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Congressional Democrats introduced legislation on Tuesday to make it easier for older workers to win age discrimination lawsuits (a Supreme Court decision in June had made it harder by requiring that the worker show that age was the deciding factor in an employment decision).

Unemployment for older workers has climbed to record levels. Has age discrimination on the job become a bigger problem?

A Lose-Lose Situation

Teresa Ghilarducci, director of economic policy analysis at the New School for Social Research, is the author of “When I’m 64: The Plot Against Pensions and the Plan to Save Them.”

The bad news is that age discrimination is skyrocketing. According to the Equal Employment Opportunity Commission age discrimination claims were up 29 percent in 2008. This is almost double the increase in overall

discrimination complaints for race, sex, etc.

A hidden cause of the increase in age discrimination claims is the pension crisis.

Discrimination on the basis of age takes place when older workers are laid off, or bypassed for promotion or a pay increase. Getting hired is a problem too. Unemployed workers between the ages of

55 and 64 have the toughest time finding new jobs; 30 percent of older men are out of work for almost 30 weeks compared to 25- to 34-year-olds who get work in 10 weeks. One reason is that health insurance can cost an employer twice as much for a worker over age 40. This is yet another good reason for health care reform.

The good news is that the increasing numbers of older workers may break down barriers and prejudice.

But asking a pension economist if it’s a good thing that older people are working more is like asking a vegetarian about the falling price of beef. Eroding pensions — 401(k) assets in mutual funds declined by 40 percent last year — and a lousy economy explains why many older people are clinging to their jobs or returning to the labor market after retiring. A hidden cause of the increase in age discrimination claims is the pension crisis.

Read more… Everyone who wants to work should be able to and no one deserves to be judged by their age or any other factor that does not relate to their productivity. But forcing older people to work in order to cover their pension losses will have the unintended effect of also causing more age discrimination claims — a lose-lose situation.

Prejudice Is Flourishing

Peter Cappelli, the director of the Center for Human Resources at the Wharton School, is the author, with Bill Novelli, of a forthcoming book on managing older workers.



We can see evidence of discrimination in many different contexts from experiments where employers are presented with identical job applicants whose only difference is age to employee complaints brought by the Equal Employment Opportunity Commission.

It has gotten worse in recent years especially with the end of lifetime employment. Seniority-based pay schedules that paid more to experienced workers led many employers to cut experienced workers — who happen to be older — as a way to save money fast.



In the past, the terms and conditions of employment for older workers were laid out in formal rules. No longer.

The perception that older workers can’t or won’t change leads some employers to replace them with younger candidates as a means of changing the organization. Most distressingly and despite all research evidence pointing in the opposite direction, there is a common belief that older workers don’t perform as well as their younger counterparts. That causes employers to pass over them in hiring and promotions and to target them for layoffs.

Prejudice against older workers may not be worse now, but the ability to exercise that prejudice in the form of age discrimination is more common. In the past, the terms and conditions of employment especially as they relate to older workers were laid out in formal rules: The most senior workers got the promotions, pay increased with years of service, and layoffs were targeted at the newest hired.

Those rules have gone away in most organizations, leaving managers with discretion over how pay, promotion, hiring, and job assignments are determined. With that discretion, prejudice that may have always been there can be made manifest.

Legislation May Harm Workers

Joanna Lahey, an assistant professor of public policy at Texas A&M University, specializes in the economics of work and aging. She is on leave this year at RAND.



Age discrimination remains a significant workplace issue. From 1992 to 2008, 15.79 percent of cases brought to the Equal Employment Opportunity Commission, or about 4,585 cases per year, were described as successful claims. While this number is small given the number of workers covered by the Age Discrimination in Employment Act, many, if not most, instances of age discrimination are never litigated, and cases of hiring discrimination often go undetected.



If it is more difficult to fire an older worker than a younger worker, a firm will be less likely to want to hire older people.

Most of those who do sue are white, male middle-managers who are likely to have lost a sizeable salary and pension. For the most part, other groups do not litigate because the costs of a lawsuit do not outweigh the potential benefits.

There is strong experimental evidence for age discrimination in hiring, at least for entry-level jobs. In 2002-2003, I performed a labor market experiment in Boston and St. Petersburg, Fla. in which I sent out thousands of resumes for fictitious entry-level female candidates and measured response rate based on date of high school graduation. Among this group, younger applicants, whose date of high school graduation indicated that they were less than 50 years old, were 40 percent more likely to be called back for an interview than were older applicants.

