Fired at Fifty : Older Workers Feeling the Sting of Recession

When manufacturing engineer Ira Galor, 52, learned in January that his $58,000 aerospace job was being eliminated, he was shocked but not devastated.

After all, Galor had survived an earlier, near-total decimation of his department at Van Nuys-based ITT Gilfillan Corp., a unit of ITT Corp., that supplies radar systems to the Defense Department. Where 23 manufacturing engineers were employed eight years ago, only four, including Galor, had hung onto their jobs. So when his pink slip came this time, he remained hopeful.

“I thought with my knowledge and experience there would be no problem getting a job,” said Galor, a Woodland Hills resident whose only child is grown and whose wife does not work.

Wrong. He blitzed the market with 300 resumes but has only gotten seven interviews and no job offers. Though he continues to hunt exhaustively for work, Galor has grown worried and frustrated.

“How much can you do?” he asked. “Somehow I am getting the drift that I am being discriminated against.”

And Galor believes that he knows the reason--his age.

He is not alone. The Equal Employment Opportunity Commission reports the number of age-discrimination cases jumped 20% to 17,449 in 1991 after dropping the previous four years. The American Assn. of Retired Persons received 105,000 requests for information on age discrimination last year, a 155% increase over the year before.

Employment specialists say that companies--locked in cost-cutting modes and undergoing structural changes--frequently let go of high-paid older workers first, often via reluctant early retirement. Dan Lacey, editor of the Cleveland-based management newsletter Workplace Trends, says the process amounts to “an epidemic of age discrimination.”

Other workplace experts say that age discrimination--which is extremely difficult to prove--also shows up in employment offices. They say that older workers sometimes are denied access to jobs because of false stereotypes that suggest that they are slower and less adaptable than younger workers.

Although the 1967 Age Discrimination Employment Act protects most workers over 40 from bias in hiring, wages and fringe benefits, discharged workers who believe that they were cut because of age must cite specific examples of disparaging comments or age-related policies. It’s not sufficient merely to point to the fact that, say, more than 50% of a “reduction in force,” or RIFs as they are called, involves people over 50.

Two years ago, Congress amended the original legislation with the Older Workers Benefit Protection Act. That legislation mandates that if fired employees, as part of accepting a special-incentive program, sign releases forgoing age-discrimination claims, the waivers must conform to certain standards. For example, companies must disclose ages and job titles of others cut at the same time.

The result: If companies follow the rules, they are seldom vulnerable in court.

“A goodly number of people fired think it’s because of their age,” said Encino attorney Joseph Posner. “I think they’re right. If you see as much as I do, you have to believe there’s a concerted effort to get rid of older people. What I don’t see is the evidence to prove it.”

The number of age-discrimination complaints typically rises with increases in layoffs. Age-discrimination claims made to the EEOC peaked at 18,087 in 1983, reflecting job losses linked to the 1981-82 recession.

A new record will likely be established this year as companies continue to cut their payrolls. More than 1.25 million permanent positions have been eliminated by public companies in the last 3 1/2 years--more than 2,000 per business day, according to Workplace Trends.

No one knows how many of those were older workers, who as a group have a lower rate of unemployment than the work force as a whole. Still, the number of older workers being laid off is clearly growing.

The unemployment rate for people 50 and older was 5.2% in August, up from 4.1% the same month a year ago, according to the Labor Department. There were 1.31 million older employees out of work last month, compared to 985,000 a year ago, the government says.

Losing a job in one’s 50s can be traumatic--often coming years before retirement benefits kick in, yet at a time when mortgages and college-age children require hefty income.

West Orange, N.J., employment attorney Nancy Erika Smith knows the pain. She won an age-discrimination lawsuit against International Business Machines last fall on behalf of 57-year-old Richard Rathemacher, pressured by IBM into early retirement.

“My clients lose homes, pull children out of college, gain 100 pounds, start drinking heavily,” she said.

One, a 55-year-old corporate lawyer, removed his company watch and jumped off the New Jersey Palisades into the Hudson River below, killing himself the day he received word that his former employer would litigate the attorney’s age-discrimination claim.

Yet vast numbers of fired-at-50 veterans somehow summon the self-esteem, energy and courage to rebuild lives rocked at their foundation, and to hold families and homes together by sheer grit.

Greenwich, Conn., businesswoman Audrey Gersh Lewis learned three months after her 50th birthday that the job she loved--assistant vice president of marketing for a mutual fund management company--would be eliminated after her firm was taken over.

“I contacted everyone I knew,” recalled Lewis, now 58. “They all set up appointments, referred me to others and were unfailingly helpful. But no one hired me.”

One day she found herself standing on Park Avenue crying. The sole support of her two daughters, Lewis decided she had to turn herself into an example of courage and resourcefulness.

She set out to parlay her contacts into a marketing and public relations consulting business. Among her first clients were Wall Street acquaintances promoting new ventures, and she won referrals from New York PR guru Gershon Kekst. Today, Audrey Gersh Lewis Consultants Ltd. lists the Albany-based bank Keycorp and Vermont’s Joseph Cerriglia Winery among her clients.

