No help for older unemployed
A Fed report says there were few protections against age discrimination during the Great Recession.
WASHINGTON - Older unemployed Americans got no help from laws against age discrimination during the recession, and may have quit the labor force as a result, a Federal Reserve Bank of San Francisco study says.
The study by David Neumark and Patrick Button, published last month, found very little evidence that strong state measures to protect against age discrimination helped older workers weather the recession better than their younger counterparts.
"In fact, the opposite may have occurred, with older workers bearing more of the brunt of the Great Recession in states with stronger age-discrimination protections," they said.
Speculation has been rife that employers discriminated against older job seekers and continued to do so after the downturn, in contravention of the federal Age Discrimination in Employment Act (ADEA).
Though the worst recession since the 1930s ended almost five years ago, economic growth has remained sluggish. Millions of Americans are either out of work or can find only part-time employment. Others have given up the search for work altogether.
In March, the average duration of unemployment for the 55-64 age group was 49 weeks, nearly double the length for the 20-24 age group, according to U.S. Labor Department data.
"The sharp increases in the duration of unemployment for older workers during and after the Great Recession indicate that older individuals who lost their jobs because of the downturn or who were seeking new employment have had a harder time finding work than other workers have," the authors said.
An analysis of the data before the 2007-09 recession suggested the anti-age-discrimination measures had been effective then, the authors said.
"An event like the Great Recession disrupts the labor market so severely that sorting out which effects are due to age discrimination and which to worsening business conditions becomes very difficult," they said.
"These complications may make it hard to demonstrate age discrimination, reducing the likelihood that the legal system can intervene effectively and fairly."
The downturn might have provided employers cover to engage in age discrimination, the authors said; uncertainty over business conditions also might have made them wary of hiring older workers.
"Nonetheless, increased discrimination during and after the Great Recession may have extended unemployment durations of older workers, especially those near retirement," the authors said. "In that way, they might have prompted some older workers to hasten their exit from the labor force."
The authors suggested making changes to the anti-age-discrimination measures to make them more effective during economic downturns.
"Possible modifications could include refinement of legal standards for discrimination that would make it harder to appeal to changes in business conditions," the authors said. "In addition, affirmative policies that would encourage hiring of older workers might be helpful."
Neumark is a visiting scholar at the San Francisco Fed and Button is a doctoral candidate at the University of California, Irvine.