Read more… It is difficult to tell whether employment problems are worse for older workers than for other workers when times are bad. The number of discrimination lawsuits increases during times of high unemployment, but this finding by itself does not indicate an increased level of age discrimination. In times of higher unemployment, the opportunity cost to a lawsuit is lower than it is when times are good. From the employer’s perspective, mass layoffs may seem like a good chance to remove a higher proportion of generally more expensive older workers without the worry of being sued. On the other hand, employers may be less likely to remove protected older workers because they still fear lawsuits. One thing we do know is that once an older worker loses a job, he or she is much less likely to find a new job than a younger worker is. Unfortunately, the effect of legislation prohibiting age discrimination is not clear cut and may actually be part of the reason it is so difficult for older workers to find employment. If it is more difficult to fire an older worker than a younger worker, a firm will be less likely to want to hire older workers. Indeed, my research finds that in states where workers have longer time to bring a lawsuit claim, older men work fewer weeks per year, are less likely to be hired, and less likely to be fired than men in states where they do not have as much time. Not many people would suggest that we go back to a world prior to the Age Discrimination in Employment Act, in which advertisements specify the specific ages of people they are willing to hire. However, legislation prohibiting discrimination is no panacea. The recent Supreme Court decision and the recent proposed congressional legislation could have both positive and negative effects on potential older workers.

More Expensive Workers

Alicia H. Munnell is the Peter F. Drucker professor of management sciences at Boston College’s Carroll School of Management and director of the college’s Center for Retirement Research.

Older workers today should be more attractive to employers than they were in the past. They are better educated, with no significant educational deficit relative to younger workers. Employment has shifted away from activities that require physical strength and stamina. And employer retirement income programs are no longer an escalator of compensation costs as workers age.



Keeping healthy older individuals in the labor force is best, but this may be a tough goal to achieve.

Nevertheless, there is little indication thus far that the employment prospects of older workers have improved. A 2006 survey conducted by the Center for Retirement Research at Boston College revealed that employers have mixed views of older workers. They think of them as knowledgeable about the company, at ease with customers, and reliable. But employers also worry about physical stamina of older workers, their ability to learn new things, and their commitment to continued employment.

This mixed view is reinforced by the economics. The productivity of older workers can be expected to at best stay level, but will likely turn down. The compensation of older workers at their career job will at best stay level, but probably rise. These patterns make the retention of older workers relatively unattractive. The hiring of older workers occurs only when they are willing to accept significantly lower rates of compensation than they had earned previously.

Keeping healthy older individuals in the labor force is best for them and for the economy. But given employer perceptions, this may be a tough goal to achieve.

Words That Harm

Robert M. McCann is an associate professor at the Marshall School of Business, University of Southern California

Ageist stereotypes are rife in society, and when placed in a workplace context, those generalizations often play out in unfair expectations about older workers by management and staff. Unfortunately, those views can also lead to discriminatory practices toward older workers.

The repercussions of age-laden communication and practices can be devastating to older employees, who may suffer declines in self-esteem and mental health. Such practices also hurt their employers, which may have to deal with declining productivity and age discrimination lawsuits.



Laid-off older workers, facing a grim job market, may have more incentive to take sue to recover lost wages or jobs than before.

Language can play a major role in many age discrimination cases. Remarks like “we need young blood around here,” “let’s make room for some M.B.A.s,” or “let’s bring in the young guns” are commonly found in age discrimination cases, where they’re seen as evidence of discriminatory motive.

Age discrimination probably has gotten worse in recent years. A variety of factors may account for the recent increase in age-bias claims among workers age 40 and above. Most notably, there is the possibility that laid-off older workers, facing a grim job market, may have more incentive to take legal action to recover their lost wages or jobs than before. On the other hand, it may be that companies are targeting older workers for layoffs because of their comparatively higher salaries, benefits, and medical costs.

It’s important to note that there are some positive trends happening in older worker employment, (see the AARP Best Employers for Workers Over 50). But in general, today’s older worker has many challenges to overcome.

Politics and Bias Cases

Mark A. Graber is a professor of law at the University of Maryland School of Law and a professor of government at the University of Maryland, College Park.



The Congressional effort to strengthen protections against age discrimination is not surprising. Two years ago, in Ledbetter v. Goodyear Tire and Rubber Company, the five conservative justices on the Roberts Court read the Civil Rights Act of 1964 very narrowly when denying the claim of a woman who alleged gender discrimination on the job. This year, Congress passed legislation to overturn the Ledbetter decision.



Two employment discrimination cases may be the first shots in what could be a protracted war.

This June, five justices in Gross v. FBL Financial Services interpreted the provisions of the Age Discrimination in Employment Act as permitting employers to fire employees as long as age was not the only reason for termination. On Tuesday, Democrats began what is likely to be the successful effort to reverse that decision.

From one perspective, these decisions and subsequent congressional reversals may be ordinary events. Both the Ledbetter and Gross decisions interpreted federal statutes, so there is no constitutional problem when Congress corrects judicial interpretations of federal law. Quite frequently, judicial decisions interpreting statutes even invite Congress to hand down a different rule.