America is running headlong into a major problem: Boomers are getting older. In the coming years, the retirement-age population will rise to its largest size yet, shrinking Social Security funds, overwhelming nursing homes and creating a labor shortage.
Larry Fink, the 71-year-old CEO of asset management giant BlackRock, offered a two-pronged solution to the looming pension crisis in his March annual letter to shareholders. To avoid economic catastrophe, he argued, people should save more money and work longer. “What if the government and private sector treated people over 60 as late-career workers with a lot to offer, rather than people who should retire?” Fink wrote. The current retirement age for Social Security is 67, but most Americans are leaving the workforce earlier. If more people continued to work into their late 60s and 70s, the looming crisis would ease.
In some ways, Fink’s solution sounds nice and even sensible: many healthy, energetic 70-year-olds like to stay in work and contribute to the economy, so why not encourage more people to do the same?
The problem is that his plan overlooks some important realities. First, many older people cannot work because of a disability or because they have to care for someone else with a disability. The second is that those who are willing and able to work are often unwanted. Despite a legal ban on discriminating against people aged 40 and over in the workplace, this still occurs frequently.
Instead of making it easier for Americans to save for retirement and work as long (or as short) as they want, Fink sets up a catch-22: the economy needs older Americans to work longer, but many companies simply don’t want that. them.
In Texas, Daniel Ross has been busy. As co-founder of Ross Scalise Employment Lawyers, an Austin firm that represents people who have experienced age discrimination, this isn’t necessarily a good thing. Over the past five years, he said he has noticed an increase in age discrimination cases, especially in cases involving wrongful dismissal. “Here in Austin we have a lot of tech jobs and tech companies,” he said. “They want to look younger.”
A 2023 survey by the Society for Human Resources Management found that 30% of employees felt discriminated against because of their age at some point in their career.
“This is absolutely not good when we are in a time where we have so many more jobs to fill and people trained to fill them,” Emily Dickens, SHRM’s chief government officer, said of the survey results.
Stacie Haller, Lead Career Advisor at ResumeBuilder.com
According to the U.S. Chamber of Commerce, there are 8.5 million open jobs in the U.S. and only 6.5 million unemployed people looking for work. The shortages span several industries, with healthcare, hospitality and business services such as accounting topping the list of the most unfilled vacancies. Vacancies are increasing in the Texas tech scene. But despite the shortages, many companies are reluctant to fill their vacancies with older people.
Patrick Button, an economics professor at Tulane University, has done extensive research on employment discrimination, mainly through field experiments known as resume correspondence. These studies involve creating fictitious resumes that vary in a number of ways and using them when applying for job openings. The number of callbacks each resume receives indicates the employer’s response to that type of employee.
One of Button’s studies looked at ‘bridge jobs’,” part-time jobs in administration or retail that many people use to retire more easily and ease their finances. “The opportunity to get these types of jobs is a mechanism that older people use to work longer and then give themselves better security offer when they retire,” Button said. He and his co-authors sent out 40,000 resumes that they wrote to represent different age groups: younger workers between 29 and 31, middle-aged workers between 49 and 51, and older workers between 64 and 66. They applied for listings for administrative, retail, security and cleaning positions – all typical bridge jobs that attract applicants from every demographic group.
For women, they found a 3 percentage point drop in resume responses around age 50, with a significant drop around age 65. In men, the decline occurred at age 65. The results were clear: “There is a significant degree of age discrimination in the ability to take these jobs, especially against older women,” Button told me.
Other studies have found a similar pattern: A 2024 survey of 1,000 hiring managers conducted by ResumeBuilder.com, a website that helps people write resumes, found that more than a third of respondents admitted to being biased against candidates over 60 years old and Gen Z. candidates.
“We’re in a situation where we have a group of people who apparently only hire their own age group because they seem to be biased against those younger and older than them,” said Stacie Haller, a principal career counselor. 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 from 2013 to 2018, IBM had implemented an explicit, top-down program to fire employees over 40 and replace them with employees under 40. The Equal Employment Opportunity Commission found that there was a “reasonable reason”. to believe that IBM discriminated against certain employees based on their age. The case is still ongoing.
In 2023, the 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, including incentives for managers to hire people to employ people under the age of 40. Scripps Medical Clinic in San Diego was ordered to pay $6.9 million to set a mandatory retirement age of 70 for physicians, regardless of the physicians’ interest or abilities.
More often, however, the discrimination is less explicit. Ross, the age discrimination attorney, said most of his cases involve circumstantial evidence. He told me that people who would never dream of making comments about race, gender, or religion, casually make jokes about old people, ask people when they’re going to retire, or otherwise help an older colleague feels unwelcome. Often, he said, this kind of circumstantial evidence helps him build cases.
Age discrimination happens for many reasons. We live in a youth-obsessed culture, and gray hair doesn’t reflect company branding. Employers may assume that older workers have health problems and therefore need more time off, or that they are out of touch with rapidly changing technology. Some managers don’t know how to handle their older reports. And some older workers have heard all the corporate buzzwords and whining before, so they don’t buy into management’s slogans, making them “difficult.”
“Companies want to create a younger workforce. And I think one of the reasons they want to do that is so they look like a younger workforce to customers and to potential employees who are statistically going to be under 40 years old,” Ross said. .
In an ideal world, older workers would be able to retire peacefully and leave the work of the country’s economic engine to the younger generations while they enjoy a well-deserved break. But increasingly, retirement-age Americans are finding themselves 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 keep working because companies don’t want them.
Larry Fink is right when he says that most industrial countries have not prepared for the economic consequences of an aging population. In the US, the silent generation and older baby boomers have enjoyed relatively rich retirement and health care benefits. But for most retirees, it’s simply not enough. Less than half of boomers have sufficient retirement savings, while a fifth say they have no savings at all. Retirement-age Americans are already struggling to make ends meet, having to factor in working into their 70s to boost their meager savings.
The problem with Fink’s assessment is that it is simply not realistic. He asks people who have not yet retired to work longer than their elders and save even more money, without changing the systematic barriers to either. 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 set up to help people work longer or save more money. Younger generations are already panicking about how much money they need to save for retirement.
For Fink and others in the executive class, the dilemma is this: They can pay workers more and let them work longer so they are better prepared for retirement, or they can pay more taxes so the government can provide better pensions. benefits that allow people to stop working when necessary.
They can’t have it both ways. If they ignore the problem and do nothing, they will allow the average person to spend their golden years in poor financial shape – which will cause economic disaster for everyone.
Ann C. Lodge is a writer specializing in business and finance. Her most recent book is ‘Options Trading’. She lives in Chicago.
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