How age discrimination threatens the economy
It’s not just older workers who are paying the price for age discrimination.
Disregard for older workers is weighing on the economy. So says a report from AARP, which finds that employers turning up their noses at older workers could end up taking some $850 billion out of the U.S. economy. In 2018 the 50-plus population contributed some 40 percent of the U.S. GDP, supporting 88.6 million jobs and contributed $8.3 trillion to the economy – even though it only made up 35 percent of the population – but by 2050 that’s expected to more than triple to $28.2 trillion.
Related: Workplace age discrimination starts younger than you’d think
Yet at the same time, thanks to age discrimination—involuntary retirement, underemployment and unemployment duration among the 50-plus population—the economy kissed goodbye to another $850 billion in growth.
And all business sectors were, and will be, affected if age discrimination continues.
For starters, according to a report from Bankrate.com, pay raises aren’t coming at the rate one might expect in a so-called “booming” economy. In fact, says another Bankrate report, over the last year half of American workers didn’t get a raise at all, whether at an existing job or by moving to a new job with higher pay.
And older Americans are seriously disadvantaged by this trend: “Half of younger baby boomers between the ages of 55 and 64 … didn’t get a pay increase over the past 12 months,” according to Bankrate’s December survey. Of course, workers of all ages have seen pay increases dwindle, but those between the ages of 65 and 73 were even worse off, with nearly three in five not seeing an increase in pay, the worst of any age group, the survey found.
One reason it gets tougher for older people to get a decent—or any—raise, even in a tight job market, is that it gets tougher for them to pick up and move to take a higher-paid job. And many workers find now that the only way to get a raise is to change employer.
Additionally, with the risk of older workers leaving lower, employers figure they don’t have to work as hard to keep them.
But employers might want to consider that they’re shooting themselves in the foot over future profits by discriminating against older workers.
Says the AARP study, “The U.S. could miss out on a 14 percent increase in the 50-plus population’s economic contribution in 2050 because of age discrimination.”
That means that by treating older workers less generously, employers are looking at their expected contribution of $28.2 trillion by 2050, instead of the $32.1 trillion it could be.
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