(W)age discrimination revisited

I may have understated the problem last Saturday when I contended that age discrimination can be explained, at least in part, by expectations about the future:

If a company takes a chance and hires the older person for $40K, there is the real possibility that another company might come along two months later and decide to pay that person something closer to their previous salary. Then the company is out time and money, plus having their technology exposed to someone who's gone. It's a lot easier just to hire someone who's happy to get the $40K to begin with.

I still believe that's a real mechanism, but The New York Times has quite the sobering article:

But unemployed baby boomers, many of whom believed they were still in the prime of their careers, are confronting the grim reality that they face some of the steepest odds of any job seekers in this dismal market. Workers ages 45 and over form a disproportionate share of the hard-luck recession category, the long-term unemployed — those who have been out of work for six months or longer, according to the Bureau of Labor Statistics....Even when they finally land jobs, they typically experience a much steeper drop in earnings than their younger counterparts.

The piece also cites the fairly well-known study in which a professor sent out resumes that differed only in age. Younger workers were 40% more likely to be called for an interview.

There's a real disconnect here among various trends:

• We're going to "reform" Social Security at some point by delaying payouts (we've already done that to some extent) under the theory that people are living longer and, therefore, can work longer.
• An inability to effect meaningful monetary policy has created the necessity of less-effective fiscal policy, which is justified by one and all as filling the need of getting the un- and underemployed back to work, soaking up all that unused capacity.
• Workers over 45 are finding it hard to stay employed or get reemployed - and they're only about halfway through their working lives.

These simply don't fit together, in that we have an experienced population that is going to be asked to work longer at jobs that don't exist for them. There will likely be people who contend that this is a good thing, that workers will have to plan their lives better, not count on 40 years of earnings and Social Security.

I'm not qualified to talk about whether this will eventually be better in the sociological sense. What I do know is that the large number of folks who worked under the old assumptions are going to be in a lot of trouble as the world changes, and we as a society ought to figure out how we're going to look after Grandma and Grandpa when their security guard jobs are still not enough to keep them from eating cat food.