The EEOC, Age & the Great Recession

The Great Recession hit older workers like a baseball bat.

Older workers were fired and laid off, dumped nto a sea of long-term unemployment, poorly-paid temp or part-time work and into an ill-advised early retirement. Many have not recovered and never will.

In my new book, Betrayed: The Legalization of Age Discrimination, I write that a record number of age discrimination complaints were filed with the U.S. Equal Employment Opportunity Commission (EEOC) during the recession. The agency did little to respond to the precipitous upswing in age discrimination complaints and has continued to ignore the problem. I note that in 2013 the EEOC received more than 21,000 complaints of age discrimination but filed only seven lawsuits with age discrimination claims. The book was published in late August.

I was pleased to read an announcement by the EEOC on Monday that the agency had settled an age discirmination lawsuit that it filed on September 15 against DSW Inc., a national shoe retailer which allegedly unfairly fired older workers from 2008 -2009. The agency said DSW had agreed to pay $900,000 in monetary relief to seven former managers and about 100 other former employees. If split evenly, that works out to approximately $8,400 per age discrmination victim. The settlement also requries DSW to report any future employee complaints of age discrimination to the EEOC for the next three years and to revise its anti-discrimination policy.

DSW, which is based in Columbus, Ohio, allegedly used a common tactic to get rid of older workers during periods of economic turmoil. The EEOC alleged that DSW used a “reduction in force” to fire the older workers, and then retaliated against employees who refused to fire other workers based on their age.

DSW issued a statement in which it denied engaging in age discrimination, insisting it settled the case to avoid the costs of litigation. “Those difficult decisions were driven by economic volatility and were in no way influenced by the age of associates,” the company said.

Charges filed with the EEOC under the Age Discrimination in Employment Act have increased about 36 percent since 1997, from 15,785 to 21,396. The number of complaints reached an all-time high of 24,582 in 2008.

The case, EEOC v. DSW Inc., Civil Action No. 14-cv-07153, was filed in the U.S. District Court for the Northern District of Illinois.

Corporations v. Long-Term Unemployed

Picture of America’s Priorities

Two reports came out last week that paint a graphic portrait of America’s questionable priorities.

The General Accounting Office (GAO) reported that for tax year 2010 (the most recent information available), profitable U.S. corporations paid U.S. federal income taxes amounting to about 13 percent of the pretax worldwide income that they reported in their financial statements. This is, of course, well below the U.S. statutory corporate tax rate of 35 percent.

The second report was from the National Employment Law Project, which found that across-the-board federal budget cuts known as sequestration have resulted in a 15 percent loss of federal benefits to the nation’s long-term unemployed. The average weekly payment for workers who have been out of a job longer than six months was cut from $289 to $246. That reflects a total loss of $172 in their monthly income.

“Congress’s first priority should be job creation and restoring opportunity through work for the millions who remain unemployed,” said NELP Executive Director Christine Owens. “Yet Congress has made an uphill climb for the long-term unemployed even steeper.”

The federal budget cuts took effect in March and cut $2.4 billion from the benefits paid to the long-term jobless under the Emergency Unemployment Compensation (EUC) program. The program pays jobless benefits to unemployed workers who have exhausted state unemployment benefits, which typically have a 26-week limit.

Maryland was among the states facing the deepest cuts because of the sequester. Average weekly benefits there were slashed from $325 a week to $253 — a 22 percent cut.

Besides Maryland, the states with the highest-percentage reductions for EUC benefits are New Jersey, where payments are down 22.2 percent; Montana, where they are down 19.6 percent; and Connecticut, where they were slashed by 19.2 percent

In North Carolina, lawmakers chose to end all federal EUC benefits on July 1. The move cut off emergency jobless payments to an estimated 70,000 people, even though the state has the fifth-highest unemployment rate in the nation.

Who are they?

The nation’s unemployment rate includes individuals who are in the labor market but does not capture underemployment—the eight million part-time workers who would rather be working full-time. Additionally, there are 6.8 million discouraged workers who want to work but who have stopped looking. NELP estimates there are 27 million unemployed or underemployed workers—over two times more than the official number.

Here is a NELP chart that sheds light on the characteristics of the long-term unemployed: :

NELP reports that older unemployed workers suffer the highest percentage of long-term unemployment of all age groups, with more than half of unemployed workers ages 45 and older out of work for longer than 27 weeks.

