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Age Discrimination Costs the Nation $850 Billion, Study Finds

Bias against older workers hurts economic growth

En español | New research has put a price tag of the financial impact of age discrimination in America — and the bottom line is staggering. Bias against older workers cost the U.S. economy an estimated $850 billion in gross domestic product (GDP) in 2018, according to a report from AARP and the Economist Intelligence Unit released Thursday.

That amount — roughly equivalent to the size of Pennsylvania's economy — suggests that age-related bias in employment not only hurts older Americans but also damages the fortunes of the nation at large. By 2050, losses due to age discrimination could climb to $3.9 trillion, comparable to the current GDP of Germany.

"This important report shows the cost to the entire economy of discriminating against older workers,” said Debra Whitman, AARP's executive vice president and chief public policy officer. “The economy in 2018 could have been 4 percent larger if workers did not face barriers to working longer."

By 2050, losses due to age discrimination could climb to $3.9 trillion

The study is the latest release in AARP's Longevity Economy(R) outlook series, a group of reports that illustrate the sizable contributions older Americans make to the nation's overall health. For this latest report, researchers surveyed 5,000 people age 50 and older last summer to determine how age discrimination affected employment opportunities. The survey asked respondents whether they had experienced:

  • involuntary retirement due to age bias;
  • part-time employment because they couldn't get full-time jobs;
  • missed opportunities for raises;
  • lost earnings following layoffs or terminations; or
  • longer periods of unemployment compared to younger workers.

Researchers then ran the data about these experiences through a formula that calculated how much older workers might have contributed to the economy were it not for the discrimination they experienced. The study found that 57 percent of the $850 billion lost can be attributed to involuntary retirement. In fact, one-third of that total lost GDP is from women being forced to retire sooner than they would prefer due to age discrimination, the research found.

The study underscores the need to find ways to prevent age-related bias from halting the careers of older workers. The U.S. House of Representatives passed bipartisan legislation this month to combat age discrimination — the Protecting Older Workers Against Discrimination Act (POWADA). AARP has urged Congress to pass the law for 10 years. Companion legislation has not yet moved forward in the Senate.

"The House vote sends a strong bipartisan message that age bias has to be treated as seriously as other forms of workplace discrimination,” said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. “Age discrimination is widespread, but it frequently goes unreported and unaddressed."

The report on the potential GDP growth lost to age discrimination suggests some steps employers can take to help older adults continue to work. These measures include increasing flexible work options and creating more opportunities for these employees to continue to develop their skills. The research found that adding options for flexible and part-time work would have encouraged 75 percent of people age 50 and older to stay in the workforce longer. Offering more pathways to get additional training would have helped 55 percent of older adults to continue working, the study found. The researchers also recommend that employers build workplaces in which employees of different ages can learn from each other, which is known as a multigenerational workforce.

"Studies have shown that older workers are highly engaged, with low turnover, and often serve an important role as mentors,” Whitman said. “Their expertise helps businesses and pays big dividends for the economy as a whole. Employers who embrace age diversity will be at an advantage."