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It is time to ask whether retirement remains a viable option for many (if not most) older workers due to back-to-back economic disasters and epidemic age discrimination.
Older workers were slammed in 2007 when Wall Street collapsed and the nation was plunged into the worst economic recession in a hundred years. Today older workers face a potentially worse situation due to mass layoffs caused by the COVID-19 pandemic.
Some businesses will close and jobs will be lost but, if the past is any indicator, others will use the opportunity afforded by economic chaos to sidestep older workers and target younger workers for hire. And what will stop them?
The major problem facing older workers today is age discrimination in hiring and that is, to a shocking degree, perfectly legal under federal law.
Re-employment Rate
When older workers lose jobs, they disproportionately are plunged into long-term unemployment and their chances of finding equivalent new work are slim.
Many spend down savings, work low-paid gig jobs that offer few, if any, benefits and start collecting Social Security as soon as they become eligible, thereby losing up to a third of their potential benefits. Many are bankrupted by our nation’s so-called healthcare “system.”
The Pew Research Center reports the COVID-19 outbreak has swelled the ranks of unemployed Americans by more than 14 million, up from 6.2 million in February to 20.5 million in May 2020. As usual, women suffer disproportionately, with 14.3% unemployment compared to 11.9% for men.
Overall, Pew reports the 13% rise in unemployment due to COVID-19 is substantially greater than the 10.6% increase during the Great Recession. Pew states the COVID-19 recession is more comparable to the Great Depression of the 1930s, when the unemployment rate is estimated to have reached 25%.
Even in the best of times, unemployed older workers have difficulty finding new jobs.
According to the U.S. Bureau of Labor Statistics, the re-employment rate was 76 percent for workers ages 25 to 54 in January 2018. For those aged 55 to 64, the re-employment rate was 60 percent and for those aged 65 years and above it was a mere 31 percent.
Legalized Age Discrimination
The potential for harmful age discrimination in the months ahead is heightened by the fact that federal courts have effectively barred older workers from pursuing valid age discrimination claims.
Two federal appeals courts ruled in recent years that the Age Discrimination in Employment Act of 1967 (ADEA) does not cover outside job applicants. They are the U.S. Court of Appeals for the Eleventh Circuit based in Atlanta and the U.S. Court of Appeals for the Seventh Circuit based in Chicago, which, combined, cover IL, IN, WI, AL, GA and FL.
These courts have left the overwhelming majority of older job applicants vulnerable to systemic age discrimination in hiring, including the widespread practice of targeting job advertisements to younger workers via social media.
Since 2009, it has been virtually impossible for older workers to prove intentional discrimination due to the U.S. Supreme Court’s ruling in Gross v. FBL Financial Services, Inc. The Court held the ADEA requires older workers to show that age discrimination was the “but for” or determinative cause of age discrimination whereas Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, sex, religion, color and national origin, requires only that a plaintiff show discrimination was a factor in an adverse employment decision to prevail.
The U.S. Congress has failed numerous times over the past decade to “fix” the Gross decision by passing the Protecting Older Workers Against Discrimination Act (POWADA), which would restore the ADEA’s pre-Gross “mixed-motive” standard. The U.S. House of Representatives in January for the first time passed the POWADA but the Republican-controlled Senate failed to bring POWADA to a vote after GOP President Donald Trump’s declared he would veto the bill.
Equal Protection?
At this point, some may wonder why older workers are denied the fundamental right of all citizens under the U.S. Constitution to “the equal protection of the laws.”
That’s because the U.S. Supreme Court continues to follow a long ago-discredited 1970s-era precedent holding that age discrimination is entitled only to “rational basis review.” A law that discriminates on the basis of age need only be “rational” to survive judicial review. By comparison, the Supreme Court requires laws that discriminate on the basis of race and sex to serve a “compelling governmental interest” and be narrowly tailored to achieve that interest.
The bottom line is that many more Americans can be expected to face a bleak old age in the coming years due to back-to-back economic catastrophes. Workers lives are not unlimited. Many will be unable some day to drive for a ride sharing service or pet sit.
Will society step up to help them?
The Senior Citizens League of Alexandria, VA, recently objected to President Trump’s proposal to cut the payroll tax in his second economic stimulus package, warning this would cause the loss of payroll taxes that support Social Security and Medicare and could result in permanent benefit cuts. Retirees are concerned that “down the line, benefits will be permanently cut to pay for these ‘temporary’ tax cuts,” a spokesperson said.
