Economists Say Age Discrimination in Hiring Forces Cuts in Social Security

The Federal Reserve Bank of San Francisco issued an “Economic Letter” this week noting that “current policies” in place to combat age discrimination in hiring may not work, which is increasing the burden on U.S. Social Security and forcing policy-makers to find ways to limit benefits.

The authors, economists David Neumark and Ian Burn, from the University of California and Patrick Button of Tulane University, also say  research shows that age discrimination most adversely affects women who “end up quite poor” at the end of their lives.

The authors say older workers are being encouraged to work longer but can’t find jobs due to age discrimination.

“Population aging and the consequent increased financial burden on the U.S. Social Security system is driving new proposals for program reform. One major reform goal is to create stronger incentives for older individuals to stay in the workforce longer.  However, hiring discrimination against older workers creates demand-side barriers that limit the effectiveness of these supply side reforms,”  state the authors.

The authors say age discrimination in hiring is creating pressure on policy makers to reduce the age for Social Security benefits and to cut benefits.

The paper touches upon an issue that I raised in my 2014 book, Betrayed: The Legalization of Age Discrimination in the Workplace.   I note that older workers have suffered from legal inequality for 50 years. The Age Discrimination in Employment Act of 1967, unlike Title VII of the Civil Rights Act of 1964, does not allow victims of age discrimination to collect punitive or compensatory damages. This limits potential damages and makes it  hard to find an attorney. The authors note that current enforcement of our nation’s discrimination laws lies in large part upon private litigation, which “may be ineffective at reducing or eliminating age discrimination in hiring. In particular, the potential rewards to plaintiffs’ attorneys may be too low to encourage sufficient enforcement, because it is difficult to file a class action lawsuit, and economic damages from discrimination in hiring may be small.” they write.

However, the authors do not address other aspects of the ADEA that contribute to legal inequality for older workers and another major driver of age discrimination today – the  EEOC’s virtual  lack of enforcement of the ADEA.

Continued refusal by business to hire older workers “could lead to even harsher policy reforms for seniors… “

The authors write that they do not know exactly why women are most adversely affected by age discrimination ” but it could be because applicant appearance matters in our sample of low-skilled jobs, and the effects of aging on physical appearance are evaluated more harshly for women than for men “

Comments

  1. Irene Ryan says:

    The EEOC needs to step in with quotas. Quotas work and are fast and easy. With 100 qualified applicants from every background out there, the workplace should reflect the demographics.

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