My takeaway from this graph is that the employment of the elderly hasn't fallen on account of the recession and that's not necessarily a good thing. To understand why, here's a quote from Mulligan's original take on the graph:
Many elderly people, for example, saw the market values of their homes and retirement assets plummet in 2008 and feel they can no longer afford to be retired. Naturally, many of them react by looking for work.Rather than being an indicator that times are swell for the elderly, this graph indicates to me that many elderly individuals put off retirement on account of the poor economy. The elderly are clearly worse off on account of the recession (this is using Mulligan's description of this graph). In fact, this is an excellent example of when more employment is a bad thing.
The blue and green lines in the chart show that the elderly have been much more successful than the general population at obtaining and retaining jobs.
When trying to measure our well being, consumption opportunities do not tell the whole story. Leisure activity is important, just ask The Onion (in all seriousness). This is to say that one needs to be careful when talking about macro aggregates like employment. There are plenty of reasons why employment might rise -- most of the time greater employment means better opportunities, but this example is not one of those times.
For additional reading on this topic and graph, here is Mark Thoma's take.