Because of what’s happened in the labor force, they just have to soften growth even more.”The Fed has learned the hard way that it can be a mistake to declare too confidently that a wave of workers is gone for good. In the years after the 2008 recession, policymakers began to conclude that the economy would soon run low on fresh labor supply.They were wrong. Baby boomers, the huge generation of people born between 1946 and 1964, continued working later in life than previous generations had, providing an unexpected source of workers. Their importance is hard to overstate: The U.S. labor force grew by 9.9 million people between the end of the Great Recession and the start of the pandemic. Nearly 98 percent of that growth — 9.7 million people — came from workers 55 and older.Unfortunately, there are reasons to doubt that retirees will serve as a surprise source of job market fuel this time. Boomers were in their 50s and early 60s when the economy began to emerge from the Great Recession. Many weren’t yet ready to retire; others were just about to when the 2008 recession hit, eroding their savings.Many decided to delay retirements as the labor market strengthened in the 2010s: They were relatively young, and they often needed the cash.Getting OlderWhen the Great Recession ended in 2009, most baby boomers still had at least a few years left in their careers. Today, most are well into retirement age, and the rest are getting close.

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    U.S. Population by Age, 2009

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    U.S. Population by Age, 2021
    Source: Census BureauBy The New York TimesBut key parts of that story have since shifted. The generation has aged, with older boomers now in their 70s and well over half in what would traditionally be considered their retirement years.That makes a difference. More than six in 10 people between the ages of 55 and 64 work or look for jobs, but nudge up the age scale even a little and that propensity to work drops drastically. Three in 10 people between the ages of 65 and 69 participate. Between 70 and 74, it is more like two in 10.In short, the demographic decks were always stacked for boomers to leave the labor market soon — but the pandemic seems to have nudged people who might otherwise have labored through a few more years over the cusp and into retirement.“It’s really coming from aging,” Aysegul Sahin, an economist at the University of Texas Austin, said of the decline in participation, which she has studied. “It was baked in the cake after the baby boom that followed World War II.”People over 65 do not work much for a variety of reasons. Some want to enjoy their retirements. Others want or even need to work but cannot because of poor health. In the wake of the pandemic, seniors may also be particularly alert to the risk of virus exposure at work, given how much more deadly the coronavirus is for older people.“It could be that the oldest workers are more fearful of Covid,” said Courtney Coile, an economist at Wellesley College. “Only time is going to tell whether the working-longer trend is really going to continue.”Still other seniors may be opting out of work for a more pleasant reason: Many are in decent financial shape, unlike after the 2008 downturn. Families amassed savings during the pandemic thanks to both government stimulus payments and price gains in financial assets.It took until late 2010 for people between the ages of 55 and 69 to recover to their late-2007 wealth levels, according to Fed data. This time, an early-2020 hit had been fully recovered by June 2020. Financial wealth for that age group now stands about 20 percent above where it was headed into the pandemic, despite a recent market swoon.And while inflation is eroding spending power, Social Security payments are price-adjusted, which takes some of the sting away.The Liebermans in Pennsylvania, for instance, could go back to work part time if they needed to — but they do not expect to need to.“Unless inflation went really ballistic, I think we’d be OK,” Mr. Lieberman said.To be sure, while retirements could help keep workers in short supply across America, other factors could bolster the work force. Immigration, for instance, is rebounding.And some data paint a more optimistic picture of the labor force: Monthly payroll figures from the Labor Department, which are based on a survey that’s separate from the demographic statistics, show that companies have continued to add jobs rapidly despite their complaints about a worker shortage.“Listening to Jerome Powell talk about labor supply, he seems resigned to the idea that there’s nothing left,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. “There are more workers out there who can get hired and want to get hired.”But central bankers have to make best guesses about what will come next, and, so far, they have determined that an increase in labor supply big enough to cool down the hot labor market is unlikely.“For the near term, a moderation of labor demand growth will be required to restore balance to the labor market,” Mr. Powell said last month. More

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    ‘I Had to Go Back’: Over 55, and Not Retired After All

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    After leaving the labor force in unusual numbers early in the pandemic, Americans approaching retirement age are back on the job at previous levels.When Kim Williams and millions of other older Americans lost their jobs early in the coronavirus pandemic, economists wondered how many would ever work again — and how that loss would weigh on the economy for years to come.Ms. Williams, now 62, wondered, too, especially when she struggled for months to find work. But in January, she started a new job at an AAA office near her home in Waterbury, Conn.“I’m too young to retire, so I had to go back,” she said.Whether by choice or financial necessity, millions of older Americans have made the same move in recent months. Nearly 64 percent of adults between the ages of 55 and 64 were working in April, essentially the same rate as in February 2020. That’s a more complete recovery than among most younger age groups.

