Age Discrimination: A Costly Workplace Practice

Ageism is often discussed as the last remaining “ism” that is overlooked or even accepted in American society. It’s in advertising, when only young people are seen using the latest technology, driving a cool car, or wearing trendy clothes. It’s in the grocery store birthday card aisle, where most cards poke fun at getting older and note that things can only go downhill. Is it any wonder we continue to see ageism in workplaces across America?

Just How Much Age Discrimination Is There?

Age discrimination is common in workplaces in the U.S. AARP Research found that in 2020, 78 percent of older workers had seen or experienced age discrimination in the workplace. The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws against job discrimination and harassment, including the Age Discrimination in Employment Act (ADEA). The ADEA provides protections for older workers—defined as ages 40 or older—from discrimination on the basis of age in hiring, promotion, discharge, compensation and benefits.

In FY2020, the EEOC received more than 14,000 age discrimination claims and obtained $76.3 million in monetary benefits for claimants. This figure does not include monetary benefits obtained through litigation or state and local claims.

Examination of recent EEOC settlements reveals that age discrimination claims are not concentrated in any particular industry or sector. Federally funded partnership organizations, state agencies and private employers from a range of industries have been involved in recent settlements. Technology, transportation, retail, sales, broadcasting, scientific, manufacturing and health services are among the industries covered by recent EEOC settlements.

The EEOC obtained $76.3 million in monetary benefits for age discrimination claimants in FY2020.

Job placement agencies have been held accountable when they fail to put forth job applicants because of their age. Two transportation services employers that terminated drivers because the companies did not have insurance policies that covered them were held accountable for age discrimination. In other instances, older workers are often displaced by new managers who seek to hire younger workers. These managers are often younger themselves.

Age Discrimination Costs the Economy Billions in Lost Productivity

AARP and The Economist Intelligence Unit estimate that the U.S. economy lost $850 billion in productivity in 2018 as a result of age discrimination. That number is projected to increase to $3.9 trillion in 2050 unless action is taken to eliminate age discrimination. When older workers are laid off, they often face difficulty finding a new job. This may lead them to exit the labor market or to accept a position with lower pay and benefits. Other forms of age discrimination occur when older workers are not promoted or included in training and development opportunities. Whatever the form, age discrimination costs older workers money that could be used for consumption of goods and services to help fuel the U.S. economy.

Age Discrimination Comes at Great Personal Cost

The World Health Organization recently released its Global Report on Ageism. The report highlights the fact that ageism has many impacts on the health of older adults including shortening lifespans and worsening physical and mental health. The mental health impact of job loss has been studied for many years. The Covid-19 pandemic has also created much uncertainty and stress that only adds to the anxiety and depression that affects many older jobseekers. When older workers face age discrimination in their search for work, the stress and anxiety of unemployment are prolonged as older workers face longer spells of unemployment than younger workers. Think about it. By removing ageism as a barrier to employment, we may help improve physical and mental health status of many older workers. This is an incredible opportunity.

How Do We Fix This?

There are several ways to address age discrimination in the workplace. One way is by passing stronger laws to protect older workers. Two bills passed the House of Representatives in 2021 that would help.

The Protecting Older Workers Against Age Discrimination Act of 2021 (POWADA) would restore the burden of proof to bring an age discrimination claim as it existed prior to 2009. Since then, age discrimination claims require plaintiffs to prove that age discrimination is the sole basis for an adverse action, rather than one of the factors. These age claims require a higher burden of proof than other types of claims based on sex, race, religion or national origin.

‘By removing ageism as a barrier to employment, we may help improve physical and mental health status of many older workers.’

A second bill, the Protect Older Job Applicants Act, would clarify that older job applicants can challenge disparate impact claims about discriminatory hiring practices under the ADEA. As of this writing, neither bill has passed the Senate.

Employers also can play a role in ending age discrimination by adding age as a dimension to their diversity, equity and inclusion strategy. Doing so would provide a much needed spotlight on age inclusion in the workplace.

One strategy is to provide training on age bias, so workers and managers can learn about ways to avoid bias and become more age inclusive. Hiring managers also can learn how to mitigate bias in the hiring process using structured interviews and diverse interview panels. Managers should encourage intergenerational collaboration by building mixed-age teams whenever possible. Most importantly, encouraging a climate of understanding and open communication will lead to higher levels of engagement, and ultimately, higher productivity.

The age discrimination problem is far from over. But strengthening laws, along with private-sector focus on age diversity and inclusion will help to eliminate the last acceptable “ism” in the workplace and in society at large.

Lori A. Trawinski, PhD, is director, Finance and Employment, at the AARP Public Policy Institute in Washington, DC.