How Age May Impact Downsizing Decisions

Article excerpt

Watch out, you senior workers!

It used to be that the old axiom, "first hired, last fired," offered veteran employees some protection in an economic slump. Don't count on that pattern in the current downturn in the United States.

In the 1981-82 recession, the job-loss rates of older men (age 45- 59) were 40 percent lower than those of younger men (25-39). In the 1990-91 recession, the job-loss rates of older workers were at least as high as those of younger workers, according to a study by the International Longevity Center - USA, a New York research group..

The same job peril could face older workers in today's rush of corporate layoffs, suspects one author of the study, economist Marjorie Honig. So seniority doesn't offer as much of a buffer against being laid off as it did prior to the 1990s. For one thing, fewer senior blue-collar workers are protected under union contracts. Perhaps the New Economy culture has less respect for seniors.

But for those 40 and over working for a firm with 20 or more employees, the 1967 Age Discrimination in Employment Act and subsequent legislation provides some legal protection for fair treatment in layoffs, retirement provisions, hiring, promotions, and benefits.

"The predominant effect of age discrimination legislation has been to reduce the likelihood that firms renege on long-term commitments to older, higher-paid workers and consequently to strengthen long-term relationships between workers and firms," reckons economist David Neumark, a visiting fellow at the Public Policy Institute of California, in San Francisco.

Also, federal and state laws banning age discrimination have boosted relative employment of older workers and reduced the retirement of older individuals, Mr. Neumark finds in a lengthy study for the National Bureau of Economic Research.

Nonetheless, Ellen Vargyas, legal counsel at the Equal Employment Opportunities Commission in Washington, says she's "constantly astonished" at what some employers do to their workers - despite the law.

The EEOC is already anticipating a jump in age-discrimination cases as layoffs multiply. EEOC spokesman David Grinberg notes that employers have become "more subtle" and "less overt" when discriminating against older Americans.

For instance, company officials don't tell a job applicant bluntly that he or she is "too old." They find some more proper excuse for not hiring the person. …