Age Discrimination in Employment in the US - Research Paper Example

AGE DISCRIMINATION IN EMPLOYMENT IN THE U.S Xuan Gan 11/30 Intensive American Language Center Age discrimination suits are the fastest growing category of discrimination charges filed with the United States Equal Employment Opportunity Commission (EEOC). In “The Statement of Jacqueline A. Berrien, Chair, U.S EEOC,” EEOC (2010) noted that in the fiscal year 2008, age discrimination charges rose by 30% from 19,103 in 2007 to 24,582 representing 26% of all charges to EEOC. This is despite the existence of the Age Discrimination in Employment Act of 1967 (ADEA) which is enforced by EEOC. In “Equal Employment Opportunity: Age Discrimination,” Solis Hilda (2008) observes that ADEA prohibits discrimination on the basis of age in terms, conditions and privileges of employment such as hiring, promotion, termination, training, compensation and benefits. Despite this, employers find themselves stereotyping old age which according to the Act is any applicant or employee aged 40 years and above and hence discriminating against such employees. In “Age Discrimination by Employers,” Segrave Kerry (2001) argues that age discrimination is rampant in the most centralized and fastest growing industries. Age discrimination at work environment in the U.S is a result of the financial risks that older people present for companies due to lack of productivity, increased health insurance costs and high salaries. Productivity in employment is associated with high performance organizations and employees. It is achieved through use of high skilled, committed and motivated employees. Most employers view old people as having deteriorating physical and mental abilities hence unable to perform their jobs effectively despite the fact that some old people have the ability to perform better than young people. The nature of work keeps on changing as the economy moves from manufacturing to service sector. Most jobs thus require use of technology as opposed to manual skills held by older people. Young people are able to keep up with advancing technology as opposed to the old people who are nearing retirement age and hence see no need in investing in skill advancement. If they happen to lose their jobs, it is difficult for them to be absorbed in the job market due to lack of the required skills. For example, since the introduction of computers most jobs that require tedious paper work have been simplified. Information is recorded in the computer where it can be retrieved easily and large amount of work can be done with less time hence improved productivity. However, not many old people have learnt computer technology thus making their skills obsolete. The young people are thus considered for hiring and promotions as opposed to the older employees. For example in “Age Discrimination in the American Workplace: Old at a Young Age”, Gregory Raymond (2001) noted that studies conducted reveal that 50% of job openings in America are closed to applicants aged 55 and above while 25% are closed to those aged 45. In “Behavioral Aspects of Business Ethics: The Politics of Age Discrimination in Organizations”, Ferris G & King Thomas (1992) argue that some supervisors carry out biased performance evaluations giving older people lower ratings thus denying them an opportunity for promotion and also make it difficult for them to secure and retain jobs. Due to globalization, companies face challenges of keeping pace with constantly changing environments and technological advancements. They need to increase productivity and maintain a competitive advantage in the global market. Employees thus need to acquire new skills and advance technologically so as to be more competent and productive. In “Age Discrimination in Employment Legislation: The United States Experience”, McCann Laurie (2010) argues that older workers are perceived to be resistant to change and slow in acquiring new skills and technology. In this case, they are discriminated against in training activities and this bars them from skill advancement therefore are not able to perform their jobs effectively. Young workers are preferred because they are eager to learn and acquire new skills for better job performance. For example in “Statistical Evidence in Discrimination Cases,” Gastwirth Joseph (1997) noted that in the case of Graffam versus Scott Paper Company, five older employees were laid off on the basis that they had not learnt the latest computer programs nor attended company schools and yet the company did not show that five younger workers with less assessment scores who were retained had the desired characteristics (301). In “Age Discrimination in Layoffs: Factors of Injustice”, a study conducted by national council on aging found that 50% of employers surveyed believed that younger workers perform better than older workers (Henry Eleanor & Jennings James 2004). This stereotyping is what prompts