Taken from the Georgia State University News Hub, November 2015, archived from the original here.
Older workers laid off during the Great Recession had a harder time finding another job afterward. Were employers breaking the law?
By Jeremy Craig
When the Great Recession hit in 2008, many advertising agencies went off a precipice. Their clients’ ad budgets had been sliced to little, if anything.
When the budgets were gone, so was Alan Brown. “I’d be told, ‘Oh, don’t worry, we’ve got a budget,’” said Brown, who was in his mid-40s and had substantial international advertising experience. “Then, they said, ‘Oh, I’m sorry, you don’t have any budget anymore,’” before he was shown the door.
He found another advertising position, only to get laid off again. Year after year, he couldn’t get another job in the field. His experience was not uncommon during the Great Recession, when workers over the age of 35 had a tougher time finding a new job than younger people.
The crest came in 2012, after the recession was technically over. On average, everyone on unemployment benefits was out of work for about 39 weeks that year, according to the U.S. Department of Labor’s Bureau of Labor Statistics.
But for people over 35, the numbers were worse, climbing upward with each age bracket—from 42 weeks without work for ages 35 to 44, all the way to nearly 57 weeks for people over 65.
For Brown, it was even longer.
“There just weren’t any jobs,” he said. “I look back over the years, let’s say the last five years—2009, nothing. 2010, nothing. In 2011, all of a sudden the usual jobs were advertised, and then halfway through the year they disappeared.”
The concept of age discrimination often brings to mind a worker nearing 60, waiting to retire but seeing his or her 401(k) dwindle with the looming prospect of being laid off.
But federal law sets the threshold much lower, at age 40. Brown’s experience shows that age discrimination can happen around that age, too, he said.
How the law works
The Age Discrimination in Employment Act (ADEA) forbids employment discrimination against workers age 40 and older in hiring, firing, pay, benefits, discipline, promotions and demotions.
The law’s definition of age discrimination is two-fold: “disparate treatment” and “disparate impact,” said Charlotte Alexander, assistant professor in the J. Mack Robinson College of Business at Georgia State.
Disparate treatment is just that: employer policies that treat older workers differently than others.
There is typically evidence that different treatment is motivated by an employer’s view of older workers, Alexander said.
“It could be a negative view—‘I think older workers are less productive, not innovative, I want to bring in new blood’—therefore I fire you because you’re over 40,” she said.
Disparate impact is trickier. It happens when an employer has a practice that at first glance has nothing to do with age, but disproportionately “weeds out” older workers, she said, pointing to jobs with strength requirements as an example.
But disparate impact cases can be incredibly difficult to win in court. Proof is hard to come by, Alexander said.
So, did employers who terminated more seasoned workers during the recession break the law?
The answer isn’t clear.
“The more expensive workers might be the ones with the longest tenure, and are the oldest workers,” Alexander said.
“If the employer is trying to save money but the effect of the decision rests more heavily on older workers, is that illegal discrimination?
“That’s an area of the law where you see a lot of debate, and the courts are still wrestling with how to deal with it.”
Maturity has its benefits
There are many reasons older workers should be vital to businesses, not least of which includes understanding basic business protocol and workplace dynamics—tacit knowledge that can be passed down from one generation to another.
“You need to be able to nurture young people who can benefit from that experience,” said Ephraim McLean, Regents’ Professor and George E. Smith Eminent Scholar’s Chair in Information Systems at the Robinson College of Business.
In Brown’s experience, there’s anecdotal evidence that basic business etiquette hasn’t caught on among some younger workers. Take, for example, a recent incident with a now-former employee in his 20s.
In the United States, it’s customary in most jobs to give a written two-week notice when quitting, and also to tell an employer face-to-face.
But one morning, with no warning, Brown received a text message from an employee saying he was quitting as of that very day.
“I wouldn’t have believed it if I hadn’t actually witnessed it,” he said.
Millennials are often full of eagerness and ideas for new products, services or other innovations. In taking those concepts to market, they can benefit from older workers’ experience and insights, McLean said.
“When you create a team, you want to have both mature individuals as well as young people who are very creative, and let them play off one another,” McLean said.
There are other reasons why businesses should hire more seasoned workers, such as institutional knowledge and a wealth of skills gained over the years, McLean said.
“If you think, ‘We’ll find someone cheaper to replace them,’ you’ll find that the overall cost of the replacement—someone with the ready-made skills—is at best a draw, and oftentimes, surprisingly more expensive,” he said.
Striking out on his own
Brown, the former advertising exec, came to a point in his job search where he realized he needed to find another way to make a living.
“I couldn’t fathom sitting on a sofa, watching TV, waiting for the phone to ring,” he said. “I had to do something.”
With a love of fitness and health, he decided to open a franchise of the Snap Fitness chain in the fast-growing area along Marietta Street west of downtown Atlanta.
Things didn’t start out smoothly. Construction dragged out, causing him to miss out on the rush of January and February gym signups. But it came together, and now Brown wouldn’t dream of giving up running his own business.
“I’m the one who’s doing my own budgets,” he said. “I’m the one who’s looking after employees. I’m the one who’s designing stuff to go into the gym, all of these different things. Some of the comments I got from my friends were, ‘Wow, I wish I could do that.’”
PHOTOS: CAROLYN RICHARDSON
LIGHTING: STEVEN THACKSTON