Older unemployed workers, many with mortgages and families to support, cannot save for retirement and are more likely to fall back on already strained disability, medical, and income support programs.

According to NELP, the United States is approaching the sixth straight year of continuous high unemployment.

Politics Faulted for Loss of Good Jobs

A new report by the Center for Economic and Policy Research says fewer American workers today have a “good job” compared to the past, largely because of policy decisions that have undercut labor.

According to the report, Where Have All the Good Jobs Gone, fewer than a quarter of American workers have a “good job.”

A good job is defined as one that pays at least $37,000 per year, has employer-provided health insurance and an employer-sponsored retirement plan.

The report states that one-fourth (24.6 percent) of the workforce in 2010 (the most recent year for which data are available) had a “good job.” This figure was down from 27.4 percent in 1979.

The report’s authors, John Smith and Janelle Jones, attribute the decline in good jobs to policy decisions, rooted in politics, that have resulted in a drastic loss of workers’ bargaining power and the restructuring of the labor market since the end of the 1970s.

They say the American economy has lost about one-third of its capacity to generate good jobs since 1979.

According to the report:

The share of private-sector workers who are unionized fell from 23 percent in 1979 to less than 8 percent today.
The inflation-adjusted value of the minimum wage today is 15 percent below what it was in 1979.
Several large industries, including trucking, airlines, telecommunications, and others, have been deregulated, often at a substantial cost to their workers.
Many jobs in state and local government have been privatized and outsourced.
Trade policy has put low- and middle-wage workers in the United States in direct competition with typically much lower-wage workers in the rest of the world.
A dysfunctional immigration system has left a growing share of our immigrant population at the mercy of their employers, while increasing competitive pressures on low-wage workers born in the United States.
Fiinally, leaders have placed increased emphasis on controlling inflation rather than achieving full employment.

“In our view, these policy decisions, rooted in politics, are the main explanations for the decline in the economy’s ability to generate good jobs,” state the authors.

The report says the data show only minor differences in the deterioration of the economy’s ability to generate good jobs between 2007, before the Great Recession began, and 2010, the low point for the labor market. The deterioration relects long-run changes in the U.S. economy, not short-run factors related to the recession or recent economic policy.

The report controls for the age and education of the American workforce.

* The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people’s lives.

All Work and No Extra Pay?

Employers Overwork Staff Rather than Hire New

The magazine, Mother Jones, has an interesting article in its July/August 2011 issue on the “dirty secret of the jobless recovery.”

After a sharp dip in 2008 and 2009, U.S. economic output has recovered to near pre-recession levels. The Economic Policy Institute reports that corporate profits are up 22 percent! However, these gains reflect increases in worker “productivity” and not new hiring.

In other words, after downsizing as a result of the recession, employers are now overworking their remaining employees rather than re-hiring the ones who were let go or creating new jobs. In a recent survey by Spherion Staffing, 53% of workers surveyed said they’ve taken on new roles at work, most of them without extra pay (just 7% got a raise or a bonus).

Not surprisingly, workers are suffering under the strain.

One part-time college teacher is quoted as stating:

“”I am exhausted … I can’t help my son with his homework because I am grading papers until late into the night. I get up very early during the week, skip lunch to save not money but time, and the workload never lets up. My employer uses and abuses full-time employees even more so than those of us that are hourly. My supervisor, for example, runs a large department. He was just promoted to a new, even more demanding position, but his position running the department will not be filled. He will now be doing what is a 60-to-70-hour job ‘on the side.’”

The magazine says Americans put in an average of 122 hours more per year than the British and 378 hours (nearly 10 weeks!) more than Germans. The differential isn’t solely the result of longer hours—workers in most other countries have, at least on paper, a right to weekends off, paid vacation time and paid maternity leave. (The only countries that don’t mandate paid time off for new moms are Papua New Guinea, Sierra Leone, Liberia, Samoa, and Swaziland and the United States!)

Legislators should be concerned about the implications of this situation on the health and welfare of American workers and their families. Stress is believed to play an important role in several types of chronic health problems-especially cardiovascular disease, musculoskeletal disorders, and psychological disorders. Also, according to the Journal of Occupational and Environmental Medicine, health care expenditures are nearly 50% greater for workers who report high levels of stress.