When the going gets tough, Lewis reminds herself of today’s reality: “If I were working for a corporation now, I wouldn’t have any security.”

Indeed, the aerospace, auto, computer, financial services and telecommunications industries continue to struggle with wrenching consolidations that show no abatement.

Even alumni of the beleaguered aerospace industry note the swollen ranks of bankers at workshops such as those sponsored by Forty Plus, a group for older unemployed people. Big mergers such as Bank of America with Security Pacific on the West Coast and Chemical Bank with Manufacturers Hanover on the East Coast have thrown tens of thousands of bank employees out of work.

Three years ago, Carter McIntyre, 58, lost his job selling corporate trust services in Los Angeles for First National Bank of Boston when the company folded its West Coast office. For 10 months, he toiled in an Irvine investment bank, but bank credit was so tight he couldn’t close enough deals to earn a decent wage. McIntyre quit, and for 22 nerve-racking months searched for work.

Today he sells corporate-transfer services for the Wall Street firm American Stock Transfer at two-thirds his former salary. Because his pay includes commission, however, McIntyre sees the potential for eventually recapturing his former income.

“What saved me was that my wife works and I have low house payments,” said McIntyre, a Canoga Park father of two sons aged 23 and 19. He shudders to recall being out of work, watching his savings disappear, “having nothing to back me up.”

Beyond the obvious strain of paying bills and making ends meet, loss of a job in the 50s can deliver a devastating psychological punch.

“We see a lot of people who are bitter,” said Lisa Torres, counselor at the Career Encores/Job Club in Burbank. “They considered themselves at mid-stride in their careers. Financially, it’s a KO punch. They are on the edge, raw. They are terrified.”

Her agency operates a hot line for employers in search of mature workers and offers counseling to older unemployed. Last year about a third of the clients who sought its services found work.

Samuel A. Culbert, UCLA professor of human resources at the John E. Anderson Graduate School of Management, attributes some of the emotional trauma to the fact that American men are over-invested in work.

“(A man’s) self-concept comes from being a money producer,” he said. “Respect and prestige are anchored to job roles.”

Moreover, researchers claim that the job-hunting woes of people over 50 are compounded by some false stereotypes. For example, older workers are typically viewed as less creative than younger folks and often depressed.

But the truth is more complex: Although older people’s cognitive skills are slower, they compensate with improved judgment and thus perform equally or faster, researchers say. Other images, they claim, are dead wrong. Rather than depressed, older workers score higher than their juniors in job-satisfaction surveys.

While stereotypes erect one barrier, another often results from the youth of personnel department representatives who interview them. Perhaps unconsciously, these employer representatives too often view the applicants as parental figures and shy away from hiring them.

Last year, the Commonwealth Fund published a study concluding that older workers are both productive and cost-effective, and that hiring them makes good business sense. Three corporations that deliberately seek older workers because they are fed up with the high turnover and absenteeism of young people are profiled: Days Inns of America, Travelers Corp. and B&Q;, an operator of home improvement centers in Britain.

Counselors who run workshops to sharpen job-seeking skills suggest that job hunters are more likely to be successful if they are prepared to relocate, retrain and accept lower pay.

Ira Galor, however, has followed the rules with military precision, to no avail. He sent half his resumes outside of Southern California, understands that he must accept lower pay, enrolled in a class to upgrade his computer skills and searches for leads at Jewish Vocational Services, a non-sectarian agency funded by United Way.

When he began to get discouraged, he worried that perhaps he was part of the problem, so he underwent a psychological evaluation. The evidence suggested that he was not depressed and that he was in the right field.

“I feel disappointed, caged, frustrated, worried,” Galor said.

More and more idled seniors are concluding that their most realistic option is to set up their own business.

Bill Latto, 56, a mechanical engineer who accepted early retirement from Allied-Signal Aerospace in Torrance after the program he was working on was dropped, decided after a few interviews that there weren’t nearly enough aerospace jobs available to absorb the multitudes looking for work.

Latto, whose blood pressure shot up temporarily after he learned that his job was eliminated, specializes in an aerospace technology that he believes can be applied to the search for alternative fuels to power trucks, trains and cars. To that end, this spring he enrolled in a 10-week federal retraining program at El Camino Community College that focused on how to start a business.

Today, Latto, a father of three college students, works as a self-employed consultant on a new computer in his Torrance home. In addition to working on three different assignments, he has submitted a proposal to the South Coast Air Quality Management District for funding to explore the use of liquefied natural gas in transportation equipment.

“Every day I tell myself this experience is a benefit in disguise,” said Latto, attempting to bolster his resolve. “I now have a chance to go out and do something on my own. Everybody falls down sometime. The important thing is to get up and get going again.”

Age Discrimination Charges Rising

Age discrimination charges filed with the Equal Employment Opportunity Commission jumped last year after holding steady for the four previous years.