One of the many unfortunate repercussions of COVID-19 is that older workers will have an exceedingly more difficult time getting back on their feet. They’re more likely to be terminated and will certainly experience hardships finding a new job at the same level and compensation as the one they’ve lost.
The United States now has 30 million Americans who have lost their jobs since mid-March. This number excludes people who were already unemployed, those who gave up searching for a job and people who are working in roles far below their experience levels.
It’s not just ageism that causes a backlash against experienced workers. An unfortunate combination of a confluence of fast-growing trends may irrevocably harm the careers of professionals ranging from mid-30s and older. As companies will be tightening their belts to save money, they will also need to cut costs. Usually, this means downsizing people. There is a correlation between the age of an employee and his or her compensation level. As people climb the corporate ladder, their pay increases. Generally, older people have more time in the corporate world, so their pay is likely higher than workers who are out of college for only three to 10 years.
It’s economically convenient for companies to layoff well-paid workers, as there is a greater amount of money saved. It also leaves room for younger people to move up the ranks, so management doesn’t have to worry about losing fast-track talent. This trend, known as juniorization, calls for the culling of senior people and replacing them with lower-paid, younger folks.
Getting rid of mid-level management is happening as well. It’s not just the person who is let go, the position is completely eliminated. Companies are flattening out the hierarchy. Executives cut out layers of middle management to save costs and protect their own jobs at the same time.
Additionally, companies have been aggressively relocating positions to both lower-cost cities within the U.S. and to other countries, in an effort to streamline costs. It’s much less expensive to have a 20-something-year-old person working in Florida, Utah or India compared to a 45 year old based in Manhattan.
Professionals of a certain age have been disregarded in the past. The last financial shock, back in 2008, displaced a disproportionate number of experienced workers. According to an opinion piece in MarketWatch, “History offers a lesson in what the future holds for older Americans hoping to get back to work. In the last big jobs wipeout—the “Great Recession” of a dozen years ago—a study by the Urban Institute, a Washington-based think tank, said that although older workers generally experienced lower unemployment than their workers aged 25 to 34, it took twice as long to find work. A third of older job seekers (34%) were still looking after a year, and two-fifths (41%) were still searching after a year and a half.”
With millions of people actively looking for work, it will be easy for companies to get rid of high-priced, older workers and replace them with younger people desperate for work who will take far less money. Executives will rationalize, “Why should we pay a 45 year old $200k in Manhattan, when we can hire a 30-year-old person in North Carolina for over 50% less—or in India—for a fraction of the cost?”
You can see the evidence of this form of discrimination in current job descriptions. The advertisements ask for candidates with three-to-five years or so of experience when the role should call for someone with at least twice as much experience. Try to think of the last time you saw a posting for a person with 20 to 30 years of experience?
The job ads also liberally refer to new technology systems that may discourage older workers from applying. The titles offered are skewing lower at the “associate” or “assistant vice president levels,” which basically shut out senior people from applying. When you glance at the career sections of major corporations, they invariably show a wide array of young, vibrant and good-looking people. If you’re lucky, maybe you’ll see one token person with grey hair.
This could be a traumatic event. The more time that goes by, the job seeker gets a little older and their anxiety level grows exponentially. The fear of how they can afford to retire, pay their mortgage and children’s college tuition is palpable. If they stay out of work for a long period of time, hiring managers will think that something is wrong with them. They’ll assume the 40-plus year old can’t adapt to the new environment and look at someone younger.
If attention isn’t paid to this large group of people, we may have millions of chronically unemployed older people who can’t afford their homes and real estate taxes. Nor will they be able to support their kids and young-adult children that still need financial help, as they’ve also been hit by the economic downturn.