Term Paper: Workplace Diversity Any Discussion of the Older

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Workplace Diversity

Any discussion of the older worker in the first decade of the current century needs to take into account two seemingly disparate facts: the Baby Boomers are aging, but still under 65, and the youth generation is, in contrast, quite small. That leads directly to this apparent problem: Why are so many older workers being 'excessed' when there are so few workers to pay the freight for the Baby Boomers' Social Security pensions, and arguably to perform the work that needs to be done as well? In view of the shortfall any reasonable person might project -- in both workers to complete tasks and workers to support the retiring generation -- why are companies not trying harder to retain the older workers?

It is tempting to posit that it is simply natural selection, not unlike lions, tigers and bears. The young males want to control the herd and prey on the older males' weaknesses to accomplish it. In fact, however, there is abundant research that leads partially in that sociological/anthropological direction; the fact that many European Union nations have already begun serious grappling with the problem of displaced older workers is practically a guarantee that the problem is one of human relations, an area in which, arguably, European employee relations has taken civilization to a higher level than has been done in the United States; indeed, some studies and articles make it clear that human resources in the United States is failing the older worker. Partially, however, the phenomenon of removing older workers from the workforce can be seen as a move to the usual destination in any sort of U.S. business discussion, profitability (or at least, retaining capital).

The current extent of the problem

Not surprisingly, a survey of the trade press, and even the consumer press, reveals that the high tech industries seem to be particularly prone to age discrimination. A few studies reveal that the reason is that older workers are 'technology resistant' or fearful. That seems, however, to be a reason that would be prevalent in general industries, not in high tech itself where the older workers have probably spent most if not all of their working lives, updating their skills and knowledge just as fast as the younger staff members. In fact, the Institute of Electrical and Electronics Engineers-USA found that among its own unemployed members, for each additional year of age beyond 50, the member suffered an additional three weeks of unemployment. "In other words, the average 50-year-old tech worker will stay unemployed more than a year longer than his or her 30-year-old counterpart" (Information Week 1999). The same article noted that 17% of IEEE members had been asked to take early retirement, and that the U.S. Census Bureau substantiated the figures with its own: In a market hungry for computer expertise, it found that "17% of computer programmers over 50 are unemployed" (Information Week 1999).

IBM -- Big Blue -- has also been in the 'older worker' hotspot, although allegedly for a retiree, rather than a worker, problem. In 1999, IBM was switching its pension plan to a cash-balance plan rather than a traditional plan. Dave Finlay was calculating his future pension benefits and realized that he would receive more than 30% less under the new plan than under the old one.

Finlay ran a spreadsheet program to compare the old and new retirement benefits. After spending what he calculated to be bout 2,000 hours on the project, he posted his spreadsheet process on a Web site so that other IBMers to calculate their own benefits potentials. "Without that, I don't think we would have ended up filing suit," said Janet Krueger, a former IBM computer consultant involved in the suit. "His work allowed us to quantify the impact of the changes" (Quoted by Fillion 2004). NBC ran stories about the impact, and the United States Senate scheduled hearings on it. In response, IBM changed the pension plan to allow all employees at least 40 years old and with at least 10 years' service to choose between the old, traditional plan and the new cash-balance one. Findlay noted that the fact that they had converted when they did is what led him to retire, before he could be affected (Fillion 2004). Finlay was a senior engineer with 29 years' service to IBM.

This scenario, which avoids actual firing, is typical of the ways in which older workers (generally defined in most studies as over age 55, as it will be defined here) are removed from the workplace. Moreover, the phenomenon has been in the trade press since at least 1989, when Clogson wrote for EDN about age discrimination and older engineers.

In 1989, John Guarrera, chairman of the IEEE's age discrimination committee, offered some opinions as to the reasons high tech companies often pushed engineers into early retirement.

He noted that it is the nature of high-tech companies to rely on continually evolving technologies go survive and that those companies view recent graduates as skilled in those areas, while they believe the older engineer's skills are obsolete (Clogson 1989). Moreover, the prospect of lengthy projects, often as long as ten years, provides an excuse to pass over older engineers; the companies would rather have a young engineer, one likely to remain with the company, than someone who might retire in five years (Clogson 1989). Guarrera's opinion was echoed by David Corbett, president of a Boston-based outplacement firm, who noted that those in their 40s and 50s were regarded as "too mature, too old for the industry" (Clogson 1989).

The companies have to face the reality, however, of the 1967 Age Discrimination in Employment Act (ADEA), under which they can face lawsuits for discriminatory actions against older workers. (Additional legislation was the Older Workers Benefit Protection Act of 1990.) Fearing the ADEA, companies often require retiring workers to sign a document waiving their rights to sue their former employer under the ADEA. Guarrera thinks that if the company were making fair settlements, they would have no need of a waiver. Margaret Fernandez, a spokesperson for the Equal Employment Opportunity Commission (EEOC) noted that there is no problem in the waivers per se; the problem is that often, people are forced to sign the waivers (Clogson 1989). An attorney for the American Association of Retired Persons (AARP) in Washington, DC, says that some companies tell the employee he must sign the waiver or will not get the pay he is entitled to without a waiver (Clogson 1989).

While such instances as those are quite easy to identify as violating the ADEA, other means of removing older workers are more subtle. Arguably, in the years between 1989 and a 2003 report by the respected New York newspaper, Newsday, employers had learned other ways to diminish the numbers of older workers in their workforce in less obvious ways. Seal Dynamics laid off a 19-year veteran who had had glowing evaluations because the son of the founder, when he took over the company, wanted to surround himself with younger workers. One man half her age became her supervisor and criticized her constantly and put her on probation until she was finally laid off. She filed a complaint against the company, as did her boss, a woman who went through similar harassment (Mason-Draffen 2003). The company's attorney asserted that it had had "some difficult decisions to make, and they selected the people who they thought would be the most appropriate for running the business in the most effective way in the future" (Quoted by Mason-Dreffen 2003).

While Newsday printed a disclaimer saying that filing a suit was not proof of a misdeed, nonetheless, age discrimination suits had increased dramatically in the "weak economy" after September 11, 2001 especially. Mason-Draffen noted that "age discrimination cases rose 14.5% in 2002 to nearly 20,000 nationwide compared with the preceding year. Some experts say the increase indicates that older workers believe employers are using hard economic times as an excuse to get rid of them because they are more costly" (2003).

Mason-Draffen also chronicled some recent cases, including those involving:

Foot Locker, Inc., which EEOC ordered to pay a $3.5 million settlement for targeting older workers during a nationwide layoff.

Ford Motor Co., which settled a 2001 case resulting from the initiation of a performance rating system in which a disproportionate number of workers older than 40 received the lowest grade, "C," and were terminated. For paid $10.5 million (Mason-Dreffen 2003).

In addition, 6,400 Allstate insurance agents were given the ultimatum: forfeit valuable benefits and become independent contractors, or lose their jobs completely (Cohen 2003). The agents claim that they were singled out because "more than 90% of them were over 40" (Cohen 2003).

While the payoffs were large in those cases, the downsizing and layoff activities leading up to them, continuing throughout the 1990s, were also substantial. Affecting middle management more than other levels, the downsizings "exploded from an average annual 400,000 in the mid-'90s to 2 million in 2001,… [END OF PREVIEW]

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