The Issue of Age Discrimination - Research Paper Example

The Issue of Age Discrimination of Your of Your With today’s difficult economy, businesses have to cut costs in all areas of their budget. One way this is done, is to reduce salaries and the costs of health insurance. This is often accomplished by a reduction of work force, mainly older employees who more often than not make more money and drive the costs of insurance up. This is age discrimination and is against the law. It is against both federal law and state laws. The laws include incidents taking place regarding work –related situations, harassment and covers unfair practices in policies and procedures. Policies and procedures for the company should be written clearly in an employee manual. This should include how promotions, salary increases/decreases and reduction in work force will occur. Having clearly written policies and procedures will benefit the employee and the company in age discrimination cases. These laws fall under the federal United States Equal Opportunity Employment Commission, although state governments also have their own laws regarding age discrimination (eeoc.gov). Age discrimination can be defined as when either an employee or an applicant who is over the age of 40, experiences unfair treatment when it comes to anything related to employment including hiring and dismissal, pay, job assignments, layoffs, work hours, promotions, etc. (eeoc.gov). Although there are many reasons for age discrimination, insurance companies are primarily to blame. Harassment relating to age occurs when supervisors, other employees or even clients continually hassle or badger someone. The law does not cover light hearted teasing or occasional off handed remarks, but when the situation escalates to create a hostile work environment for the employee it could be an issue of age discrimination (eeoc.gov). Keep in mind that the law pertains to people over the age of 40. According to U.S. News Money, people in the United States are retiring later than in previous years. This can be attributed to a lack of employer sponsored retirement benefits, reduction in Social Security benefits, longer life expectancy, improved health as people age and the coordination of retirement between wives and husbands when statistically, wives are three years younger than their husbands (money.usnews.com). Increased career length leads to an increase in age discrimination instances. With the recent downfall of the United States economy beginning in 2008, it has become more important for people to continue to work past typical retirement age. Since that time, age discrimination law suits have increased by 22 percent. It has become increasingly difficult for older persons to be hired into new companies. It is usually a less expensive option for companies and organizations to hire younger workers as they are more apt to work for less money in exchange for the opportunity for promotion as compared to workers over 40. Younger workers are also more apt to stay with the company longer since older persons are nearing retirement and may take retirement as an option after only a few years. One social issue that leads to age discrimination in the work place is the question of how employer sponsored insurance plans operate. The way in which insurance companies operate is out of the company’s control, but certainly affects companies is significant ways. The cost for these plans is typically based on the average age of the employees. The lower the average age, the lower the insurance premiums are for both the company and the individual employee. This can lead to discrimination based on nothing except age because companies want to lower the cost of their insurance premiums. This practice is against the law, but happens all over the United States. A solution to this problem is to change how insurance companies determine the cost for its premiums. Of course, this is easier said than done and must be done within the insurance industry or with the help of political involvement. Another issue at play in the work place in terms of age discrimination is company training. Companies are hesitant to hire older employees and put them through company required training only to have them retire in a few years, when they can put a younger person through training and have them remain at the company through the promise of salary increases, increasing responsibility and promotions (freelegaladvicehelp.comdiscrimination). This is especially true in organizations in which the company training is expensive for employees to participate in. Younger employees can also take on the responsibility of training others as they stay with the company. Overall payroll costs are another concern when it comes to age discrimination in the work place. Payroll expenses are usually one of a company’s largest expenses, so when a company needs to reduce their costs, payroll is often evaluated. Within a company, it is normal for the older employees to have higher earnings than their younger co-workers. Older employees have more experience and often more education leading to a higher salary. When a company determines that an employee layoff is in the best interest of the business in order to reduce their expenses, it is more often than not, the older employees, making more money, who end up losing their positions (freelegaladvicehelp.com). Younger employees are also more apt to take on extra duties, thinking that they may be considered for a wage increase or promotion if the demonstrate they go above and beyond for the company. Another issue facing older workers is technology in the work place. Even though an employee’s work record may be impeccable and their job performance evaluations may be stellar, younger employees are often associated with a greater knowledge of the use of technology. This may or may not be the case, as older workers can have a vast knowledge of technology, but it is often assumed that younger workers can implement technology better than their older co-workers. Age discrimination would be at play if an older worker is dismissed and replaced with a younger worker just because