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As Economy Falters, Aging Baby Boomers May Take Hit

January 9, 2008
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Related Topics: Labor Law
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When I was hired as the first Washington correspondent for Workforce Management in 2005, I had an idea that we lived in a litigious society. Now that I’ve worked a beat for two-and-a-half years that focuses largely on employment law, I’m absolutely certain. From the Supreme Court down to trial proceedings, there is always a case in the legal pipeline that could have a profound effect on employers. Following an anemic jobs report on Friday, January 4, a rise in unemployment to 5 percent and an increase in the price of oil to $100 per barrel, it is possible that the number of cases will increase, particularly in the area of age discrimination. If we are slipping into a recession, the economic setback coincides with fundamental changes in labor force demographics. As everyone knows (has been beaten over the head with, in fact), the huge baby boomer generation is reaching retirement age. The trendy assumption is that employers will want to entice these folks to stay on the job past 65 so that they aren’t hammered with a talent shortage if most of the eligible boomers head to Florida. But others argue that many will elect to stay on the job to fulfill financial or psychological needs, so there won’t be a retirement crisis after all. The leading edge of boomerdom may be courted by employers. But those who were born a little later--at some point during the Eisenhower administration--are only in their 50s and face a more harrowing situation. They are in the prime years for companies fighting a recession to dump them and their hefty salaries and benefit packages. So, if the subprime housing fiasco and the credit crunch end up producing an economic contraction, look for age discrimination cases to multiply. At an early December event hosted by AARP to commemorate the 40th anniversary of the Age Discrimination in Employment Act, Howard Eglit, a professor at the University of Chicago, noted that labor is the highest cost businesses face. In rough economic times, that’s what takes the biggest hit. Young people trying to get a job and older workers trying to keep theirs “will be the two groups with the most problems,” he said. Demographic trends exacerbate the situation for AARP members, who must be at least 50 to join the massive advocacy organization. “There are a lot of people out there who are potential ADEA plaintiffs,” Eglit said. Another factor that could foster an increase in age discrimination suits is the fact that millions of Americans haven’t saved enough money to head to Florida or Arizona to live happily ever after. They could be desperate for jobs. “The group that needs to work is going to get larger,” said James Brudney, a professor of law at Ohio State University. But even as the population that might sue over age discrimination increases, their cases may languish because the federal government can’t help enough of them. “There are many, many valid claims out there, but there aren’t the resources to represent those people,” Eglit said. Even if the plaintiffs hire an attorney and get to court on their own, litigation is a long, difficult and potentially frustrating process. “Juries have been enormously unsympathetic to age cases,” said Glen Nager, a partner at Jones Day. An economic downturn will cause grief for most people. It may be even more hurtful for the burgeoning number between 55 and 65.

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