    The rapid rebound has surprised many economists, who thought that fear of the virus — which is far deadlier for older people — would contribute to a wave of early retirements, especially because many people’s savings had been fattened by years of market gains. But there is increasing evidence that the early-retirement narrative was overblown.“The bottom line is that older workers have gone back to work,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. For many people, retiring early was never an option. Ms. Williams spent more than 25 years in manufacturing, working for a Hershey’s plant making Almond Joy and Mounds bars. The job paid reasonably well, and offered a retirement plan and other benefits. But in 2007, Hershey’s closed the factory, moving production partly to Mexico.The State of Jobs in the United StatesThe U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.April Jobs Report: U.S. employers added 428,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fourth month of 2022.Trends: New government data showed record numbers of job openings and “quits” — a measurement of the amount of workers voluntarily leaving jobs — in March.Job Market and Stocks: This year’s decline in stock prices follows a historical pattern: Hot labor markets and stocks often don’t mix well.Unionization Efforts: Since the Great Recession, the college-educated have taken more frontline jobs at companies like Starbucks and Amazon. Now, they’re helping to unionize them.Ms. Williams, then in her 40s, went back to school, earning an associate degree in hospitality and eventually finding a job as a supervisor at a local hotel. But the position paid significantly less than her factory job, and she drew down her retirement savings to cover medical expenses and other bills. When she was laid off again in June 2020, just a few weeks after her 60th birthday, Ms. Williams had little in savings.Ms. Williams tried to change careers again, this time going back to school to train as a medical secretary. But she has been unable to find work in her new field. In January, with her savings gone, she took a job at AAA for $16.50 an hour, $2 an hour less than she earned at the factory in 2007, before accounting for inflation. She says she will have to work at least until she can start drawing her full Social Security benefits at age 67.“If I could’ve left at 62, I would’ve left at 62, but I can’t,” she said. “Not all of us made that money where I could move down to Florida and get a $400,000 house.”The fastest inflation in decades has added to the pressure on people of all ages to return to work. More recently, so has the turmoil in financial markets, which has taken a bite out of retirement savings.But even some people who could retire are choosing to return to work as the pandemic ebbs.When the Long Island fitness studio where she worked as a spinning instructor shut down early in the pandemic, Jackie Anscher lost both a job and a part of her identity. In an interview with The New York Times that summer, she described what seemed at the time like an abrupt end to her career as “a forced retirement.”But after spending the beginning of the pandemic reorganizing her life and re-evaluating her priorities, Ms. Anscher, 60, has begun teaching spin classes again as a substitute instructor at a local gym, and she is looking for a more regular gig. Her husband is already retired — “he’s been waiting for me to go fishing,” she said — and the couple could afford for her to stop working. But she isn’t ready to hang up her cycling shoes.“I liked what I had. I loved who I was in front of the room,” she said. “It’s about my mental health. For me, it’s about preserving me.”Older workers weren’t any more likely than younger workers to leave the labor force early in the pandemic. But economists had reason to think they might be slower to return. Unemployed workers in their 50s and 60s typically have a harder time finding jobs than their younger counterparts, because of ageism and other factors. And unlike after the 2008-9 recession, when depressed housing prices and high debt levels left many people with little choice but to keep working, in this crisis prices of both homes and financial assets kept rising, providing a financial cushion to some people nearing retirement age.The share of Americans reporting that they were retired did rise sharply in the spring of 2020. But retirement is not an irreversible decision. And research from the Federal Reserve Bank of Kansas City has found that at the pandemic’s onset, there was a steep drop in the number of people leaving retirement to return to work, attributable at least partly to fear of the virus and a lack of job opportunities, swelling the ranks of the retired.As the economy has reopened and the public health situation has improved, these “unretirements” have rebounded and have recently returned roughly to their prepandemic rate, according to an analysis of government data by Nick Bunker of the Indeed Hiring Lab.

