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.

According to the authors,  older workers are being encouraged to work longer but can’t find jobs due to age discrimination in hiring.

“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 “

Feds Bear Responsibility for Age Discrimination in Hiring

Note:  A major research study was released Monday finding “robust evidence of age discrimination in hirng against older women.” – Is It Harder for Older Workers to Find Jobs? New and Improved Evidence from a Field Experiment by David Neumark, Ian Burn, and Patrick Button

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Age discrimination in hiring is epidemic in the United States and much of the reason for this is directly attributed to our own federal government.

It’s almost impossible for individuals to fight age discrimination in hiring because they lack access to critical information, such as the identity of the other candidates and why the successful candidates were chosen.  A highly qualified older job applicant  may suspect age discrimination but can’t prove it. The evidence is in the hands of the employer, who has no obligation to release it unless it is demanded pursuant to court-ordered discovery in a lawsuit.  A lawsuit alleging age discrimination in hiring is almost certain to be dismissed prior to discovery if it is based solely upon speculation. It’s a vicious circle –> no information, no basis for a lawsuit -> no lawsuit, no ability to obtain information.

This is why it is incumbent upon the Equal Employment Opportunity Commission  and the U.S. Department of Labor to protect workers from arbitrary discrimination in hiring. But the EEOC and DOL have virtually ignored the problem since it became an epidemic during the Great Recession of 2008.

The EEOC filed 12 lawsuits with age discrimination claims in 2014, compared to 76 lawsuits with Title VII claims  (primarily race and sex discrimination)  and 49 lawsuits with disability claims. The EEOC filed only 7 lawsuits with age claims in 2013.

Here are somes things that our government can do now to deter age discrimination in hiring:

  1. The EEOC could require employers to provide age-related data, along with data on the race and gender of their employees,  in their mandatory EEO-1 Reports, which are due at the end of this month. The EEOC could use this information to identify and prosecute corporate “bad actors” who refuse to hire older workers (i.e. Silicon Valley tech companies). If the EEOC does not accept that it has the regulatory authority to require employerss to provide age  data, it could ask Congress for the authority.
  2. The federal government could stop engaging in age discrimination in hiring. Not only does this hurt older workers but it sends a terrible message to private sector employers that age discrimination in hiring is warranted, reasonable, okay and will be tolerated.
    1. U.S. Department of Labor Secretary Thomas E. Perez could withdraw his support for the “100,000 Opportunities Initiative”  by America’s top corporations to hire workers between the ages of 16 and 24. This initiative blatantly violates the terms of the ADEA, which prohibits any consideration of age in hiring (except for a few categories of workers to which this does not apply).
    2. President Barack Obama could rescind his 2010 executive order that permits federal agencies to discriminate against job applicants on the basis of age. After all, if the feds can do it, why can’t Silicon Valley?
    3. The EEOC could acknowledge that complaints about age discrimination comprise almost a quarter of all of the complaints the EEOC receives annually but only a tiny fraction of the agency’s investigatory and prosecutorial resources are devoted to the problem. Age discrimination is no less harmful than other illegal and arbitrary discrimination so why does it get such short shrift from the EEOC?

On Monday, there were  1000+ jobs on Monster.com posted by employers and employment agencies seeking to hire  “recent graduates” and 1000+ jobs  advertising for a “digital native.”  Technically, it is unlawful under the ADEA to print or publish a “notice or advertisement” indicating preferences or limitations relating to age. The overwhelming majority of recent graduates and digital natives are under the age of 40.  But no one has been held to account in recent years for this widespread practice.

A law that is not enforced is an illusion.

EEOC Makes its Presence Known in Silicon Valley

The EEOC this week filed a lawsuit alleging age discrimination in hiring against a Silicon Valley, CA, employer.

No, the EEOC didn’t sue Google or Microsoft. The EEOC sued  the city of Milpitas for violating the Age Discrimination in Employment Act by choosing a younger candidate over older applicants with greater qualifications for the position of executive secretary to the city manager. The city allegedly failed to hire four qualified applicants who scored higher than the person selected in a three-person panel review of the candidates.  The individuals who were not selected were 55, 42, 56 and 58 years old. Instead, EEOC alleges the city hired a younger applicant (age 39) who was less qualified than these people, without a valid justification for disregarding the panel rankings.

EEOCAge discrimination in hiring is particularly blatant in Silicon Valley, where the high-tech industry is notorious for hiring only young workers.  Some Silicon Valley employers unabashedly advertise for job applicants who are “digital natives” and “recent graduates.”

A  60-year-old software engineer who was not hired by Google in 2011 filed a class action age discrimination lawsuit against Google earlier this year. The lawsuit  alleges the company’s workforce is “grossly disproportionate” with respect to age. The lawsuit asserts the median age of the 28,000 employees who worked for Google in 2013 was 29.  The U.S. Department of Labor reports the median age for computer programmers in the United States is 42.8 and the median age for software developers is 40.6.

EEOC Senior Counsel Cathy Ventrell-Monsees, in a speech last summer, singled out open and flagrant age discrimination in the high-tech industry, adding, “Some of our officers have made it a priority in looking at age discrimination in the tech industry.”

 Silicon Valley has been a virtual apartheid ‘state’ for younger workers for years.

The EEOC lawsuit was filed in U.S. District Court, Northern District of California (EEOC v. City of Milpitas, Case No. 5:15-cv-04444) after attempts failed to reach a pre-litigation settlement through its conciliation process.  EEOC’s suit seeks, among other things, monetary damages for the four applicants and injunctive relief intended to prevent a recurrence of age discrimination in City of Milpitas government.

“Older workers continue to face discrimination based on age due to negative stereotypes and inaccurate assumptions about their abilities,” said EEOC San Francisco Acting Regional Attorney Jonathan Peck.  “It is important for employers to ensure that such stereotyping does not impact a person’s ability to be employed.  Employment decisions must be based on merit, not age.”

EEOC San Francisco District Director William R. Tamayo added, “Age discrimination remains a problem, making up 23 percent of all EEOC charges filed in the United States last year.  It is important that employers not ignore the value that older workers can bring to their workforce.”

‘Want Ads’ and Age Discrimination

Are you a recent college graduate … Pulte Mortgage (a subsidiary of Pulte Homes) is always looking for energetic and motivated individuals who are ready to take the first step in building a long-term mortgage career! – Simply Hired, 6/26/14.

“We are currently seeking an associate with 2-3 (MAXIMUM) years of Labor and Employment experience.” – Craig’s List,  6/26/14

Anyone who doesn’t think that age discrimination is rampant and unaddressed in American society should take a look at the “want ads.”

An easy and obvious way that employers  discriminate against older applicants is to require job applicants  to be recent college graduates or to have a maximum amount of experience.  These types of advertisements are seen on most if not all  Internet hiring sites.

One reason  the U.S. Congress passed the Age Discrimination in Employment Act (ADEA) in 1967 was to prohibit  job advertisements  that barred applicants over a certain age from applying. At that time, one-half of all private-sector job openings explicitly barred applicants over the age of 55 and one-quarter barred workers over the age of 45.  More than 60 percent of low-skilled industrial jobs had age cut-offs between 35 and 49 years of age, and 13 percent of sales jobs were limited to workers under the age of 35.

Imagine being 35 years old and barred from applying for a sales job!  Wait a minute.  You don’t have to. You can be barred from applying  for a sales job today at the age of 35 if you have more than two or three years of experience.

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