In 2003, a 54-year-old executive named Jack Gross faced a painful, age-based problem at work. The insurance company that had employed him for more than three decades was shifting duties to younger workers as part of a reorganization. Older employees—like Gross—could take buyouts or accept demotions.
He sued under the Age Discrimination in Employment Act (ADEA), which is supposed to protect workers who have reached age 40. After years of litigation, in 2009, Gross’s case reached the U.S. Supreme Court. But instead of gaining a victory for fairness, the case that bears his name now stands out as an epic setback. The Court’s 5–4 decision actually made it harder for victims of age discrimination in the workplace to get justice.
The legal issue raised by Jack Gross has never been more relevant than it is today.
In June 2021, the U.S. House passed the bipartisan Protecting Older Workers Against Discrimination Act (POWADA), which would significantly strengthen the ability of employees to win age-discrimination lawsuits. At this writing, that important legislation is stalled in the Senate. Yet age discrimination remains a widespread problem that is harmful both to individuals and to the larger economy, particularly as America seeks to heal the financial wounds of the pandemic.
Prior to the Gross case, an employee who brought suit under the federal ADEA had to prove that age bias was just one of the factors that influenced their employer to take an adverse action, such as a layoff or demotion. (Proving even that much can be difficult.) This was essentially the same legal standard required in complaints of bias based on race, gender and religion.
Age discrimination is a pervasive fact of life for older workers, undermining long-term financial security.
But in Gross v. FBL Financial Services Inc. the Supreme Court ruled that it no longer was enough for an employee to establish that ageism was just one of the factors that motivated an employer’s adverse action. Employees now had to prove that age bias was the chief factor, a much more challenging burden of proof.
The POWADA bill would, in effect, undo the Supreme Court ruling that gives plaintiffs an exceptionally difficult burden of proof, and once again enable them to win cases by showing that ageism was one of the factors that influenced their employer.
Society Also Pays a Price for Ageism
This really matters. Research by AARP and others has established that age discrimination is a pervasive fact of life for older workers, frequently undermining opportunities and long-term financial security.
According to AARP research in late 2020, almost eight in 10 workers ages 40 to 65—78 percent—have experienced or seen age discrimination in the workplace. The findings apply across population groups, including African Americans, Hispanics and women.
Separately, a study by ProPublica and the Urban Institute, based on data from about 20,000 individuals ages 50 and older, found that more than half were “pushed out of longtime jobs” before they had intended to retire. Such career disruptions can permanently affect an individual’s quality of life and add stress to their later years. Even if they manage to get work, the overwhelming majority of employees who lose their longtime jobs end up making less money than they did before.
Unfair as this is for individuals, we should also consider the large price that society pays for age discrimination. A growing body of evidence shatters the negative stereotypes and misunderstandings about older workers, while also clarifying the many strengths that experienced employees bring to the workplace.
An initiative by AARP, the World Economic Forum and the Organization for Economic Cooperation and Development has gathered evidence that organizations with a multigenerational workforce are rewarded with greater productivity, talent and resilience. Mature workers contribute to intergenerational learning and rich collaborations, while also providing stability to organizations because they are less likely than younger employees to move on.
Age Discrimination Comes at a High Economic Cost
It thus follows that when employers limit contributions from older workers, they hurt themselves and the broader economy.
This is not just an abstract principle. At AARP we calculated the economic cost of age discrimination, based on how much it depresses the labor force participation of workers ages 50 and older. Our researchers found that ageism subtracted $850 billion from the U.S. Gross Domestic Product in 2018 alone. More than half that loss was through involuntary retirements of older workers, including many women. The other major drivers were underemployment and unemployment of older workers. We project future losses due to age discrimination could reach trillions of dollars.
These findings bear directly on America’s current economic situation and the status of POWADA in Congress.
As the U.S. economy struggles to rebound from the COVID-19 pandemic, it needs the skills and energy of all available workers. Yet employers in many industries have had unexpected difficulty in filling openings.
‘Employers should recognize that older workers are a key to resilience in a post-pandemic economy.’
We also know that many older workers have been pushed into retirement during the pandemic—1.7 million by one measure. Instead of pressuring older workers to retire, or overlooking them for new opportunities, employers should recognize that they are a key to resilience in a post-pandemic economy. Experienced workers are a solution, not a problem, given all they have to offer in personal maturity, stability and know-how. Policy should encourage their labor force participation.
More than 10 years ago, Jack Gross told Congress: “I hate having my name associated with the pain and injustice now being inflicted on other older workers because it is now nearly impossible to provide the level of proof that is required by this Court.”
Those words remain as true as ever. They are especially important in a time of labor shortages where every worker counts. POWADA is a golden opportunity for lawmakers to address this problem. Yet it represents something even larger: Congressional passage of this vital legislation would be a long overdue step for justice in the workplace.
POJA Expands ADEA Protections to Job Applicants
The Protect Older Job Applicants Act (POJA), H.R. 3992, is an important, commonsense and bipartisan bill passed by the U.S. House of Representatives on Nov. 4. Previously, the Age Discrimination in Employment Act (ADEA) protected older Americans on the job—but not those looking for one.
POJA corrects this gap, amending the ADEA to specifically prohibit employers from limiting, segregating or classifying job applicants based on their ages. Americans ages 50 and older already have a harder time finding work compared to their younger counterparts, and nearly half of them experience long-term unemployment. Everyone deserves an equal opportunity in applying for a job, free from the impacts of discrimination. POJA, now pending before the United States Senate, is a strong step in the right direction.
Nancy LeaMond is executive vice president and chief advocacy & engagement officer at AARP in Washington, DC.