    The return of older workers has been concentrated among those in their late 50s and early 60s, people who were still several years or more away from retirement when the pandemic began. The employment rate among those 65 and older fell more sharply and has been much slower to recover. That suggests that the pandemic might have led some people who were already closer to retirement to accelerate those plans, and that the greater health risks they faced may have made them less likely to return to work while the virus continues to circulate. Still, the return of early retirees to the labor force is a reminder that rising wages and abundant job opportunities can draw in workers who might otherwise remain on the sidelines, Mr. Bunker said. The labor force shrank during the last recession, too, and some economists were quick to declare that workers were gone for good. But many people eventually came back during the strong job market that preceded the pandemic: It provided opportunities to people with disabilities and criminal records, to people with little formal education and to people who had taken time away from work to raise children or to care for ailing parents.That pattern may be repeating itself, but on a much more compressed timeline.“Don’t underestimate labor supply,” Mr. Bunker said. “Don’t count out the possibility that people want and need work. It has happened much more quickly than what we saw after the global financial crisis, but the broad principle is the same.”When Tad Greener lost his job managing utilities for a Utah university in late 2019, he wasn’t worried at first about finding a new one — the unemployment rate, after all, was near a 50-year low. But Mr. Greener had hardly begun his search when the pandemic hit and the bottom fell out of the economy. Suddenly, he was 60 years old, unemployed and facing the worst labor market in nearly a century.Mr. Greener eased up on his job search during the first phase of the pandemic, in part because of some health issues unrelated to the coronavirus. By spring of 2021, he was ready to work again, but he had little luck applying for jobs. He thinks many prospective employers were turned off by the combination of his age and his time out of the work force.“It’s a daunting task to be 62 years old, to be unemployed for over a year and to try and find work,” Mr. Greener said. “There were times where I didn’t think I was ever going to be able to go back to work.”As the economy reopened, however, many businesses struggled to hire enough workers to meet the surge in demand. That prompted employers to consider candidates they might otherwise have dismissed, or to look for ways to attract people who could work but weren’t looking.In Mr. Greener’s case, he learned about a new “returnship” program from the State of Utah that was meant to help people who had been out of the labor force get back to work. Last fall, he was accepted into the program, landing a part-time job in the state Office of Energy Development, which quickly turned into a permanent, full-time job. Now that he is back at work, Mr. Greener says he plans to stay until he is 67, or perhaps longer if he stays healthy.“Every day I hear about how there aren’t enough workers available,” Mr. Greener said. “There are a lot of older workers that are being written off, or at least finding it much more difficult to get back into the workplace, who have a lot of years and things to offer.” More

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    Kaplan and Rosengren, Fed Presidents Under Fire for Trades, Will Step Down

