Age Discrimination in Employment: the 1978 Adea Amendments and the Social Impact of Aging

• Publication year: 1978

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 2, No.1FALL 1978

Age Discrimination In Employment: The 1978 ADEA Amendments And The Social Impact of Aging

Thomas J. Reed(fn*)

I. Introduction

In February, 1978, President Carter's executive reorganization plan transferred enforcement of the Age Discrimination in Employment Act (ADEA) from the Labor Department Wage-Hour Division to the Equal Employment Opportunity Commission.(fn1) In April, 1978, Congress enacted major amendments to the ADEA raising the mandatory retirement age for non-federal workers to seventy and abolishing mandatory retirement for nearly all federal workers.(fn2) The 1978 ADEA amendments altered the retirement programs of more than 50,000,000 American workers. It also restructured payment and collection of social security benefits and of retirement and profit sharing plan payments. By the amendments, Congress has attempted to reverse a long term historical trend toward early retirement and an increasing dependency ratio by providing guaranteed employment to age seventy for workers in private enterprise.

The 1978 ADEA amendments failed to solve many of the difficult technical problems involved in private suit enforcement of ADEA. The amendments attempted to overrule the United States Supreme Court's decision in United Airlines, Inc. v. McMann,(fn3) which insulated forced retirement under pre-1967 pension plans at company option before age sixty-five from ADEA sanctions. It is doubtful, however, whether Congress succeeded in overriding the Supreme Court. Congress also failed to correct many other technical problems disclosed in the ten-year life of the ADEA. This article will explore the sociology behind the original ADEA, the structure of the 1967 ADEA, its weaknesses and strengths during its ten-year life, and the effectiveness of the 1978 amendments in dealing with the problems inherent in the original Act.

II. Age Discrimination In Employment in America

A. History of Age Discrimination

One of the mixed blessings of our culture is the expanding life expectancy of each generation since the Civil War. In 1850, when the average male life span was estimated to be 40 years,(fn4) the problems created by modern trends toward longevity did not exist. By the 1960's, however, the United States had undergone a revolution in the make-up of its adult population. This revolution resulted, in large part, from this country's great social commitment in the last quarter of the nineteenth century to better health, better nutrition, and the development of preventive medicine. The immediate result of this campaign was a sharp decline in infant mortality, which made it possible for more persons to survive into adulthood and old age.(fn5) In 1900, 48 out of every 100 children born could expect to live to 60. In 1950, 76 out of 100 children born could count on living to 60.(fn6) According to the Bureau of the Census, the natural increase in population between 1900 and 1960 accounted for only half the increase in the number of persons over 60 between 1900 and I960.(fn7) Between 1880 and 1910, 18 million people immigrated to the United States,(fn8) mostly healthy young adults. This figure accounts for about 20% of the increase in older Americans between 1900 and I960.(fn9) The remaining component, attributable to declining infant and maternal mortality rates, increased life expectancy, and better medical care for older Americans, accounts for three-tenths of the increase in older Americans.(fn10)

Since 1900, American industry, responding to trade union pressure, has recognized an employee's right to retire, generally at age 65. Since World War II, many employers have adopted retirement pension programs which offer small retirement stipends to long service employees. An adjunct feature of many of these programs is an "early retirement program" by which an employer can force a worker into retirement before 65, at the whim of the employer. One side effect of this type of retirement program is an increasing dependency ratio. At the turn of the century, 94 nonworkers depended upon every 100 workers. Most of these dependents were children.(fn11) In 1950, after a substantial decline in the birth rate during the 1920's and 1930's, the dependency ratio was 74 per 100. By 1960, the ratio had increased to 89 per 100, reflecting both the postwar baby boom and an increasing number of unemployed persons over 50.(fn12)

