Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 432

Are older Australians re-assessing the job market?

Before Covid-19, a major reason that Aussies weren’t employed or looking for jobs was because they had retired. That is, they were out of the job market. In fact, in April 2018, 38.7% of people said that they were “Permanently not intending to work (aged 65 and over)”, up from 33% just four years prior (September 2014). Then there was a reassessment. The proportion of those not in the workforce because they were retired fell from 38.7% to a 3-year low of 35.3% in July 2019.

Record numbers, but are they accurate?

And in the period since, due to Covid, it is not possible to determine firmly whether the trend has changed because more people exited the job market over the lockdown period. They weren’t employed as such – they didn’t work for one hour or more in the past week - but neither were they looking for work because they were likely to return to their employer after the lockdown.

The lockdowns have effectively scrambled the data. The proportion of those not in the workforce because they were retired hit a record 39.9% of the total in June 2021 and this has since fallen to a low of 36.4% per cent in September 2021.

So let's check two other data points at different ages.

First, a record proportion of people aged 60 to 64 years are in work.

Second, the 65 years plus age group participation rate shows more Aussies are working longer.

Impact on overall job market

Working out why people are not in the job market will be important in coming months. If more people are electing to retire then there are fewer potential workers to fill positions. That may mean the job market tightens more than generally expected, putting upward pressure on wages and prices. And that is especially the case if foreign borders stay closed.

In other words, The Great Retirement could lead to a tighter job market. Older Aussies may see greater health risks in being in the job market in the Covid era. And still others may elect to live large given the experience of the past 18 months.

At this stage data still shows that older Aussies are active in the job market with record participation levels. However peak levels may not be far away.

In other countries, notably the US, there are similar concerns about the future state of job markets with more businesses saying they can’t find the workers to fill positions.

The great reopening has led to supply-chain breakdowns and higher prices for goods. The great reopening may lead to similar worker-job breakdowns, with labour shortages driving up wages. With thousands of Aussies reaching retirement age every week, their decisions about work could have broader, long-term inflationary implications.

 

Craig James is Chief Economist at Commonwealth Securities Limited (CommSec). This article provides general market-related commentary only and has been prepared without taking into account your objectives, financial situation or needs.

 

7 Comments
C
November 06, 2021

For every person retiring there is a young person leaving school or university in need of a job. As for WFH, people should be careful what they wish for. If their job can be done remotely from home, then maybe the company can save a lot of money using people in the Phillipines as has already happened in some IT sectors.

Geoff
November 07, 2021

A lot of companies started in-sourcing again when countries providing off-shore services just shut up shop with no notice during the pandemic (usually mandated by government, not the choice of the companies). A lot of businesses have learnt from that. And IT and processing sort of work, but you need capable people on shore to control them - I doubt there will be a significant outflux of jobs as a result of the pandemic.

Graham W
November 03, 2021

Centrelink now allows Age pensioners to each work and earn $320 per fortnight without affecting the Income Test.
This means an extra $8,320 pa, double that for a couple. Certainly a no-brainer for those with limited financial assets.
And it accumulated so that you can earn your $8,000 or so in one burst and have the rest of the year off.

Jerome Lander
November 06, 2021

Evidence of change means we need to think about how we build portfolios differently for the future, particularly for those who have accumulated substantial wealth and want to protect it from a changing economic environment. Inflation is certainly one of the big concerns that most aren't ready for.

C
November 06, 2021

People better be careful what they wish for. If their job can be done remotely from home, then maybe the company can save a lot of money using people in the Phillipines instead. And as mortgage rates go up in coming years with rising interest rates , people will still need jobs. For every person who retires there is a young person leaving school or finishing university needing a job.

john
November 07, 2021

J
Yep, made redundant by NSW Govt in 2020. Called "voluntary redundancy" by the HR dept. but certainly wasn't from my perspective. Take redundancy payout and accept voluntary classification or struggle financially.
So job market can get stuffed at this point, will sit on sidelines for as long as possible.
HR gatekeepers and departments are the driving force in the great switch off for many workers.

 

Leave a Comment:

RELATED ARTICLES

Jobs Summit keynote: the changing Australian economy

Soft labour market's impact on retirement outcomes

When you can withdraw your super

banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

The hidden property empire of Australia’s politicians

With rising home prices and falling affordability, political leaders preach reform. But asset disclosures show many are heavily invested in property - raising doubts about whose interests housing policy really protects.

Preparing for aged care

Whether for yourself or a family member, it’s never too early to start thinking about aged care. This looks at the best ways to plan ahead, as well as the changes coming to aged care from November 1 this year.

Latest Updates

Shares

Four best-ever charts for every adviser and investor

In any year since 1875, if you'd invested in the ASX, turned away and come back eight years later, your average return would be 120% with no negative periods. It's just one of the must-have stats that all investors should know.

Our experts on Jim Chalmers' super tax backdown

Labor has caved to pressure on key parts of the Division 296 tax, though also added some important nuances. Here are six experts’ views on the changes and what they mean for you.        

Superannuation

When you can withdraw your super

You can’t freely withdraw your super before 65. You need to meet certain legal conditions tied to your age, whether you’ve retired, or if you're using a transition to retirement option. 

Retirement

A national guide to concession entitlements

Navigating retirement concessions is unnecessarily complex. This outlines a new project to help older Australians find what they’re entitled to - quickly, clearly, and with less stress. 

Property

The psychology of REIT investing

Market shocks and rallies test every investor’s resolve. This explores practical strategies to stay grounded - resisting panic in downturns and FOMO in booms - while focusing on long-term returns. 

Fixed interest

Bonds are copping a bad rap

Bonds have had a tough few years and many investors are turning to other assets to diversify their portfolios. However, bonds can still play a valuable role as a source of income and risk mitigation.

Strategy

Is it time to fire the consultants?

The NSW government is cutting the use of consultants. Universities have also been criticized for relying on consultants as cover for restructuring plans. But are consultants really the problem they're made out to be?

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.