NCPA - National Center for Policy Analysis

Age-Discrimination Laws Backfire

August 26, 1997

Congress began passing laws in 1967 to help older workers keep their jobs by banning the practice of automatic retirement at age 65. But personnel specialists warn such laws are making things worse for older workers, not better.

The federal Bureau of Labor Statistics reports that older workers face "greater labor market difficulties" than younger colleagues when displaced from jobs.

  • Rates of full-time employment for older men have dropped, not risen, since the law took effect.
  • To prune older workers from their payrolls, companies have come to rely on "buyout" offers -- lump sum payments to those who agree to leave -- which tend to attract long-term workers.
  • Older job-seekers are disadvantaged because employers know they could face legal action or an expensive buyout package if the employee doesn't work out or loses the ability to do the job.
  • Recognizing that they may eventually have to fund an expensive buyout, employers must factor in that cost in deciding how much they will pay the worker in the first place.

Thus laws designed to favor one group can wind up jeopardizing the very people they were designed to protect.

Source: Walter Olsen (Manhattan Institute), "Age-Bias Law Backfires on Boomers," USA Today, August 26, 1997.

 

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