Are Boomers Being Targeted In Layoffs To Cut Health Care Costs?

If this is true, this is exactly why it would be such a good idea to lower the Medicare age to 55 - because otherwise, industry paints a target on eve

If this is true, this is exactly why it would be such a good idea to lower the Medicare age to 55 - because otherwise, industry paints a target on every Boomer back:

Every day there's another layoff announcement, so Sean O'Grady finds himself confused about why his Philadelphia-based recruiting company, CareerTV USA Inc., is doing so well.

"We had to shake our heads at that," he said, "because we're doing our best sales ever, and we had our best quarter at the end of 2008."

So O'Grady started asking his clients to explain why they are bothering to recruit in these times, even when, in some cases, they are cutting back on hiring.

What he learned and what he is seeing "is the layoff of the baby-boom generation. Companies are filling those holes with bright-eyed, bushy-tailed college graduates.

"They are essentially trying to hire people they can pay less and get a lot of energy and enthusiasm," said O'Grady, 26, a senior producer at CareerTV.

[...] One was Andrew Vavra, 55, of Schwenksville, an unemployed marketing project manager. He had been to a another job fair recently "and no one under 40 was there," he said. "It made me angry.

"They are laying off older workers to reduce their pension exposure and their health-plan exposure," he said. "The young people are being hired in without medical plans and pension plans."

What is clear, said economist Joel Naroff, is that companies are using the recession to reconfigure their workforces - and that is what they should do.

"There is a popular phrase - 'don't waste a perfectly good crisis'," said Naroff, chief economist with TD Bank N.A. "The idea behind that is you can do things you couldn't do under a normal set of circumstances. You have the opportunity to make the changes that you really should have made before."

Companies that cut jobs just to shave expenses will not be prepared when the economy rebounds. The cuts should be strategic to position the companies for the future, said Naroff, of Holland, Bucks County.

If companies are going to announce layoffs of 5,000, he said, it does not give them much more of a publicity problem if they say they will lay off 5,500, with the idea of getting rid of "dead wood" or entire unproductive divisions. "It looks the same to the public."

"Now they've been given free hand to do it," Naroff said. In a sense, "the economy gives them cover."

About Susie Madrak

Comments

We welcome relevant, respectful comments. Please refer to our Terms of Service for information on our posting policy.