June 23, 2010

Designed to reward age discrimination?

The French government is proposing to raise the age when retirees can draw down full pensions, which sounds remarkably like the 1980s reform of Social Security, including the bump of two years, except that France is going from 60 to 62 and we're already at 67... and a logical compromise for extending the solvency of Social Security indefinitely would combine lifting the cap on income taxed by Social Security and another hike in the full-benefits age from 67 to 69 or 70.

But there's a problem, as Matthew Yglesias points out: the growing population of long-term unemployed in this recession are tending to be (or at least disproportionately are) older workers who will have a much harder time finding work than young adults with a college degree.

... which lands us in the lap of teacher layoff discussions and state pension plans. Many of the arguments against basing layoffs on seniority are focused on the presumed incompetence of some unidentified segment of older teachers. Sometimes that's thinly-disguised age discrimination, sometimes it's not. But let's suppose there isn't even the thinnest veneer of age discrimination. What would happen to someone in their late 50s who is fired or laid off by a school system? Sometimes older teachers have careers after they retire, but I suspect a good portion don't, and I don't think it's smart public policy to ignore labor-market discrimination. State or local pension plans with health benefits can provide a buffer against the labor market because a teacher who is eligible for a pension at 55 or 60 can probably make ends meet until Social Security kicks in, especially with at least a part-time job.

Then again, some of those who would love to destroy tenure also would love to remove public obligations to pension plans. So I have one question for the proponents of the combination: what do you expect someone to do if they're 57 and fired or laid off and the pension and retiree health benefits they expected suddenly evaporate? I can understand if an individual employer says, "That's not my problem," but it's lazy wonkery to propose a set of policies that make people highly vulnerable to age discrimination and then walk away.

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Posted in Education policy on June 23, 2010 12:00 AM | Submit