Social Security Formula Benefits the Rich & Penalizes the Poor

Here’s something that will surprise no one but Washington, D.C. bureaucrats – the vast majority of older Americans claim their Social Security benefits long before they reach age 70, incurring a penalty of more than 30 percent .

Roughly three-quarters of Americans claim benefits prior to age 70 because they are not working, need the money, fear Social Security will be cut and suffer from  poor health.

About 22 percent of older Americans have a gap of two or more years between retirement and claiming their Social Security Benefits. They rely upon employer-sponsored pensions and other savings to finance the delay.

These were the findings of a nationally representative survey on individuals’ claiming choices called Social Security Claiming Decisions: Survey Evidence. The survey was conducted by economists John B. Shoven of Stanford University, Sita Nataraj Slavov of George Mason University, and David A. Wise of the National Bureau of Economic Research.

SSA Claiming Age
Ages of those surveyed who had claimed Social Security benefits.

Continue reading “Social Security Formula Benefits the Rich & Penalizes the Poor”

Senate Aging Committee asked to Investigate EEOC’s Inequitable Treatment of Age Discrimination Cases

This blog has asked the U.S. Senate Special Committee on Aging to investigate the U.S. Equal Employment Opportunity Commission for essentially discriminating against older workers in the adjudication of age discrimination complaints.

The EEOC recently dismissed two cases where highly qualified older job applicants were passed over for far less qualified workers under the age of 40 (some were recent graduates). The EEOC ruled that it is not illegal for employers to make hiring decisions based entirely on subjective considerations (i.e., cultural fit).  The EEOC offered no legal support for this position, which is contrary to the EEOC’s position in race discrimination cases and well established law. The U.S. Supreme Court ruled in 2006  that an employer’s failure to hire a candidate who is significantly better qualified for a job may raise an inference of illegal discrimination.

The EEOC also ignored serious procedural irregularities by the federal hiring agencies in both cases.

The Senate Special Committee on Aging, chaired by Maine Sen. Susan M. Collins, is authorized to conduct oversight of federal programs and to investigate reports of fraud and waste. In the past, the Committee has championed the rights of age discrimination victims.

For years, the EEOC has all but ignored its Congressional mandate to enforce the Age Discrimination in Employment Act of 1967 (ADEA). The EEOC received more than 20,000 complaints of age discrimination in 2016 –  almost a quarter of all  of the complaints filed with the EEOC that year -but filed only two lawsuits with “age discrimination claims.” The EEOC was taunted by the U.S. Chamber of Commerce in 2015 for operating a hiring program that discriminates on the basis of age.

When President Lyndon Johnson signed the ADEA fifty years ago, he said its sole purpose was to ensure the most qualified candidate gets the job. The ADEA prohibits using age as a factor in employment decisions except in very limited circumstances that are not relevant to the two cases in question.

Cultural Fit

In August, the EEOC upheld a decision by Carlton M. Hadden, Jr., the director of the EEOC’s Office of Federal Operations, to dismiss an age discrimination case where a middle-aged male hiring officer for the Social Security Administration (SSA) testified he ignored objective qualifications and hired four applicants under the age of 40 based on his perception of how well they would fit within the culture of the office.  The complaint was filed in 2011 by a 60-year-old female attorney who was not selected, despite having what the hiring officer admitted were superior qualifications when compared to most or all of the successful candidates. Initially the hiring officer said she lacked enthusiasm during a 20 minute telephone interview.

The EEOC’s ruling conflicts with a guidance published by the EEOC in 2006 that states hiring based on cultural fit is discriminatory in the context of race.  Even the business community knows that hiring based on cultural fit is fraught with potential for prejudice and bias.

The EEOC also failed to punish the SSA for violating its legal obligation to insure the investigation of the age discrimination complaint was fair and impartial. Hadden acknowledged that SSA attorneys “improperly” interfered in the investigation of the case in violation of EEOC Directive  for 29 C.F.R. Part 1614 (EEO MD-110) at Chapter 1, Section  IV.  However, Hadden merely reminded the SSA to be “careful to avoid even the appearance that it is interfering with the EEO process.”


In the second case, Hadden ruled that a 48-year-old white male police detective who had 20 years of high-level experience in law enforcement, failed to show he was more qualified for promotion to the position of lead officer at a Texas veteran’s  center than a female African-American in her 20s whose experience was limited to a stint in the Army military police. Hadden writes that the female candidate “arguably has more experience in the intangible areas sought by the (hiring panel), such as poise, compassion, leadership potential, and the ability to cope with stress…”  So-called intangibles like “poise” and “compassion” are  similiar to “cultural fit” in that they are subjective assessments that are prone to conscious and subconscious bias.

