House Committee Considers Challenges Faced by Older Workers

At a House Committee on Education and Labor hearing, witnesses and lawmakers spoke about the issue of age discrimination in the workforce—agreeing that employers benefit from retaining older workers.

The House Committee on Education and Labor held a hearing to gather ideas for eliminating barriers to employment for older Americans and other groups, such as those who have been incarcerated and those with disabilities.

In opening the hearing, Committee Chairman Bobby Scott, D-Virginia, spoke about the range of obstacles that unfairly keep some groups from achieving their full employment potential, including age discrimination and discrimination against those with disabilities. He emphasized the employment challenges faced by men and women of color who have a criminal record.

Chairman Scott said Congress should act to address the fact that, when older workers lose their jobs, they are so much more likely than younger people to join the ranks of the long-term unemployed. He said he will continue advocating for legislation known as the Protecting Older Workers Against Discrimination Act (POWADA), which he described as a focused and timely proposal to strengthen anti-discrimination protections for older workers.

Scott first introduced the bill in February, joined by a bipartisan group of House members from across the U.S. As emphasized in the hearing, supporters say POWADA is necessary to respond to a Supreme Court decision from 2009, known as Gross v. FBL Financial Services. Witnesses and members said during the hearing that the Gross decision severely undercut the Age Discrimination in Employment Act (ADEA). Under the Gross standard, plaintiffs seeking to prove age discrimination in employment are required to demonstrate that age was the sole motivating factor for the employer’s adverse action. POWADA seeks to return legal standards to the pre-2009 evidentiary threshold to ensure all claims of discrimination are adjudicated fairly.

“Congress must again recognize that age discrimination is based on the faulty assumption that aging diminishes ability,” Scott said.

Notably, opening testimony from Ranking Member Virginia Foxx, R-North Carolina, pushed back against the need to expand federal government intervention in this area. She instead emphasized the need for the federal government to allow employers and private innovators to solve these important issues.

“History has shown us that it is not the federal government but the innovation of individual Americans that has broken down barriers to opportunity,” Foxx said. “Today, Democrats see barriers as opportunities to increase federal power. Republicans see them as a way to enable individual empowerment.”

The hearing featured testimony from Laurie McCann, senior attorney with the AARP Foundation. She advocated strongly for “POWADA.”

“Congress can emphasize that it is good business to recruit and retain talent regardless of age,” McCann said. “Research shows the 50-plus demographic is actually the most engaged group of workers, yet older workers are still discriminated against at an alarming rate. Undue discrimination is among the most significant barriers they face to financial security. It is disturbingly pervasive. Three in five older workers say they have seen or experienced such discrimination in their job.”

According to McCann, if an employee older than 50 loses his job, only one in 10 will ever get back to the same income level.

“This is directly because employers are less likely to call back older applicants for an interview, and for women, the issue is even worse,” McCann said. “The commendable efforts of some employers to do better are no substitute for strong legal protections at the federal level. We cannot emphasize enough how much the Gross decision has harmed older workers. Perhaps most disturbing, Gross has already been applied to other civil rights, anti-discrimination, and anti-retaliation cases. Lower courts have also applied the decision against plaintiffs in disability cases, as well.”

Older employees want more support

In a 2017 report to the U.S. Senate Special Committee on Aging, the Government Accountability Office (GAO) recommended that employers adopt phased retirement programs, so that they will not suddenly lose the knowledge and experience of Baby Boomers. GAO also pointed to the benefits such programs could deliver in terms of financial stability and community engagement among older Americans. However, only 15% of workers between the ages of 61 and 66 were semi-retired that year, according to the report.

The report reviewed a contemporaneous Society for Human Resource Management (SHRM) survey that found only 5% of its membership base offered a formal phased retirement program. However, 11% offered an informal phased retirement program. Among large employers, those with 2,500 to 9,999 workers, 16% offered a formal phased retirement program. GAO said nine of 16 experts interviewed alongside the survey explained that industries with skilled workers or labor shortages are generally more motivated to offer phased retirement because their workers are hard to replace. Consulting, education, government, utilities and high-tech are among the industries most likely to offer phased retirement.

A 2018 survey of 2,043 retirees by the Transamerica Center for Retirement Studies (TCRS) showed two-thirds of retirees said their most recent employers did “nothing” to help pre-retirees transition into retirement, and 16% are “not sure” what their employers did. Among the 18% of retirees whose employers helped pre-retirees, the most frequently cited offerings are financial counseling about retirement (6%), seminars and education about transitioning into retirement (5%), the ability to reduce work hours and shift from full- to part-time (5%), and accommodating flexible work schedules and arrangements (5%).

When looking back on their retirement preparations, almost three in four retirees (73%) agree they wish they would have saved more and on a consistent basis. About two-thirds (67%) say they did as much as they could to prepare for retirement, but almost as many (64%) wish they had been more knowledgeable about retirement saving and investing. Three in ten used a financial adviser before retiring to help them manage their retirement savings or investments.

Most organizations appear to underestimate the financial challenges facing older workers, and thus the likely timing of retirements, Willis Towers Watson says in a related white paper. According to the analysis, just over 80% of organizations acknowledge the importance of their older workers and managing the retirement process. Yet only about half believe they understand the process well, and just one-quarter feel they have found an effective approach.

“There are also important disparities in perception—between managements’ views of when pending retirements will occur, and the plans of the workers,” the white paper says. “Employers are concerned both about increasing retirements and the resulting loss of seasoned employees’ skill and experience, as well as rising numbers of delayed departures leading to higher salary and benefit costs.”