America faces a big problem: the baby boomers are getting older. In the coming years, the retirement-age population will reach its highest ever figure, leading to dwindling social security funds, overwhelming nursing homes, and leading to labor shortages in its wake.
Larry Fink, 71, CEO of asset management giant BlackRock, proposed a two-part solution to the looming pension crisis in his annual letter to shareholders in March. To avoid economic catastrophe, he argued, people should save more and work longer. “What if government and the private sector treated over-60s as late-career workers with a lot to offer rather than people who should retire?” Fink wrote. The current Social Security retirement age is 67, but most Americans leave the workforce earlier than that. If more people continued working into their 60s and 70s, the looming crisis would ease.
In some ways, Fink’s solution seems interesting, even sensible: Many able-bodied and energetic septuagenarians are happy to keep their jobs and contribute to the economy, so why not encourage more people to do the same?
The problem is that his plan neglects a few key realities. On the one hand, many older people cannot work because of a disability or because they have to care for another disabled person. The second is that those who are willing and able to work are often unwanted. Despite the legal ban on discriminating against people aged 40 and over in the workplace, this practice remains common.
Instead of allowing Americans to save for retirement and work as long (or as little) as they want, Fink sets up a catch-22 situation: the economy needs aging Americans to work longer, but many companies simply don’t want to. them.
In Texas, Daniel Ross has been busy. As a founding partner of Ross Scalise Employment Lawyers, an Austin firm that represents people who face age discrimination, that’s not necessarily a good thing. Over the past five years, he said he’s noticed an increase in age discrimination cases, particularly those alleging wrongful termination. “Here in Austin, we have a lot of jobs and tech companies,” he said. “They want to look younger.”
In 2023, a Society for Human Resources Management survey found that 30% of workers felt discriminated against because of their age at some point in their career.
“This is absolutely not good at a time when we still have many more jobs to fill and people trained to fill them,” Emily Dickens, SHRM government affairs manager, said of the results of the investigation.
We have a group of people who apparently only hire their own age group, because they seem to be biased against people younger and older than them.
Stacie Haller, Chief Career Advisor at ResumeBuilder.com
According to the United States Chamber of Commerce, there are 8.5 million jobs available in the United States and only 6.5 million unemployed people looking for work. The shortages span several sectors, with healthcare, hospitality and business services such as accounting topping the list of most vacant positions. In the Texas tech scene, job openings are on the rise. But despite the shortages, many companies are reluctant to fill their open positions with older people.
Patrick Button, an economics professor at Tulane University, has done extensive work on employment discrimination, primarily through what are called resume-matching field experiments. These studies involve creating fictitious resumes that vary in several ways and using them to apply for job openings. The number of callbacks each resume receives indicates the employer’s response to that type of worker.
One of Button’s studies was on “transitional jobs,“Part-time jobs in government or retail that many people use to ease their way into retirement and protect their finances.” The opportunity to obtain this type of employment is a mechanism that people older people use to work longer and then ensure better security in retirement. ” Button said. He and his co-authors sent out 40,000 resumes that they wrote to represent different age groups: young workers between 29 and 31, middle-aged workers between 49 and 51 and older workers between the ages of 64 and 66 in administrative, retail, security and janitorial positions – all typical transitional jobs that attract candidates from all demographic groups.
Among women, they found a 3 percentage point drop in CV responses around age 50, with a significant decline around age 65. For men, the decline appeared at age 65. The results were clear: “There is a significant amount of age discrimination in the ability to accept these jobs, particularly against older women,” Button told me.
Other studies have found a similar trend: A 2024 survey of 1,000 hiring managers by ResumeBuilder.com, a website that helps people write resumes, found that more than a third of people Respondents admitted to being biased against candidates over 60 and Gen Z. candidates.
“We’re in a situation where we have a group of people who are apparently only hiring their own age group, because they seem to be biased against those who are younger than them and older than them” , said Stacie Haller, chief career advisor. on ResumeBuilder.com, told me.
Several companies have recently come under fire for explicit age bias. A 2018 investigation by ProPublica and Mother Jones found that IBM implemented an express, top-down program from 2013 to 2018 to fire workers over 40 and replace them with workers under 40. The Equal Employment Opportunity Commission concluded that there was “reasonable cause” to believe that IBM discriminated against certain employees because of their age. The case is ongoing.
Sure, we’ve all been told that life isn’t fair – usually by the people who hold all the cards – but the system isn’t designed to help people work longer or save more money .
In 2023, pharmaceutical company Lilly was ordered by the EEOC to pay a $2.4 million fine for a program it implemented between 2017 and 2021 to attract “early career” salespeople. , which provided incentives for managers to hire people under 40. San Diego’s Scripps Medical Clinic was ordered to pay $6.9 million for setting a mandatory retirement age of 70 for doctors, regardless of their interests or abilities.
But more often, the discrimination is less explicit. Ross, the age discrimination lawyer, said most of his cases involve circumstantial evidence. He told me that people who would never think of making remarks about race, gender, or religion would casually joke about old people, ask people when they are retiring, or contribute in some other way to make an older colleague feel unwelcome. Often, he says, this kind of circumstantial evidence helps him build cases.
Age discrimination occurs for a multitude of reasons. We live in a youth-obsessed culture, and gray hair doesn’t reflect a company’s brand image. Employers may assume that older workers have health problems and therefore need more time off or are disconnected from rapidly changing technology. Some managers don’t know how to talk to their old reports. And some older workers have already heard all the company buzzwords and chatter, so they don’t buy into management’s slogans, which makes them “difficult.”
“Companies want to create a younger workforce. And I think one of the reasons they want to do that is because they look like a younger workforce to customers and employees prospects who, statistically, will be under the age of about 40,” Ross said. .
In an ideal world, older workers would be able to retire in peace, leaving younger generations to keep the country’s economic engine running, while they enjoy a well-deserved break. But increasingly, retirement-age Americans are stuck between a rock and a hard place. They can’t retire when they want because they don’t have enough money saved. But they also can’t continue working because companies don’t want them.
Larry Fink is right: most industrialized countries have not prepared for the economic impact of population aging. In the United States, the Silent Generation and older baby boomers have enjoyed relatively wealthy retirement and health care benefits. But for most retirees, that’s simply not enough. Less than half of baby boomers have enough retirement savings, and a fifth say they have none at all. Already, Americans of retirement age are struggling to get by, counting on working until age 70 to maximize their meager savings.
The problem with Fink’s assessment is that it simply isn’t realistic. It asks people who are not yet retired to work longer than their elders and save even more money, without changing the systematic barriers. Sure, we’ve all been told that life isn’t fair – usually by the people who hold all the cards – but the system isn’t designed to help people work longer or save more money . Already, younger generations are panicking about how much money they need to save to retire.
For Fink and other members of the executive class, the dilemma is: They can either pay workers more and let them work longer so they are better prepared for retirement, or they can pay more taxes. so that the government can offer better pensions. benefits that allow people to stop working when they need to.
They can’t have it both ways. If they ignore the problem and do nothing, they will leave the average person to live out their golden years in a poor financial situation – thus triggering an economic disaster for everyone.
Ann C. Logue is a writer specializing in business and finance. His most recent book is “Options Trading”. She lives in Chicago.