Everyone knows that discrimination harms the individual who is being discriminated against. Few consider that there is a quantifiable cost associated with bias and that entire economies suffer when certain people are excluded. However, as you’ll soon see, research makes it clear that this is the case. In this blog post, we’ll look at how discrimination affects economies around the world, with special interest paid to ageism.
The Economic Impact of Discrimination
One study found that discrimination costs France billions of euros annually. The paper by France Stratégie reported that France could gain €150 billion over 20 years by giving women and minorities more access to employment. This would represent an overall 6.9% increase over the country’s gross domestic product in 2015 and a 0.35% increase in GDP annually.
Meanwhile, the United Kingdom’s Centre for Economics and Business Research and INvolve found that the UK economy lost £127 billion every year through discriminatory pay practices. It was estimated that GDP would increase by about 7% if discrimination on the basis of sexual orientation, gender, and ethnicity came to an end.
Research in the United States specifically relating to age discrimination also indicated significant losses. A report from the American Association of Retired Persons and The Economist Intelligence Unit said the economy could have been four percent larger if individuals weren’t discouraged from working longer. It was estimated that discrimination against older workers cost the economy $850 billion in GDP in 2018, and by 2050, the number could rise to $3.9 trillion. According to the study, 57% of the $850 billion was linked to forced retirement. One-third was caused by women who were forced to retire earlier than they wanted to because of their age.
Similar concerns exist in Australia, where Deloitte Access Economics found that there are economic costs linked to the low number of older Australians in the labor force. Deloitte Access Economics said an increase of just three percentage points in labor force participation among employees aged 55 and over would boost GDP by $33 billion. Meanwhile, a 5% rise in paid employment among this demographic would lead to a $48 billion increase in national income.
These studies illustrate the significant value that exists in encouraging and facilitating labor force participation from mature employees. When companies embrace 50-plus employees, they don’t only make their organizations more productive; they also contribute to growth in the country’s economy. This means that despite the preference for younger workers in most companies, there’s a lot to be gained by hiring and retaining mature talent. Building a multigenerational workforce can be difficult, but it’s not impossible.
How to Overcome Age Discrimination
Shifting demographics mean organizations need to identify and address ageism. Not doing so will have a negative impact on economies. While a lot needs to be done at the governmental level, businesses can take steps to diversify their workforce. Age discrimination tends to be taken less seriously than other forms of discrimination, and in many cases, it’s not even recognized. A number of workplace practices would have to be addressed to prevent mature employees from being forced into retirement. It also means eliminating age-related biases in the hiring and promotions processes.
A number of negative stereotypes surrounding older workers also have to be confronted. For example, there’s a belief that older workers are too costly to hire or retain. However, the increase in costs may actually be minimal given the high productivity and engagement and low turnover of mature workers. People also believe that 50-plus employees aren’t in touch with technology. However, organizations tend to ignore them when it’s time for training.
Educating mature employees on new tools and technologies and tailoring the training to their needs can help to keep them in the workforce longer. Research shows that multigenerational workforces are more productive, and contrary to popular belief, workers of varying ages enjoy and value opportunities to learn from each other.
Make the Necessary Changes with Help from WiseForce Advisors
Age inclusion is a must. People are living longer, and many want to continue working so they can earn an income and contribute to their areas of specialty. Their expertise brings significant benefits to their employers and the economies of their countries. If you want to get a better handle on ageism in your organization and reap the benefits of a multigenerational workforce, WiseForce Advisors is here to help. We offer a range of interventions that will be tailored to your specific needs. Reach out to us today to get started with building a more age-inclusive workforce.