It is well established in the law that an employer’s reliance on subjective criteria for significant personnel decisions may be viewed as circumstantial evidence of discrimination.*

Hadden also disregarded evidence that the veteran’s center violated its own regulations and union Collective Bargaining Agreement in the hiring proces. Hadden said the complainant failed to prove the veteran’s center “intended” to discriminate when it failed to follow the rules.Courts generally consider an employer’s failure to follow its own rules in employment matters to be evidence of discrimination.**

Since the EEOC operates in virtual secrecy, the public has no way to know how many age discrimination complaints have been dismissed by the EEOC on spurious grounds.

EEOC decisions typically are shrouded in secrecy.  The complainant in the SSA hiring case spoke up and the EEOC published Hadden’s decision in the veteran’s center case in a recent digest of EEOC decisions, presumably to serve as precedent to follow in future cases. Continue reading “Senate Aging Committee asked to Investigate EEOC’s Inequitable Treatment of Age Discrimination Cases”

EEOC Refuses to Comment About Allowing Hiring Officer to Ignore Objective Qualifications in Age Discrimination Case

Acting EEOC Commissioner Victoria A. Lipnic

The EEOC  has declined to comment on its decision to uphold an administrative ruling that dismissed an age discrimination case where a hiring officer said he ignored objective qualifications and hired workers based on cultural fit. 

The ruling by Carlton M. Hadden, director of the EEOC Office of Federal Operations, involved an allegation of age discrimination by a 60-year-old woman who was not selected for one of five vacancies for the position of attorney decision-writer at a new Social Security Administration office in Reno, NV in 2011.

The novice hiring officer testified that he completely ignored objective qualifications when he selected five applicants under the age of 40.   After three or four applicants declined the job, the hiring officer selected a 42-year-old male applicant. The hiring officer initially said he rejected the 60-year-old female applicant because she lacked enthusiasm during a 20-minute telephone interview. He agreed  she was more objectively qualified than most or all of the other applicants but said she did not fit within his perception of SSA “culture.” 

Hadden upheld an Administrative Law Judge’s finding that “reliance on subjective criteria is appropriate and necessary when the selection, as here, involves consideration of collegial, professional, teamwork, and administrative abilities that do not lend themselves to objective measurement.” Continue reading “EEOC Refuses to Comment About Allowing Hiring Officer to Ignore Objective Qualifications in Age Discrimination Case”

Social Security Penalizes the Poor & Rewards the Rich

inequality I went to a restaurant recently where a server, a man who appeared to be in his late 60s, had obvious hearing problems despite wearing a hearing aid.  We had to repeat our food order and he forgot my wine (or perhaps never heard me order it).  It made me think about the pressure that older workers are under to remain in the workplace as a result of the Social Security Administration’s discriminatory benefits formula.

The formula is rigged to benefit those who stay in the workplace the longest. If workers retire at age 62 – the earliest possible age –  they suffer a 33 percent loss in their monthly benefit for the rest of their lives compared to workers who wait until age 66.  If workers can hold out and retire at age 70 – the oldest retirement age in the formula – they will receive a benefit that is 75 percent higher than if they had retired at age 62.

The problem is that many, if not most, older workers have little real choice about whether they will remain in the workforce.

Voya Financial, Inc. recently released findings from a poll  of 1,002 recent retirees that found 60 percent had to stop working unexpectedly. Thirty-three percent said they left their jobs involuntarily. Of this group, 16 percent had to retire because of health challenges, 11 percent lost their jobs, three percent had to stop working because they had to care for a spouse or dependent, and an additional three percent retired involuntarily because of their age.

Once an older worker is jobless, the chance that he or she will find new employment is almost nil due to epidemic, blatant and unaddressed age discrimination in hiring. These jobless older workers are forced to spend down their savings and work in low-paid part-time and temp jobs until they age into a financially ill-advised early “retirement.”   The AARP reported in February that older job seekers represented 24 percent of the unemployed in March 2013 but 31 percent of the long-term unemployed. The AARP cited one study showing that only about one in nine long-term unemployed workers had steady full-time jobs 12 months later. Older non-Hispanic blacks had the highest rate of long-term unemployment (57 percent), followed by Hispanics  (53 percent) and whites (47 percent). How ironic that these Americans are subjected to discrimination a second time –  by the Social Security Administration!

The Social Security benefits formula penalizes the poor.

Continue reading “Social Security Penalizes the Poor & Rewards the Rich”