During the same period, an average American's life span has increased while his work-life expectancy has declined. In 1900, a 20-year old worker had an average life expectancy of 42.2 years and a work-life expectancy of 39.4 years. In 1960, a 20-year old worker had a 49.6 year life expectancy, but his work-life had expanded only 3.2 years to 42.6 years. His retirement, therefore, expanded from 2.8 years in 1900 to 7.0 years in I960.(fn13) In 1970, there were 19,799,000 men and women over 65 in the United States.(fn14) 8,393,000 were males; 11,406,000 were females.(fn15) A generation earlier, in 1930, there were 6,644,000 men and women over 65, 3,333,000 males and 3,311,000 females.(fn16) In 1968, 837 out of every 1,000 persons over 65 received social security benefits.(fn17) In 1970, 16.4% of all persons over 65 were employed. 83.0% were not in the work force. Persons not in the work force included 8,534,000 who said they were keeping house, 5,316,000 who were retired, 1,546,000 who were in bad health, and 97,000 who were unable to obtain work.(fn18) It is therefore clear that work is not a significant factor in the support scheme or lifestyle of Americans over 65. Only 0.5% of all Americans over 65 were unemployed and seeking jobs.

This pattern is reflected in a lowering of the normal retirement age statistically. Although the American labor force increased 35% between 1930 and 1960, the increase was not spread uniformly throughout all occupational classifications. The number of public officials, lawyers, and accountants increased. Bakers, blacksmiths, boilermakers, carpenters, masons, painters, plasterers, seamstresses, laundry and dry cleaning workers, coal miners, and typesetters decreased in number. Totally new occupations associated with communications, computer technology, and aerospace technology have risen since 1930. One striking result of this uneven increase in occupational fields is the impact on older men and women in the work force. American males over 55 were proportionally underrepresented in the new occupations of the 1950's and 1960's.(fn19) This was counterbalanced by the over-representation of males 55 or older in such occupations as farming, real estate sales, locomotive engineers, tailors and furriers, guards and watchmen, and shoemaking.(fn20) The implication which may be drawn from this phenomenon is clear: industry is not interested in investing time and money in retraining older workers for jobs created by changing technology, nor are younger workers likely to accept jobs in trades or skills that are obsolescent. Thus, the impact of obsolescence falls more heavily on the shoulders of older workers.(fn21) During the 1960's, the rate of egress from the work force by workers over 55 more than compensated for the reduction in unemployment generally.(fn22) This trend has continued throughout the 1970's, and may have been accelerated by the recessions of 1970-71 and 1975-77. When older workers who are willing to work are laid off, they are out of work for much longer periods than workers under 45.(fn23) The percent and relative number of American workers over 45 has been declining since 1950. This phenomenon has not been offset by retirement programs, by social security benefits, or by a meaningful alternative to employment for men over 45 who are dismissed from the work force before "normal retirement" at 65. This condition, which was recognized as early as 1951,(fn24) is the phenomenon of age discrimination in employment.

B. 1950 Conference on Aging: Recommendations for Legislation

The First National Conference on Aging, initiated by President Truman in 1950, produced a pioneer study on the impact of aging on the American work force. The study, called Man and His Years, An Account of the First National Conference on Aging,(fn25) concluded, among other things, that a trend for early retirement for workers aged 55-65 had appeared as early as 1940,(fn26) and persisted into 1950.(fn27) The study cited both voluntary and involuntary factors contributing to this decline. The voluntary factors included increased per capita income, higher savings, old age and survivors insurance benefits, pension programs, and charitable relief for poor persons.(fn28) The involuntary factors cited were changing production technology, physical ability, increasing job eligibility standards, and a decline in demand for certain jobs populated by older workers.(fn29) Man and His Years tentatively concluded that this decline was probably the product of involuntary factors, rather than a voluntary shift to earlier dates for opting out of the work force.(fn30)

Man and His Years also cited the retirement policy of companies as a major reason for quitting the work force.(fn31) In 1950, compulsory retirement generally occurred at 65. Man and His Years contained an extensive discussion of compulsory retirement practices,(fn32) concluding that raising the compulsory retirement age, or doing away with compulsory retirement altogether, would not significantly raise...