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    Robert S. Kaplan will exit his role as head of the Federal Reserve Bank of Dallas next month. Eric S. Rosengren, the head of the Federal Reserve Bank of Boston, is also retiring earlier than planned.Eric S. RosengrenSteven Senne/Associated PressRobert S. KaplanAnn Saphir/ReutersTwo Federal Reserve officials embroiled in controversy for trading securities that could have benefited from the central bank’s 2020 intervention in financial markets announced on Monday that they would leave their positions.Robert S. Kaplan, who heads the Federal Reserve Bank of Dallas, will retire on Oct. 8, according to a statement released Monday afternoon. Mr. Kaplan’s statement acknowledged the controversy as the reason for his departure. Eric S. Rosengren, the president of the Boston Fed, will retire this Thursday, accelerating his planned retirement by nine months. Mr. Rosengren cited health reasons for his early departure.The resignations followed the Fed’s announcement this month that Chair Jerome H. Powell had ordered a review of the central bank’s ethics rules in light of the concern surrounding the trades. When asked about his confidence in Mr. Kaplan and Mr. Rosengren during a news conference last week, Mr. Powell expressed displeasure with what had happened.“No one on the F.O.M.C. is happy to be in this situation, to be having these questions raised,” Mr. Powell said, referring to the policy-setting Federal Open Market Committee. He added, “This is an important moment for the Fed and I’m determined that we will rise to the moment.”Mr. Kaplan noted in his statement that it was his decision to leave the Fed, and that “the recent focus on my financial disclosure risks becoming a distraction” to the central bank’s economic work.Mr. Kaplan drew scrutiny for buying and selling millions of dollars in individual stocks, among other investments, last year — trading first reported on by The Wall Street Journal on Sept. 7. He has maintained that his trades were consistent with Fed ethics rules.Mr. Rosengren announced on Monday morning that he was retiring earlier than planned to try to prevent a kidney condition from worsening, in the hopes of staving off dialysis. The Boston Fed president came under criticism because he held stakes in real estate investment trusts, which invest in and sometimes manage properties, and listed purchases and sales in those in 2020. He spent last year warning publicly about risks in the commercial real estate market, and was helping to set Fed policy on mortgage-backed security purchases, which can help the housing market by improving financing conditions.Both presidents had previously announced that they would convert their financial holdings into broad-based indexes and cash by Sept. 30.Mr. Powell offered statements of support for both of the retiring officials in the news releases announcing their exit.But the controversy has pushed him into a delicate position. His own term as Fed chair expires early next year, and the White House is actively considering whether to reappoint him. A scandal at his central bank is sure to draw questions from senators when he testifies this week, and could even hurt his reappointment chances.As chair, Mr. Powell has also focused on shoring up public support in the central bank and explaining its role. He holds frequent news conferences, aims to speak in simpler language, and championed a series of “Fed Listens” events where top central bank officials meet and hear from community members whom they might not otherwise interact with — from community college students to local food pantry staff.The 2020 trading disclosures, which are shaping up to be the most headline-grabbing scandal the central bank has faced in years, risk chipping away at the widespread trust he has been working to build.Responses to Mr. Kaplan and Mr. Rosengren’s trading disclosures have been swift, and scathing. The group Better Markets had been calling for the Fed to fire both presidents if they did not resign. Other progressive groups had called for at least one of them to be ousted, and ethics watchdogs have said that the rules that had enabled their trades needed to be revisited.After the resignation announcements on Monday, Wall Street promptly began to assess what the departures would mean for monetary policy. Both officials have tended to worry about financial stability, and for that reason were likely to favor removing monetary policy support sooner than some of their colleagues — a stance often referred to as being hawkish.“Their exit will take out two of the nine more hawkish Fed officials who saw a 2022 rate hike as of the September F.O.M.C. meeting last week and remove important voices on financial stability issues in particular,” Krishna Guha at Evercore ISI wrote in a note to clients shortly after the announcement.Mr. Rosengren has been president of the Boston Fed since 2007, and his retirement was previously planned for June. The Fed’s 12 regional members rotate in and out of voting seats, and Mr. Rosengren would have had a vote on monetary policy next year. Mr. Kaplan would have voted in 2023.Kenneth C. Montgomery, the Boston Fed’s first vice president, will serve as interim president at that bank. The Boston Fed’s board members — excluding bank representatives — will need to select a permanent pick for president, subject to approval from the Fed’s Board of Governors in Washington.A longtime Fed employee who worked in research and bank supervision before becoming president, Mr. Rosengren played a key role in the 2020 crisis response. His regional Fed ran both the money market mutual fund and Main Street lending backstop programs that the Fed rolled out last year.The Boston Fed noted in the release that Mr. Rosengren hoped that his health condition would improve, and that he would be able to “explore areas of professional interest” in the future.Mr. Kaplan has been at the head of the Dallas Fed since late 2015, before which he taught at Harvard University and had a long career at Goldman Sachs. Meredith Black, that bank’s first vice president who had planned to retire, will serve as interim president until a successor is named, the Dallas Fed said. More

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    Americans Are Retiring Earlier Because of Pandemic

