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Wednesday, January 9, 2019

Ageism in the Workplace Affects Multiple Generations
Time to Sound the Alarm Bells

It looks like age discrimination in the workplace is finally getting more public exposure. The video clip below, taken from the CBS "This Morning" program, provides a glimpse to this incredibly important issue, currently affecting mostly workers who are 40 years old or older. Seemingly, only older workers are being directly affected at the present time; however as we examine the facts more closely, we can see that the dire side effects of age discrimination are going to affect the economy of all generations of Americans equally badly. In addition, let us not forget that everyone gets older everyday and the process of aging is irreversible. It is clear that employers lay off older workers in order to reduce the cost of labor and not because such workers do not bring great value to the business.



The Millennials' Trap

By taking workers who are older than 40 but younger than retirement age (67) out of the workforce, or even by just forcing their income to be significantly reduced, the major burden of maintaining the economy for the general population, over the next few decades, will fall on the "millennial" generation.

Studies of company layoffs, conducted over that last few years indicate that among workers older than 40 years, women are further affected than men as they get laid off at an earlier age. The most insidious aspect of age-based layoffs is the skewed statistics of executive layoffs. While most workers as well as low and mid-level managers are subject to age-based layoffs, the "executive class" in most companies enjoys great on-the-job longevity and even reaps benefits from employee layoffs. Such executive benefits are realized in the form "efficiency bonuses" that executives receive, due to their initiation of "head cutting" actions...

The Equal Employment Opportunity Commission (EEOC), which is the Federal agency, in charge of enforcing anti-discrimination laws in employment, seems to be very weak in pursuing age-based discrimination cases. However, the real culprit is the U.S. Congress, controlled by highly paid "special interest" lobbyists who insured that laws protecting age-based discrimination would remain weak and very difficult to enforce. Though there were several attempts to revise the laws and update the compensation that can be awarded to proven victims of age-discrimination, a long succession of proposed Bills to revise the applicable laws have met their silent death in the U.S. Senate. The latest of these proposed Bills in Congress is H.R.6811 - Age Discrimination in Employment Parity Act of 2018. A similar U.S. Senate Bill S.443 - Protecting Older Workers Against Discrimination Act remains buried in committee...

Among other things, the compensation levels awarded to age-discrimination victims remained unchanged since 1967. Due to the significant inflation that the U.S. economy underwent since 1967, the compensation amounts set for victims by the existing laws look completely ridiculous by today's standards and have never been indexed or revised. Consequently, very few employment attorneys are willing to take on the case of age-discrimination victims, since the litigation costs would typically exceed the monetary recovery expected after successful litigation. The outcome of keeping the current laws very weak, outdated and unchanged, results in employers firing older employees en-mass and with almost complete impunity. Legal challenges are very rare and Government enforcement of the laws through the EEOC is a long and convoluted process. Without a "sheriff" in town, employers are left unchecked to violate civil rights of older workers at will.

World Leading Economies 2030 GDP Projections
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Considering the demographic trends of the U.S. population over the next 20 years, we are going to see tremendous unemployment and poverty replacing the relative prosperity that we see today. As more older employees are forced out of the workforce or delegated to take significantly lower paying jobs, the U.S. economy, which is predominantly controlled by consumer spending (see table below), is bound to sink to levels never seen before. Considering that there are credible predictions for China (and very likely, also India) replacing the U.S. as the world leading economies by 2030, we have very little time to prepare for the future.

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You do not need to be an economist to understand that unemployed or low-paid workers may not have extra money to spend and consequently consumer spending will be sharply curtailed. This growing portion of the population will also not be able to contribute much to government revenue in the form of tax payments to finance necessary public services. Consequently, it is not hard to predict that a regenerative process of sinking of the U.S. economy is bound to happen sooner or later, if employment policies that utilize age discrimination are going to be left unchecked due to legislative neglect. Demographic trends cannot be waved off or ignored in the same manner as climate change, obviously they are mankind made...

(click on image to expand detail)

By taking workers who are older than 40 but younger than retirement age (67) out of the workforce, or even by just forcing their income to be significantly reduced, the major burden of maintaining the economy for the general population, over the next few decades, will fall on the "millennial" generation.


(click on image to expand detail)

Millennials currently form about 35% of the U.S. workforce and many of them are already heavily burdened by student debt. Expecting millennials to pay the tax money required to support the needs of a significantly growing older population is not only an unfair concept, but it also works against the common sense of enabling older workers to continue earning money to cover their needs on their own, all while paying taxes on their earned income.

Age discrimination in employment is therefore a corrosive practice that affects not only older workers; it affects younger workers and their economic future prospects, just as much.

It is time to break the glass and push the alarm button now, before a major crisis is hitting us in the face. Call your U.S. representatives and tell them that the time has come to install fairness and common sense into the U.S. labor policies and protect our civil rights.

--Dr. Flywheel

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