No End in Sight?

More than half of older Americans who are unemployed are in the ranks of  the long-term unemployed.

The  Government Accountability Office reports that 55 percent of unemployed older workers have been unemployed for longer than six months, compared to a rate of about 35 percent for younger workers. Over one quarter of unemployed older workers have been out of work for a year or more.

According to the New York Times, older workers saw the largest proportionate increase in unemployment in the economic downturn of any age group. The number of unemployed people between ages 50 and 65 more than doubled.  And older workers are unemployed much longer than other age groups. A study last year by the Pew Charitable Trusts found that 44 percent of workers unemployed at least a year were 55 or older.

In fact, the chance of a long-term unemployed worker finding a new job in this jobless recovery are poor to nonexistent. Many will be forced to exhaust their life savings  to survive. Many will be forced to  claim Social Security as soon as they turn age 62, suffering a 25 percent cut in benefits for the rest of their lives.

One reason that older Americans are stuck in the dead end of long-term unemployment is that they are more vulnerable to discrimination than  other Americans.  This is a problem because many older Americans are laid off or fired because they earn higher salaries,  are more costly to medically insure or they simply don’t fit within a youth culture that is deemed more desirable.

Why are older Americans more  vulnerable to discrimination?

In  2009, the U.S. Supreme Court issued a ruling that gutted the Age Discrimination in Employment Act. That  ruling  could be – but has not been – fixed by the  U.S. Congress.

In Gross v. FBL Financial Services, the Supreme Court upended the longstanding and established burdens of proof in employment discrimination cases.  The Court held that plaintiffs alleging age discrimination must prove that age was the “but for” or deciding factor in an employment decision.  In contrast, plaintiffs alleging discrimination based on race, sex, national origin, and religion need only prove that discrimination was a “motivating factor.”  The ruling places age discrimination plaintiffs in the impossible position of having to disprove any other factor the employer claims it relied upon.

The new “but for” standard is so high that  many employment lawyers today won’t take age discrimination cases.

The rationale for this ruling was that  Congress did not amend the ADEA when it amended Title VII of the Civil Rights Act in 1991 to allow plaintiffs to prevail if they could show that discrimination was a “motivating factor” for the adverse employment action.

In 2012, Senators Tom Harkin, D-Iowa, and Chuck Grassley,  R-Iowa, and Patrick Leahy, D-Vermont, proposed the Protecting Older Workers Against Discrimination Act (POWADA), a bill that is aimed at restoring  rights stripped from older workers by the Gross decision. The bill went nowhere.

POWADA was reintroduced in July but is presently given very slim chance of passage. (Readers are urged to contact their legislators!)

Human Toll

Research shows that older Americans were three times more likely to become unemployed because they lose their jobs, while younger workers were three times as likely to be unemployed because they are looking for a first job or reentering the workforce, perhaps after finishing college.

Job loss has a devastating affect on the retirement security of  older workers. They cannot contribute to 401k plans or are forced to draw down their accounts. They have less time to recoup their losses to prepare for retirement than younger workers.

An October 2011 survey by the American Association of Retired Persons of workers age 50 and over found that nearly a quarter said that they had used all of their savings during the past  three years.

The human toll of long term unemployment is devastating. Job loss is associated with illness and a higher rate of suicide, especially for unemployed older male workers who were previously steadily employed.

In 1967,, the U.S. Congress passed the ADEA because of widespread and overt discrimination against older Americans. When President Lyndon Johnson signed the ADEA into law he said it would help insure  that the most qualified applicant got the job.  Would President Johnson even recognize the ADEA today as it is being interpreted by federal judges in courthouses across the country?   Probably not.  The complex burden-shifting that resulted from Gross leads away from substantive issues like “qualifications” and results in the dismissal of most of age discrimination cases on pre-trial motions.

One wonders how much longer older Americans will  suffer before the U.S. Congress acts enacts POWADA and the  Obama administration adopts policies addressing the plight of older Americans who are disproportionately represented among the long term unemployment.

The ADEA makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.” The statute not only applies to hiring, discharge, and promotion, but also prohibits discrimination in employee benefit plans such as health coverage and pensions. In addition to employers, the ADEA also applies to labor organizations and employment agencies.