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    After years in which Americans worked later in life, the latest economic disruption has driven many out of the work force prematurely.Dee Dee Patten, 57, hadn’t planned to retire early. But when the coronavirus-induced lockdown took hold in 2020 and business dried up at the mechanical repair shop that she and her husband, Dana, owned in Platteville, Colo., they decided to call it quits.Mildred Vega, 56, had even less choice in the matter. Soon after she lost her job because of a restructuring at a Pfizer office in Vega Baja, P.R., the pandemic foreclosed other options.Mrs. Vega and the Pattens are three of the millions of Americans who have decided to retire since the pandemic began, part of a surge in early exits from the work force. The trend has broad implications for the labor market and is a sign of how the pandemic has transformed the economic landscape.For a fortunate few, the decision was made possible by 401(k) accounts bulging from record stock values. That wealth, along with a surge in home values, has offered some the financial security to stop working well before Social Security and private pensions kick in.But most of the early retirements are occurring among lower-income workers who were displaced by the pandemic and see little route back into the job market, according to Teresa Ghilarducci, a professor of economics and policy analysis at the New School for Social Research in New York City.“They might call themselves retired, but basically they are unemployed and in a precarious state,” Ms. Ghilarducci said. Economic downturns typically induce more people to leave the work force, but there has been a faster wave of departures this time than during the 2008-9 recession, she said.After analyzing data from the Bureau of Labor Statistics and the University of Michigan Health and Retirement Study, Ms. Ghilarducci found that among people with incomes at or below the national median, 55 percent of retirements recently were involuntary.By contrast, among the top 10 percent of earners, only 10 percent of exits were involuntary. “It’s a tale of two retirements,” Ms. Ghilarducci said.For the Pattens, most of their company’s revenue came from inspecting school buses in the northern part of Colorado. When schools pivoted to remote learning in March 2020, the business stopped receiving its usual traffic.“On average, we had 10 to 20 buses a day that we brought in and inspected and then put them out on the road for the kids,” Mrs. Patten said. “When spring break hit, we didn’t see another bus.”When schools reopened, they had trouble finding a mechanic. In July, they managed to hire one, but he left almost immediately. And the work was too physically demanding for the couple to carry on by themselves, Mrs. Patten said.They sold their shop and equipment, along with their house, putting some of the money into a retirement account. When a separate certificate of deposit account matures, they plan to buy a home in Denver. Since Mr. Patten is 62, he applied for Social Security — but his monthly benefits will be far lower than what he would have received if he had waited a few more years.Mrs. Patten with a photo of her old home and business. When schools pivoted to remote learning, the Pattens’ business of inspecting school buses stopped.Matthew Staver for The New York TimesThe shift toward early retirement reverses a long-running trend. The share of Americans over 65 still active in the work force is 50 percent higher than it was 20 years ago. Some are working longer because they have to and can’t afford to retire, while others are living longer and in better health and want to keep going into the office.Early retirements not only reflect the pandemic’s economic impact but may also hold back the recovery, because retired workers tend to spend more cautiously. They will also be drawing on Social Security sooner rather than paying into the program and bolstering its long-term viability.“Older generations tend to earn more and lift spending,” said Gregory Daco, chief U.S. economist at Oxford Economics. With this group out of the labor force in greater numbers, “it’s more of a negative than a positive for the economy.”In the 15 months since the pandemic began, about 2.5 million Americans have retired, Mr. Daco said. That’s about twice the number who retired in 2019, which means there are essentially 1.2 million fewer people in the work force over the age of 55 than would otherwise be expected.The abrupt increase in retirements — as reflected in the way people describe their work status in monthly government surveys — has also fallen unequally among groups of different educational and ethnic backgrounds.A November 2020 study by the Pew Research Center found that the share of Americans born between 1946 and 1964 with just a high school diploma who are retired rose two percentage points from the prior February, double the proportion among those with a college degree.What’s more, the share of the Hispanic population in this age group who are retired jumped four percentage points, compared to one percentage point increases for white and Black boomers.Hispanic workers, especially Hispanic women, were hit disproportionately hard by the downturn in leisure and hospitality employment, said Richard Fry, a senior researcher at the Pew Research Center.In terms of older workers over all, “it’s anyone’s guess whether they will return,” Mr. Fry said.The proportion of adults 16 or older who are employed or looking for a job, now at 61.6 percent, has been slipping for years, falling from 66 percent in 2009 to 63 percent in early 2020. But it dived when the pandemic hit and has been slow to recover.The aging of the population, along with the tendency of less educated workers to drop out of the work force amid stagnating wages and fewer opportunities in higher-paid fields like manufacturing, has also hurt labor participation.And evidence is accumulating that more older workers are eyeing the exits.A recent household survey by the Federal Reserve Bank of New York found that the average probability of working beyond age 67 was 32.9 percent, equaling the lowest level since researchers began asking the question in 2014. In November 2020, the figure was 34.9 percent.The premature retirement of millions of workers sensing a lack of opportunity may seem puzzling when many businesses are scrambling to find employees — a conundrum that has forced economists to rethink the workings of the labor market.Part of the answer appears to be a mismatch of skills between available workers and jobs. In addition, salaries in many open positions have remained too low to lure people from the sidelines.If the newly retired workers don’t return, the labor market could get a lot tighter, heightening the risk that the Federal Reserve will need to raise interest rates to tamp down inflation, said Carl Tannenbaum, chief economist at Northern Trust in Chicago.“We already have a challenge of keeping labor force growth at decent levels,” he said. “Immigration is down, the birthrate is down, and it’s much harder for the economy to maintain its productive potential if all these folks stay retired.”Mrs. Vega said she might take a part-time job once the pandemic ebbs enough for her to comfortably return to an office setting, but she plans to spend the rest of her time with her parents and children.She qualified for a Pfizer pension available to retirees 55 or older. Though early retirement wasn’t in her plans, she is trying to make the best out of her situation.“I loved my job, but I don’t miss the stress levels,” she said. “The constant stress affects my mental and physical health. The pandemic made me realize how much time my job was taking away from me to spend with my family.”The Pattens feel unnerved with the sudden change after 22 years of nonstop work, but they, too, are looking at the upside.“We both know that, at our age, it was probably the best thing for us,” Mrs. Patten said. “We will get used to all of this time on our hands. Our plan is to volunteer, travel and look for a new place to live after 30 years on the old homestead.” More

