Aging Workforce Likely To Increase Age Discrimination Claims and Change Retirement Plans
>Within 20 years, nearly 20% of Americans, 71 million people, will be age 65 or older. Thanks to the baby boomers, America is getting older and doing so at a rapid rate. Recently, a federal task force published a report addressing the aging of the American workforce. The task force was comprised of representatives from the Departments of Commerce, Education, Health and Human Services, Labor, Transportation, and Treasury; the Equal Employment Opportunity Commission; Small Business Administration; and Social Security Administration.
The task force reports that many older Americans want to continue working or need to do so for financial reasons. Indeed, much has been written lately on the need for older workers to work longer because of shortfalls in retirement benefits. Pre-retirees expect to work on average a full decade longer than those already in retirement, with nearly half expecting to work early in retirement and one in three working throughout retirement to bolster their savings. This is not likely to change anytime soon. A majority of employers believe that employees prefer higher salaries instead of better retirement benefits. In addition, for those that do have 401(k) plans, they are borrowing and withdrawing funds at a record rate.
While workers face economic pressure to work longer, the task force notes that older individuals often face challenges to full participation in the labor market, including a difficult job market for older workers with outdated skills; negative perceptions of older workers’ abilities; health issues, disabilities, or physical limitations for certain types of work; and the lack of flexible work arrangements to enable a greater work-life balance. A 2002 survey of workers ages 45 to 74 revealed that around two-thirds of respondents reported having witnessed or experienced age discrimination in the workplace,. An experimental study of hiring conditions for older women in entry-level jobs in Boston, Massachusetts, and St. Petersburg, Florida, found that younger workers were more than 40 percent more likely to be offered a job interview than older workers.
The report states as follows:
Some employers have the view that older workers cost more and produce less than their younger counterparts. This view appears to be based on concerns about wage and benefit costs of older workers as well as age based stereotypes that older workers are unproductive, inflexible, and unwilling to learn. However, research is beginning to show that some employers may overestimate the costs associated with employing older workers while simultaneously underestimating the benefits. Furthermore, little evidence supports the view that older workers are less productive. Additional research may better measure the effect on production of increased experience. Ageist stereotypes may subside as contrary empirical evidence mounts and employers need greater workforce contributions from older workers; however, to date, age discrimination remains a problem for older workers.
The report also notes that some older workers will decide to forgo enforcing their rights:
The ADEA, Age Discrimination in Employment Act of 1967, prohibits age discrimination in employment and employee benefits against persons age 40 and older. Although it has been prohibited for 40 years, age discrimination persists in the workplace. When faced with age discrimination, or what they perceive to be age discriminatory behavior, some employees may choose to move on or retire rather than challenge the illegality through a lengthy and uncertain process.
The report recommends comprehensive legislative action on flexible retirement arrangements to allow employees to phase into full retirement and thereby stay in the workforce longer. However, it makes no recommendations on the ADEA or age discrimination issues. Undoubtedly, age discrimination claims will continue to increase as older workers, who face economic pressure to stay in the workforce, fall victim to ageist stereotypes and barriers to equal employment opportunity.