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