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    In Reversal, Retirements Increased During the Pandemic

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    Job losses, rather than rising asset values, seem to be the main cause in upending a decades-long trend in the U.S.After decades in which it decreased, the retirement rate rose during the pandemic, according to the latest government data. This makes retirement one exception to the many ways that the pandemic accelerated pre-existing trends, such as toward suburbanization and online shopping.In the year since the pandemic started — the 12 months ending in March 2021 — 17.0 percent of Americans aged 55 to 64 were retired, up from 16.8 percent in the two previous years. But this is still a lower percentage than in earlier decades.

    The retirement rate rose more for people 65 to 74: It was 65.6 percent in the year up to March 2021, versus 64.0 percent in the year before the pandemic. That brought the rate back up almost to its level in 2011, though still below its 2001 level.

    What can explain this trend during the pandemic? Job losses and business closings could have prompted some older workers to retire earlier than they’d expected, a pattern seen in previous recessions. Another factor: Older workers were more at risk than younger ones from the coronavirus. At the same time, home prices and stock market values rose, putting some owners of such assets in a better position financially to retire.The statistics on retirement come from the monthly Current Population Survey, which is also the source of the unemployment rate and other key labor market measures. The survey does not explore why people retired. But the patterns of who retired, and when, can help tease out whether the increase during the pandemic was more about voluntary retirement because of rising wealth or involuntary retirement stemming from lost jobs or businesses.

    People with college degrees were both less likely to lose their jobs in the recession and more likely to own assets whose value appreciated. The retirement rate rose during the pandemic for those 65 to 74, regardless of education level. But for those 55 to 64, the rate rose only for those without a college degree. In contrast, the retirement rate fell for 55- to 64-year-olds with a college degree — exactly the group whose retirement rate would have increased if rising asset values had been a key factor in prompting early retirements.The timing of retirement during the pandemic further suggests that job losses, rather than rising asset values, explain more of the increase in retirement. Retirement rates were higher during the pandemic than before it, but they didn’t rise during the pandemic year. The rate for the first six months of the pandemic — April 2020 to September 2020 — was about the same as from October 2020 to March 2021.The seasonally adjusted retirement rate averaged 17.0 percent for 55- to 64-year-olds and 65.6 percent for 65- to 74-year-olds in both halves of the year.