age discrimination. McCann (2010) argues that old people lack interest and motivation to work and as a result they want to retire early. A motivated workforce is essential to a company as it enables employees to gain commitment on their jobs and work harder to achieve company goals. According to Segrave (2001), young people can work harder and for longer hours than older people hence are preferred. Older people also frequently absent themselves from work due to illnesses and this greatly impacts on their performance. It is also a loss to the company due to production hours lost during their absence and payment of sick leave. Older people are also considered less creative especially due to lack of interest and motivation and this does not contribute to a company’s productivity. For example in the case of Graffam versus Scott Paper Company, five older employees were laid off on the basis that they had not volunteered for overtime, were unwilling to do other jobs and were unable to complete sufficient work (Gastwirth 1997, 301). In “Health Insurance Options”, Reference for business (2010) notes that health insurance is offered by insurance companies to individuals or groups after payment of premium on a regular basis and in turn the insurance company covers their healthcare costs. The older Workers Benefit Protection Act of 1990 prohibits denial of benefits to older people which according to McElrath Jessica (2010) in “Health Insurance and Age Discrimination” includes; life insurance, health insurance, pensions and retirement benefits. Companies incur high costs in providing health care for the old. For example, in “Age Discrimination in Healthcare”, Wright Hardy (2009) observes that the average annual medical expenses for people aged 18-44 was $2,079 compared to $4,866 for those aged 45-64 according to the federal research data. Older people present more challenges in acquiring health insurance policies. Most insurance companies refuse to offer health insurance service for old people since they are at high risk of incurring healthcare costs. Companies are thus faced with difficulties in dealing with old people and hence discriminate them. Segrave (2001) noted that insurance firms were refusing to offer policies for men aged 50 years and above and as a result, companies found it difficult to employ them. The healthcare reform bill does not give any reprieve to employers. It allows insurance companies to age discriminate hence insurance companies charge the older customers twice as much as is charged to the young customers The Age Discrimination in Employment Act permits discrimination in benefits if the cost of providing the benefit to older people is more than cost of providing the same to the younger people (Solis, 2008). The company follows the ‘equal benefits or equal cost’ rule and therefore pays equal cost for providing benefits to the older and younger workers by reducing the benefits for the older workers. For example, same amount is paid for health insurance premiums but the older workers receive less coverage. If the health plan is voluntary, the older worker pays more in order to receive full coverage. A company may also offer the older worker the option of withdrawing from the benefit plan or have his/her coverage reduced but should not force the older worker to pay more for the health benefit. The premium cost for the older workers should be the same as for the young workers but the younger workers receive more benefits. Reference for business (2010) argues that older people are married and also have dependent children hence prompting the company to apply for a more comprehensive health insurance policy than it would have if the workforce consisted of young, unmarried and childless workforce. This adds to the financial costs of the company and hence the company may encourage the older workers to retire early thus reducing such costs. For example, Donald Ewing was laid off by Ashford Aeronautical and lost his health benefits since he had two years left before attaining the points needed to earn such benefits (Henry & Jennings, 2004). In “The Aging of the American Workforce: Problems, Programs, Policies”, Bluestone, Montgomery and Owen (1990) argue that age is related to experience and productivity and consequently earnings. Many companies tend to increase wages annually depending on employees performance, skills, and experience among others. Older employees have worked for a long period of time and gained on-the-job experience as well as their personal qualifications as opposed to the young workers who are mostly fresh graduates from college. As noted in “Age and Work Performance in Non managerial Jobs: The effects of Experience and Occupational Type” by Avolio, Waldman, and McDaniel (1990), experience is a better predictor of performance than age. Due to their experience, the older people thus are eligible for higher salaries which are an extra cost to the