“Boomers” and Age Discrimination

I originally planned to post the second part to my blog regarding the Fourth Industrial Revolution.  That was before I received the weekly SHRM (Society for Human Resource Management) newsletter with a  lead article concerning age discrimination in the workplace and how difficult it is to prove your case (“Discrimination Against Older Workers May Be Common but Hard to Prove” by Dana Wilkie, May 3, 2018). As I had previously started a draft on this subject I thought it timely to jump to this.

As an official “Boomer” (born in 1951), I have embarked on my encore career having left the dock of my former full-time career as a human resource/legal professional. I spent 40 years in that phase of my life, and then found myself wondering “what’s next”?

I wandered into a group called Encore NEO and learned that “retirement” is really a thing of the past. The days of putting in your 30+ years with one employer and then settling back to a life of leisure no longer exist for most of us. And maybe that’s a good thing.  I remember too many retirees from the companies that I worked for that passed away soon after or found that they were not ready for all of the free time that they suddenly had.

One significant change in the retirement landscape is the advent of 401(k) and similar “defined contribution” plans taking the place of traditional “defined benefit” plans. A defined benefit plan promises a specified monthly benefit at retirement. A defined contribution plan, on the other hand, does not promise a specific amount of benefits at retirement.  With a defined contribution plan the value of the account will fluctuate with changes in the value of the investments.  With this change, employers shifted the risk of loss due to lower investment returns in these retirement accounts to the employee. As a consequence, many so-called retirees found that they could not maintain the lifestyle they were used to while working full-time, and needed to keep working at some level to get by. See “Pensions Go Poof”, Sunday 1/21/18 Plain Dealer, Business Section.

Because the Boomer generation is so large, and with only so many jobs available in a job market that continues to move towards greater automation and movement of jobs to other countries with lower pay rates, lower corporate tax rates and less government regulation, retirees wishing to reenter the working world are competing with younger job seekers, and age can become a factor in the selection process. Although people 40 years and older are protected from discrimination based on their age under the federal Age Discrimination in Employment Act (ADEA), this does not preclude the inclination of employers to pass over the older worker in favor of the younger, lower paid, healthier, and generally more technically savvy millennial.

According to the U.S. Senate Aging Committee report released in December 2017 entitled “America’s Aging Workforce: Opportunities and Challenges,  “Americans [are] living and working longer …… The number of Americans over the age of 55 in the labor force is projected to increase from 35.7 million in 2016 to 42.1 million in 2026, and, by 2026, aging workers will make up nearly one-quarter of the labor force. At a time when more Americans are continuing to work until later in life, we must recognize and address the unique challenges that older employees face and ensure that our laws fully support all who wish to continue working by safeguarding them from age discrimination or forced retirement.”

Although most employers acknowledge the aging workforce trend, few are taking action, according to the report. “While 80 percent of employers say they are supportive of employees who plan to work past the age of 65, only 39 percent offer flexible scheduling options and only 31 percent facilitate processes for moving from full-time to part-time roles. ” This would seem to indicate that the majority of employers are not concerned about retaining their older workers.

According to the Senate report, almost one of every four workers over the age of 65 is self-employed, and that self-employment may be more common among older workers for multiple reasons, including that older individuals have had more time to acquire the capital and managerial skills to start a business, that the scheduling flexibility self-employment offers may be particularly attractive to older workers. I would also propose that this is due to many older workers not being able to return to traditional employment and choosing self-employment as a more achievable option.

For the other 75% of older workers who have not found self-employment, if the value of older workers is not recognized to a greater degree, it will fall to regulatory protections to ensure that they have an equal chance to remain a part of or return to the workforce. It remains to be seen whether a regulatory solution will work. The Age Discrimination in Employment Act (ADEA), which applies to workers 40 years and older, has been around since 1967 and yet “recent studies and surveys have repeatedly illustrated how certain practices significantly disadvantage older workers in today’s labor market. According to a 2013 AARP (American Association for Retired Persons) survey, nearly two-thirds of workers ages 45 to 74 reported that based on what they had seen or experienced, they believed workers still face age discrimination in the workplace today.” (Senate report page 23).  Regarding the impact of the age discrimination law, the report states that “combating age discrimination in the workplace has become more difficult in recent years……workers alleging age discrimination now face a higher burden of proof in court than do workers alleging discrimination on the basis of race, sex, national origin, or religion.” (page 24).  This is also the conclusion of the SHRM article mentioned at the beginning of this post, which points out that although 23% of complaints filed in 2016 with the Equal Employment Opportunity Commission (EEOC) were for age discrimination, only 2% of claims taken to litigation by the EEOC were for age discrimination.

I believe that what is needed is (1) greater education of employers on the value of older workers as participants in the workplace, ways that they can retain and attract that population, and (2) assistance to older workers in becoming self-employed as an option, rather than the “big stick” approach of further regulations and laws which do not appear to be effective.

 

Published by Dave the HR Compliance Guy

Human Resource and legal professional specializing in HR compliance advisory services

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