Thursday, March 31, 2005

On Age Discrimination

The American culture worships youth to an extraordinary degree. Getting older here doesn't convey very many privileges unless you happen to be one of the few white men in power. Then you can go on to higher and higher things as you age. Just think of Ronald Reagan. For the rest of Americans getting older means becoming less desirable as a person. The process starts much earlier for women; somewhere around the age thirty many women start worrying about wrinkles and gray hair, but ultimately it affects most men, too. Hence the great demand for cosmetic surgery and botox and false rugs on tops of the heads of newsreaders. We all wish to look eternally twenty-eight.

Employers would like us to remain twenty-eight for ever, too, because younger workers are less expensive, not having had time to accumulate experience-related raises and not being as likely to need health care. This makes age-based discrimination a real possibility, and the Supreme Court has just given another decision about when an employee can sue on such grounds:

The Supreme Court made it easier Wednesday for any worker over 40 to allege age discrimination, ruling that employers can be held liable even if they never intended any harm.

About 75 million people -- roughly half the nation's work force -- are covered by the decision. However, the ruling makes it clear that older workers will have a high threshold to prove their claims.

Justice John Paul Stevens wrote that in some cases employers are within their rights to treat workers differently because of age.

"Age ... not uncommonly has relevance to an individual's capacity to engage in certain types of employment," wrote Stevens, who at 84 is the court's oldest member.

The ruling sides with older police officers in Jackson, Miss., in saying they do not have to prove that the city deliberately tried to discriminate against them, just that the policies disproportionately harmed them. Nevertheless, the high court dismissed the suit, saying officers did not demonstrate that.

The ruling means that older workers now have less of a burden to raise their claim in court when suing under federal law, although ultimately it may still be hard for them to win.

Having to prove that someone deliberately tried to discriminate against you would be extremely difficult unless you are dealing with a very stupid person. In most cases such intentions would be carefully hidden under some other excuse. Thus, it makes sense for the Court to state that workers don't have to prove deliberate intent.

But the Court doesn't give workers a completely free hand in this respect:

At issue was workplace polices that appear neutral but actually disproportionately hurt older workers. Advocates for the aging say few employers would ever be up front about intentionally favoring younger workers, making age bias claims hard to win absent the rare "smoking gun."

But employers say allowing disparate impact claims under the Age Discrimination in Employment Act would hinder their ability to make necessary decisions based on age-neutral factors, such as training or performance, even if the impact happens to be greater on older workers.

The ruling in some ways strikes a compromise between the two.

On the one hand, it allows older workers to make a disparate impact claim under the ADEA regardless of intent; but at the same time, it permits an employer to cite "reasonable" factors, such as cost-cutting, to justify a practice that penalizes older workers so it prevails at trial.

Firms compare the costs and benefits when they decide whom to hire or promote. Older workers are often more experienced and may* be more productive workers. On the other hand, older workers also cost more than younger ones because many of them have more work-experience and the raises related to that. They also cost more because of their higher average health care expenses. Delinking health insurance from employment would greatly reduce the incentives firms have to get rid of their older workforce.

As is often the case, it is tricky to define what discrimination means. An employer who fires someone just because that worker is old, no matter what the data on productivity and costs say, is clearly discriminating. But what if the firing is based on the worker's age-related health problems and their costs to the firm? It will be interesting to see how the courts will clarify these issues in the future.
*I say may be, because the effect of age and experience are intermingled here, and sometimes they have opposite effects on productivity, though not always. For example, a carpenter gets more skilled with experience which requires years to accumulate, but the physical demands of the job may make an older carpenter less productive in the physical sense. Slightly different considerations have similar effects for those who work in nonmanual jobs.