Hundreds of fund industry professionals have lost their jobs in recent months, and older employees are likely to account for a disproportionate number of people out of work, recently published data and industry sources suggest.
At the same time, employees with decades of experience typically endure longer periods of unemployment before landing their next job. And those who do find new work often earn less than before.
“There’s definitely a very strong age bias within the [financial services] industry,” says Cara Greene, partner at Outten & Golden, which represents financial service professionals in employment litigation. “It’s not a new phenomenon. What is more pronounced is that, consistent with overall trends … people want to continue to work — not stop at 55 or 60 — and they’re being forced out.”
Across industries, about 56% of employees age 50 and older have suffered an “involuntary” job loss, such as being laid off, and few of those subsequently landed positions that paid as well as previous posts, according to a recent ProPublica article. (More details on their methodology below.)
The Workforce Is Just Graying
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Nearly 75% of Americans plan to work either full- or part-time after age 65, according to a 2017 Gallup poll of about 700 adults. In contrast, in 1995 only 14% of respondents said they expected to retire after age 65.
In part, the toll the financial crisis took on many older workers’ retirement savings accounts a decade ago is to blame, as it forced many to revise their expected retirement ages upward.
Already, older workers make up a bigger slice of the workforce than even 25 years ago. In 2017, employees age 55 and older made up about 24% of the workforce, while in 1992, they represented 12%, according to a June 2018 Equal Employment Opportunity Commission report that cites data from the U.S. Bureau of Labor Statistics.
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But many fund workers over 50, like professionals across industries, may not get to pick their retirement date.
The ProPublica article suggests that the pattern of “involuntary” job loss in the industry mimics that of the broader workforce.
The nonprofit investigative publication and the Urban Institute, a Washington, D.C., think tank, analyzed data from the Health and Retirement Study, which is funded by the National Institutes of Health and the Social Security Administration. Since 1992 the study has tracked about 20,000 Americans from age 51 until their deaths. Their sample consisted of 2,086 people who were employed full-time at ages 51 to 54, were with the same employer for at least five years and were part of the study until at least age 65.
The analysis includes layoffs, but the authors also parsed the data to determine when the circumstances suggested departures from work were involuntary and due to deteriorating conditions or forced retirement.
The broader findings hold true for the subcategory of financial services, insurance and real estate professionals within their data set. Among those 133 individuals, 61% experienced an involuntary separation from work after age 50, according to the ProPublica and Urban Institute analysis.
Prep for Greater Scrutiny of Layoff Decisions
Laying off workers with higher salaries is entirely legal, lawyers point out. What complicates matters is that there’s a very strong correlation between older workers and higher pay, says Miller Canfield’s Norris.
The Age Discrimination in Employment Act prohibits employers with 20 or more employees from discriminating against workers over the age of 40 on the basis of their age.
The EEOC’s June 2018 report, which commemorated the 50th anniversary of the Age Discrimination in Employment Act, notes that the prevalence of age discrimination is difficult to determine because most people do not report such conduct. Yet more than 60% of workers age 45 and older say that they have seen or experienced age discrimination in the workplace, according to a 2017 AARP study cited in the EEOC report.
The EEOC received 18,376 claims of age discrimination in fiscal year 2017, down from 20,857 the previous year and 24,582 in 2008.
Most financial services professionals don’t go to the EEOC and are instead required to pursue age bias claims via arbitration due to clauses within their employment agreements, notes Outten & Golden’s Greene.
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We hear a lot of age-coded language,” says Greene. Companies place a lot of emphasis on “next generations,” she says, and use terms like “new energy” and “new ideas.”
“There’s still a strong bias that you can’t teach an old dog new tricks,” she says.