company and the aim of many organizations is to minimize costs so as to improve profitability. This would therefore prompt the management to terminate the services of older people. For example, Henry & Jennings (2004) noted that Ewing had worked for Ashford Aeronautical for the longest time and gained a lot of experience and was among the highest paid employees. However, to meet its strategic profit objectives for the year, the company decided to lay off the highest paid workers who also consists those with longest working history and hence Ewing was fired. He filed an age discrimination complaint and was paid $410,000 as compensation. Older workers are experienced and aware of labor laws hence not favored by employers as they are presumed to influence the younger workers. Younger workers work for long hours with less pay, are added responsibilities with no compensation and don’t claim workman compensation when hurt due to lack of knowledge of labor laws. McCann Laurie (2010) observes that in 1965 during the hiring process, approximately half of private job openings in the U.S were closed to applicants over 55 years and half were closed to applicants aged 45 years with women bearing the heavier burden. Women are discriminated in terms of their age and sex. He also notes that the older workers performance appraisal which is the basis for job promotion and salary increment is biased to discourage old workers from gaining higher salaries hence reduce financial costs. Another reason behind biased performance appraisals is that supervisors are uncomfortable supervising old people who are overqualified. For example in the case of EEOC vs. Mike Albert Leasing, Inc, it was established that unrealistic goals were given to older employees during performance appraisal and they were fired on that basis (EEOC, 2010). Age discrimination in employment in the U.S is prohibited and punishable by law, all employees are entitled to equal opportunities unless in rare cases when extra costs are involved. Despite the legislation, age discrimination is prevalent at work environment in the U.S due to the financial costs associated with employment of older workers. Employment decisions are based on stereotyped characteristics of the older workforce prompting discrimination in activities such as hiring, promotions, terminations and such other activities. Older people are viewed as less productive due to deteriorating physical and mental abilities, are less flexible, are slow learners and are expensive to maintain. They add extra costs to the company in terms of health insurance, high salaries and low productivity thereby prompting age discrimination in favor of the young. References Avolio, B., Waldman, D. & McDaniel, M. (1990). “Age and Work Performance in Non managerial Jobs: The effects of Experience and Occupational Type”. Academy of Management Journal, Vol. 33(2), pp. 407-422. Bluestone, I., Montgomery, R., Owen, J. (1990). The Aging of the American Workforce: Problems, Programs, Policies. Michigan: Wayne University Press. EEOC. (May, 2010). Statement of Jacqueline A. Berrien, Chair, U.S EEOC, before the Committee on Health, Education, Labor and Pensions United States Senate. Retrieved November 22, 2010 from http://www.eeoc.gov/eeoc/events/berrien-protecting-older-workers.cfm. Ferris, G., King, T. (1992). “Behavioral Aspects of Business Ethics: The Politics of Age Discrimination in Organizations”. Journal of Business Ethics, Vol. 11(5-6), pp. 341-350. Gastwirth, J. (1997). “Statistical Evidence in Discrimination Cases”. Journal of the Royal Statistical Society, Series A (Statistics in Society), Vol. 160(2), pp 289-303. Gregory, R. (2001). Age Discrimination in the American Workplace: Old at a Young Age. New Jersey: Rutgers University Press. Henry, L & Jennings, J. (2004). “Age Discrimination in Layoffs: Factors of Justice”. Journal of Business Ethics, Vol. 54 (3) pp 217-224. McCann, L. (2010). “Age Discrimination in Employment Legislation: The United States Experience”. Retrieved November 17, 2010 from http://www4.pmb.ro/wwwt/pactivi/Documente%20europene/adea_paper.pdf McElrath, J. (2010). ‘Health Insurance and Age Discrimination’. eHow, Inc. Retrieved on November 23, 2010 from http://www.ehow.com/facts-6817047-health-insurance-age-discrimination.html Reference for Business. (2010). “Health Insurance Options”. Encyclopedia of Business, 2nd ed. Retrieved November 18, 2010 from http://www.referenceforbusiness.com/small/Eq-Inc/Health-Insurance-Options.html Segrave, K. (2001). Age Discrimination by Employers. North Carolina: McFarland. Solis, H. (2010).” Equal Employment Opportunity: Age Discrimination”. US Department of Labor. Retrieved November 17, 2010 from http://www.dol.gov/dol/topic/discrimination/agedisc.htm Wright, H. (2009). ‘Age Discrimination in Healthcare’. Allvoices, Inc. November 23, 2010. http://www.allvoices.com/contributed-news/4262682-age-discrimination-in-health-care. Read More