Unemployment: Companies Cut Pricey Older Workers

High salaries and medical costs make older workers casualties in new recession.

ByABC News
March 9, 2009, 6:00 PM

March 10, 2009 — -- Barbara Polahmius said she devoted 13 years to a small California health care agency -- getting rave reviews for her performance, mentoring other employees and taking on extra tasks that weren't part of her job description.

But when the nonprofit was taken over by a large conglomerate eager to cut costs, she was the first to go.

In October, at the age of 58, the Santa Cruz medical information analyst was laid off, replaced by a co-worker -- "a lovely girl," half her age -- whom she had trained.

"I absolutely believe it was my age," she told ABCNews.com. "We were the ones who know about hard work and have accumulated a lifetime of knowledge.

"I couldn't prove it, but I just felt that I was going to be the one they decided to ask to leave," said Polahmius, who has twice survived cancer and is disabled with fibromyalgia. "My health care costs were not inconsiderable."

Anecdotally, some recruiters say they are filling positions once held by older workers -- defined by the federal government as those over 40 -- with eager, inexperienced college graduates.

Though there are no U.S. Labor Department statistics to back up these claims, some lawyers and economists say older workers are easier to let go in a recession when layoffs are happening by the millions.

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"People don't like old people, it's as simple as that," said Janice Goodman, a New York City labor lawyer who specializes in discrimination cases. "They are too comfortable and they don't know new things."

Finding ways to shed older employees -- who are at the top of the salary food chain and cull expensive medical and pension perks -- is nothing new, according to experts.

"It's not surprising if it's happening now," said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. "What you might see in any time when there are large-scale layoffs, is the fudge-ability increases."

"Let's face it," he told ABCNews.com. "To the extent a company may feel that it is to their advantage -- and I am not saying it's the right or wrong thing to do -- when they are making small-scale cuts, it's more difficult than when they are making large cuts.

"There is more flexibility in determining who is going to go when there's an environment where survival is the key and they are looking for ways to maximize their cost savings."