    This time pattern of the rise in retirement coincides with the economic shutdown, business closures and job losses starting in March 2020. But one measure of asset prices — the S&P 500 — fell as the pandemic began; remained below its prepandemic peak until August; and was consistently above its prepandemic peak starting only in November. If higher asset prices, not job losses and business closings, were the main driver of pandemic retirement, the retirement rate should have increased as the pandemic wore on and as stock values rose.The rise in retirement during the pandemic is small relative to the longer-term decline in retirement rates. Increasing life expectancy, less physically demanding jobs, and a rise in the minimum age to collect full Social Security benefits have all contributed to longer work lives and later retirements over the past 20 years.Of course, the overall aging of the population has meant that a growing share of adults is retired, especially since the early 2010s, when the oldest baby boomers turned 65. All the data in this analysis are focused on specific age groups and adjust for the changing age distribution even within these groups.Even though the retirement rate increased during the pandemic, it won’t necessarily rise further. It’s worth emphasizing that the retirement rate rose around the start of the pandemic but did not continue to do so. After the initial spike in joblessness at the start of the pandemic, the share of those 55 to 64 who were out of work but not retired fell rapidly without a further rise in retirement.Now, employers are once again eager to hire. Though older workers face discrimination in hiring, the years before the pandemic showed that a tight labor market can lure some retirees back to work.Jed Kolko is the chief economist at Indeed.com. You can follow him on Twitter at @JedKolko. More

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    A Graying China May Have to Put Off Retirement. Workers Aren’t Happy.