the supervisor believes the younger employee knows technology better (eeoc.gov). However, this behavior is very difficult to prove if taken to court. Although there are many issues pertaining to age discrimination, if the insurance industry, as mentioned earlier, would revamp how they determine the cost of business premiums. This could greatly reduce the instances of age discrimination within the United States. A research study conducted by the Kaiser Family Foundation discovered that in 2011 the average family health insurance premium, sponsored by employers was $15,073 per family (Abelson). Of course, many businesses pass along some of this cost to the employees, but in most situations, the company pays for the majority of the health insurance costs. With the prices being so high, it is understandable that organizations want to reduce this expense. This amount is a 9% increase over the previous year and is being attributed to the changes in health care, such as covering dependents until age 26, implemented by the Obama administration (Abelson). The continuing increase of medical costs also contributes to the rising costs of health insurance. The cost of employer sponsored health insurance premiums are figured based on the average age of employees, number of smokers, health history, etc. Each employee may be asked to complete a brief health questionnaire during the process of figuring the premiums (patients.about.com). Obviously, health insurance is a big expense for companies. If reducing the average age of employees save a significant amount of money, it would stand to reason that companies would consider this option. Changes in the health care insurance industry need to take place in order for this practice to stop. There needs to be another way to determine the costs of health care. Basing the costs of age is not accurate as older persons could actually be healthier than younger persons. Age is not necessarily equivalent to the need for increased and more expensive health care. As a result, older workers become unemployed and then become uninsured, as they do not have an income to purchase their own health insurance and they may not be of age to qualify for Medicare. This leads to an increased price in health care as health care expenses may not get paid from these uninsured patients (.npr.org). Then, in turn, this leads to an increase in health insurance premiums. It is a revolving door that needs to be stopped through some major changes in the way health insurance premium costs are determined. This also leads to an increased number of people seeking government help to pay for medical expenses, including Medicaid and Medicare. It is possible for unemployed or underemployed persons to purchase their own insurance, but these policies can be extremely expensive or they lack significant coverage. Employer sponsored health insurance has the advantage because they purchase multiple policies at one time. There is leverage in purchasing policies for multiple employees as opposed to a single person or a family trying to purchase their own insurance. Taking into consideration all of the information discussed above, it is obvious that many social issues stem from this issue of age discrimination. Many people become dependent on government resources such as food stamps and medical care, the unemployment rate rises, bankruptcies increase, more people face foreclosure and may become homeless and the problem can’t be corrected because older employees have difficulties finding a new job. Age discrimination reaches way beyond just someone losing their job. It affects the entire society and when age discrimination becomes common practice, the affect can be quite large in many social arenas. Age discrimination can also occur to young workers, although the law is aimed at older workers. Young workers can experience unfair promotion practices, unfair pay scales and harassment, just as older workers can. Young workers can sue their employer for age discrimination, but again, these cases are very difficult to prove, especially since laws are aimed to look out for workers over 40. There is a famous age discrimination case, Gross v. FBL Financial Services Inc. in which Jack Gross discovered that his company was only promoting younger workers while demoting older workers. He was on the demotion side. Mr. Gross won the first court case, but when the case was heard by the Supreme Court, he lost with a 5-4 decision (npr.org). This case is important because the court set a precedent making it very difficult for individuals to prove that they have experienced age discrimination (npr.org). This leads to even more social issues in terms of companies getting away with age discrimination with little worry of being prosecuted for it. Older workers often just have to deal with being demoted or are faced with unemployment without any repercussions. Without a change in age discrimination laws, this practice will continue and older workers will continue to face the many social issues that come from this illegal practice. During election seasons, it is important to keep the issue of insurance practice and age discrimination at the forefront by asking questions and getting involved. Businesses should be in contact with their local politicians in order to be certain that the reform of insurance practices and the controlling of costs stay in the forefront of our American culture. Works Cited Abelson, R. “Health Insurance Costs Rising Sharply This Year, Study Shows.” New York Times. New York Times. 27 September 2011. Eeoc.gov/laws/types/age.cfm. Web. 27 May 2012. Eeoc.gov/youth/age1.html. Web. 29 May 2012. Freelegaladvicehelp.com/elderly-laws/age-discrimination/Examples-Of-Age-Discrimination.html. Web. 28 May 2012. http://money.usnews.com/money/blogs/planning-to-retire/2011/08/17/average-retirement- age-grows. Retrieved May 28, 2012. Npr.org/2012/02/16/146925208/age-discrimination-suits-jump-but-wins-are-elusive. Web. 29 May 2012. Npr.org/2009/09/28/112958877/stacks-of-medical-bills-afflict-the-underinsured. Web. 29 May 2012. Patients.about.com/od/followthemoney/f/FAQinspremiums.htm. Web. 29 May 2012. Read More