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Debate: Should age discrimination in the workplace be illegal?

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Background and context

Age discrimination occurs when a decision is made on the basis of a person’s age. In the workplace these are most often decisions about recruitment, promotion and dismissal. Although such discrimination could be seen in a reluctance to hire workers who were perceived to be too young and immature for the job, in practice it refers to a bias against older workers. In societies that celebrates youthfulness above almost all else, it can be very difficult for even highly qualified professionals to find new positions after the age of 50. For male senior executives, the fear of age discrimination has led to an increasing demand for cosmetic surgery, but for most older workers there appears little they can do to resist being swept aside in favour of younger replacements. Nationwide laws against age discrimination are some 30 years old in the United States, 20 years old in Canada and 10 years old in Australia. There are currently no such laws in the U.K. By 1 October 2006 however, the U.K. will finally have to legislate to make age discrimination in employment unlawful, pursuant to the European Employment Directive. But around the world the issue remains a controversial one, both in general and in particular over the practice of setting mandatory retirement ages.

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Argument #1

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Yes

The elderly may be just as capable as the young. Since age is not necessarily an indication of inferior ability or potential, treating a person less favourably purely on the basis of their age is just as unreasonable and unfair as doing so on the basis of his race or religion. It would also be inconsistent with the principles of equal treatment and non-discrimination, which are at the heart of the notion of individual rights. If a particular elderly worker truly has, say, less concentration or manual strength than a younger worker, and this objectively and reasonably makes him less qualified for the particular job, then employers can still make their decisions based on his relative lack of suitability for the job – not on his age. Age by itself should not be a determinant.

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No

In theory hiring should be based on ability. In reality certain abilities may be hard to truly test so employers use age as a proxy for them – in the same way that they use sports as an indication of one’s ‘ability to work in a team’, or extra-curricular leadership as an indicator of ‘management potential’. Though not foolproof, age is often an indicator of qualities such as concentration, memory, energy, and so on. These qualities may be important: a fashion designer may justifiably want his salespersons to have a certain level of energy and vitality; it is crucial that air traffic controllers and surgeons have very high levels of fitness and concentration.

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Argument #3

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Yes

Having few older workers also increases the amount the government needs to spend on unemployment and other benefits, and decreases tax revenues. This strain on public resources is increasingly critical in many developed countries given their ageing populations, the projected increases in the dependency ratio, and the pay-as-you go nature of state pension schemes.

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No

Many of the purported ‘benefits’ for the government budget in fact involve nothing more than ‘pure transfers’: the government spends less on health and other benefits – but only because the employer is now paying for them. The cost and the resource strain do not disappear – it is simply transferred from the government to the employers.

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Argument #2

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Yes

Discriminatory practices in recruitment and promotion cause detriment to the economy. Age discrimination reduces productivity because job and advancement opportunities are inefficiently matched to workers and talent is wasted. The Cabinet Office study of older workers estimated that low employment among older people reduces GDP by ?16 billion per annum. Higher participation rates among older workers lead to better matching of jobs to people, increased employment rates, and enhanced competition among workers that will stimulate the labour market in the longer run. The belief that the economy has only a limited number of jobs, and if older workers remain in the labour market they will deny job opportunities to younger people, or push down wages, is the well-known ‘lump of labour’ fallacy. Wages are especially unlikely to drop in industries with existing or projected shortages, such as in teaching, and nursing.

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No

Laws against age discrimination may merely lead to old people working more, instead of more old people working. Research on age discrimination laws in the U.S. shows that the ‘increase in employment rates’ of older workers are due mostly to them staying on in jobs for longer, rather than an increase in rates of hiring among older workers. Worse, the increased supply of older workers may, at least in the short term, generate market pressures for wages to fall, such that all existing older workers suffer.

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Argument #4

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Yes

Without age discrimination and a mandatory retirement age, employers benefit from lower turnover and thus lower recruitment costs and effort, because workers stay on at work longer than they would otherwise have done. The DTI estimates that this benefit to businesses will amount to ?39m in the first year alone. By contrast, discrimination discourages potentially talented job seekers from applying. Right from the recruitment stage, employers lose by having a smaller pool of workers to draw upon, and by failing to make the most of the existing skills potential of the population.

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No

The argument that anti-discrimination laws are good for employers offends economics and common sense. If hiring and promoting old workers were in firms’ best interests, firms would do so without the need for such laws. In fact, without a mandatory retirement age, employers are suddenly obliged to continue paying into people’s pensions much longer than they expected to, and to put up with other significant increases in costs such as higher insurance premiums, more expensive healthcare benefit plans, and so on. Furthermore, at any firm there are always a limited number of senior jobs. If these are taken up by older workers staying on indefinitely, firms may find it hard to recruit, motivate and retain younger workers looking to replace them, leading to high turnover among younger staff. Firms may also find that with no retirement age they have no idea when people will leave, creating problems of uncertainty in manpower planning and possible bottlenecks.

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Argument #5

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Yes

Ageism is the most prevalent form of discrimination in the workforce today. Legislation can help to change these prejudiced attitudes if it operates in conjunction with other policies to promote equal rights and educate employers and workers about their obligations and rights. By protecting a group in society that is often left out and less advantaged, we are also raising the level of equality in society.

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No

In Australia, Canada and the US, where anti-discrimination laws have long been in place, there is no clear evidence so far of any significant shift in the attitude of employers and society to older workers. In fact, there is some evidence that employers may be less likely to hire older workers, and younger co-workers may be more resentful, because employers are not allowed to set mandatory retirement ages.

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