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    Most Chinese workers retire by 60. But with the population aging and pension funds running low, the government says that must change.For Meng Shan, a 48-year-old urban management worker in the Chinese city of Nanchang, retirement can’t come soon enough.Mr. Meng, who is the equivalent of a low-level, unarmed law-enforcement official, often has to chase down unlicensed street vendors, a task he finds physically and emotionally taxing. Pay is low. Retirement, even on a meager government pension, would finally offer a break.So Mr. Meng was dismayed when the Chinese government said it would raise the mandatory retirement age, which is currently 60 for men. He wondered how much longer his body could handle the work, and whether his employer would dump him before he became eligible for a pension.“To tell the truth,” he said of the government’s announcement, “this is extremely unfriendly to us low-level workers.”China said last month that it would “gradually delay the legal retirement age” over the next five years, in an attempt to address one of the country’s most pressing issues. Its rapidly aging population means a shrinking labor force. State pension funds are at risk of running out. And China has some of the lowest retirement ages in the world: 50 for blue-collar female workers, 55 for white-collar female workers, and 60 for most men.The idea, though, is deeply unpopular. The government has yet to release details of its plan, but older workers have already decried being cheated of their promised timelines, while young people worry that competition for jobs, already fierce, will intensify.And workers with blue-collar or physically demanding jobs like Mr. Meng’s, who still make up the majority of China’s labor force, say they’ll be worn down, left unemployed or both.The announcement was made during the annual meeting of the national legislature, and afterward retirement-related topics trended for days on Chinese social media, racking up hundreds of millions of views and critical comments.Census workers in the Chinese region of Tibet in October. China’s population is aging rapidly.Roman Pilipey/EPA, via ShutterstockAround the world, raising the retirement age has emerged as one of the thorniest challenges a government can take on. Russia’s attempt to do so in 2018 led to President Vladimir V. Putin’s lowest approval ratings in years. Mr. Putin eventually pushed the plan through but granted concessions, a rare move for him.A pension reform plan in France prompted a prolonged transportation strike last year, forcing the government to shelve the proposal.The Chinese government itself abandoned a previous effort to raise retirement ages in 2015, in the face of a similar outcry.This time, it seems determined to follow through. But it has also acknowledged the backlash. Officials appear to be treading gingerly, leaving the details vague for now but suggesting that the threshold would be raised by just a few months each year.“They’ve been talking about it for a long time,” said Albert Francis Park, an economics professor at the Hong Kong University of Science and Technology who has studied China’s retirement system. “They’ll have to really exercise quite a bit of resolve to push it through.”China has been hurtling toward a retirement age crisis for years. The current standards were set in the 1950s, when the average citizen was expected to live until only his or her early 40s.But as the country has swiftly modernized, life expectancy has reached nearly 77 years, according to World Bank data. Birthrates have also plummeted, leaving China’s population distinctly top-heavy. More than 300 million people, about one-fifth of the population, are expected to be over 60 by 2025, according to the government.Most Chinese families depend on grandparents for child care. A later retirement age could complicate such arrangements.Wang Zhao/Agence France-Presse — Getty ImagesThe result is what experts call a serious threat to China’s continued economic growth and ability to compete. In Japan and many European nations, residents become eligible for pensions at 65 or later. At a recent news conference, You Jun, the deputy minister of human resources and social security, said China risked a “waste of human resources.”The backlash has underscored a host of other anxieties in Chinese society about issues such as job security, the social safety net and income inequality.The hypercompetitive environment that defines many white-collar workplaces in China is already grinding on Naomi Chen, a 29-year-old financial analyst in Shanghai. She has often discussed with friends her wish to retire early to escape the pressure, even if it means living more modestly.The government’s announcement only confirmed that desire. China already struggles to provide enough well-paid white-collar jobs for its ballooning ranks of university graduates. With fewer retirees, Ms. Chen worries, she would be left working just as hard but with less prospect of a payoff.“Getting promoted will definitely be slower, because the people above me won’t retire,” she said.In reality, older workers may suffer more. China has modernized so quickly that they tend to be much less skilled or educated than their younger counterparts, making some employers reluctant to retain them, Professor Park said. In several industries, including tech, 35 is seen as the age ceiling for being hired.Some young workers in China fear that pushing back the retirement age will have repercussions for them, and not just in the long term.Gilles Sabrié for The New York TimesDelaying retirement also risks undermining another major government priority: encouraging couples to have more children, to slow the aging of the population.In part because of inadequate child-care resources, the vast majority of Chinese rely on grandparents to be the primary caretakers for their children. Now, social media users are asking what will happen if the older generation is still working.Lu Xia, 26, said the prospect of later retirement made it impossible to consider having a second child. More children would eventually mean more grandchildren to care for, even as she was expected to keep working.“With delayed retirement, it’s hard to imagine what we’ll have to face by the time that we are grandparents,” said Ms. Lu, who lives in the city of Yangquan, southwest of Beijing.Unless China increases support for child care, new parents may leave the work force or postpone childbirth until their parents retire, exacerbating the labor shortage, Feng Jin, an economist at Fudan University, told a state-backed labor publication.Still, experts maintain that the cost of inaction would be too high. A 2019 report by the Chinese Academy of Social Sciences predicted that the country’s main pension fund would run out by 2035, in part because of the dwindling work force.A clothing factory in Jiangsu Province. Chinese officials have suggested that retirement ages would be raised gradually, by a few months per year.Chinatopix, via Associated PressThat has alarmed some young people, who wonder where their own pensions will come from if nothing changes.“I think this is pretty fair,” Wang Guohua, a 29-year-old blogger in Hebei Province, said of pushing back retirement ages. “If people are still alive but there’s no more money, that will affect social stability.”Mr. Wang added that he did not see the appeal of retiring at 60, given how much life expectancy had increased: “You won’t have anything to do.”Indeed, Bian Jianfu, who retired recently from his job as a manager at a state-owned enterprise in Sichuan Province, said he would not have minded working a few years longer. His pension would have increased, too.Mr. Bian receives about $1,000 a month, more than double the average for urban retirees. He praised the government for consistently raising pension payments over the past decade though some experts have acknowledged the strain that doing so has added to the system. “The Chinese government treats retirees very well,” he said.But that security is unevenly distributed, and it is likely to remain so even if the government shores up its pension funds.Mr. Meng, the urban management worker, is paid about $460 a month, one-tenth of which he pays toward pension and basic medical insurance funds. When he finally retires, he expects to draw $120 to $150 a month.He acknowledged that it was barely enough to live on. But he said he could make it work — even if he was now increasingly unsure when the date would come.“All I can do is hold on,” Mr. Meng said. “Keep holding on until I’ve reached the right age.”Mahjong in a Beijing park. The government has continued to raise pension payments for retirees.Thomas Peter/Reuters More