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Photo illustration: Annelise Capossela/Axios. Photo by George Rinhart/Corbis via Getty Images.

The coronavirus is already triggering early retirements. That's bad news for the American economy, experts say.

Why it matters: "It’s a missed opportunity if people are being forced to retire early," London Business School's Scott says. "There's a big impact on their lifetime earnings and a big impact on lifetime expenditures. And that has macroeconomic consequences."

  • Since March, 2.9 million workers between 55 and 70 have left the workforce, according to the New School's Schwartz Center for Economic Policy Analysis. That's far more than the 1.9 million such workers who exited the workforce in the three months after the start of the Great Recession.

There are four factors that are creating a "perfect storm" for early retirement, Nicholas Bloom, an economist at Stanford, tells Axios.

  1. The decreased demand for workers due to the recession is lowering wages.
  2. The uptick in layoffs means many older workers have lost jobs that they liked.
  3. Working might mean increasing the risk of getting infected.
  4. "The stock market is performing well, so defined contribution retirement funds look strong," he says.

The big picture: These early retirements will shrink the U.S. labor supply. "You have less workers and more retirees, which is bad for long-run growth," says Bloom.

  • On top of that, many people may be pushed to retire early even if they aren't prepared to do so. Working until 55 if you had planned to work until 70 is a huge problem.
  • Around 3.1 million older workers will fall into poverty after retirement as a result of the coronavirus recession, the Schwartz Center projects.

Some sectors will be hit harder than others by early retirements. For example, older workers are disproportionately represented in education. "I fear early retirement is going to create major shortages of teachers in certain parts of the country," Bloom says.

The other side: There are many older workers who are being pulled back into the workforce due to the coronavirus.

  • There's "an urgent demand for medical and technology professionals to return to work from retirement or a career break," Carol Fishman Cohen writes in the Harvard Business Review.
  • "Returning physicians and nurses, along with technologists proficient in the 'ancient' COBOL coding language that many states still use in processing unemployment claims, are helping society," she writes.

The institutional knowledge that these returning workers are bringing during the crisis is chipping away at some of the prejudices against older people — that their skills have deteriorated or become obsolete.

  • "We're seeing that older workers do understand technology and can keep up," AARP's Jenkins tells Axios. "In a matter of two to three weeks, you saw this transition to a teleworking economy. And seeing older workers adapt? That gives me hope."

Go deeper

Bryan Walsh, author of Future
Nov 18, 2020 - Technology

The robo-job apocalypse is being delayed

Illustration: Eniola Odetunde/Axios

A sprawling new report makes the case that automation and AI won't lead to widespread job destruction anytime soon.

Why it matters: Technological advances in AI and automation will have an enormous impact on the workforce, but it may take decades for those effects to be fully felt. That gives business leaders and politicians a last chance to change labor and education policies that have left too many workers locked in low-quality, low-paying jobs.

Bryan Walsh, author of Future
Nov 19, 2020 - Technology

Survey: Executives are prioritizing AI skills

Illustration: Annelise Capossela/Axios

Executives and senior managers say they will prioritize hiring candidates who have skills in automation and AI, according to a survey first shared with Axios.

Why it matters: Automation hasn't yet transformed the business world, in part because companies don't yet know how to harness these new technologies. If that's going to happen, they'll need workers who know how to use AI.

Miriam Kramer, author of Space
45 mins ago - Science

Biden's military space future

Illustration: Eniola Odetunde/Axios

President-elect Joe Biden should anticipate major and minor conflicts in space from even the earliest days of his presidency.

The big picture: President Donald Trump's military and civil space policies are well-documented, but Biden's record and views on space are less clear.