The purpose of this report is to examine the topic of hiring the elderly in Latvia from a business ethics point of view. Since there are several tendencies, like ageing population, lack of labour-force, a shift towards western values and standards of company conduct, etc., that are observable in Latvia, the authors believe this complex issue to be of significant importance and controversy.
While putting forward the principle-based argument that age discrimination of elderly work candidates is morally wrong, the paper discusses the consequences of hiring elderly and also common misperceptions of these consequences and of elder workers’ capabilities. Conflicting economical and social values are identified and discussed, affected interest groups are considered, and a possible solution - applying a tax allowance for companies that hire elder people – is presented and its effects on the different interest groups are considered in this report as well. Additionally, a hypothetical calculation model of what such a policy would cost to the government with explanations is included, and also benefits and costs to various stakeholders are looked upon. The few currently implemented government incentives to deal with this issue are reviewed, as well as possible alternative solutions apart from a tax allowance. Conclusions are given at the end, the main result being that there is a need for further state support to the elderly in the labour market, and a tax allowance being found to be the most suitable means for that in Latvia. The information used is mainly derived from published material in form of internet publications, relevant textbooks, and personal interviews with managers of companies and the elderly employees.
Table of Contents
Scrooge vs. philanthropist4
Urgency or Demographics of Trouble4
Age Discrimination at its Finest5
Price of Experience or First Out5
Unrealised Advantages or Last In6
Values against values or Subconscious Power Struggle6
The Principle of Non-discrimination7
Kant’s Theory (ethics of duty)7
Stakeholders or Who is in8
The Young Jobseekers10
Suggestions for Improvement10
Presenting the Model10
Incentives to Act or Why Should They Bother11
Discrimination or from Old to Young?12
The Next Best Thing13
Economic modelling of the effects of suggested tax allowance16 Appendix B17
Scrooge vs. philanthropist
When a company has to make a decision if to hire an older person, the HR people are facing a conflict of two major values. On one hand, the law states that the company should not discriminate among candidates on the basis of age. On the other hand, it is a common perception that, due to lack of flexibility, relative underdevelopment of particular skills (computer literacy being mentioned most often in this context), or decreased ability to learn new things, elder persons are less efficient, i.e., less valuable to the company, and hiring them would oppose the economic efficiency criteria of the company. If we consider the triple-bottom-line model presented by Crane and Matten (20, 2004), the economic sustainability component is in conflict with the social sustainability component when the company evaluates whether to hire and elder person or not. What seems to be the case currently in Latvia is that the economic criterion is given more attention than the social one. Whether the economic aspect is really disadvantageous to the elderly, and what is the role of the social component, will be discussed in the following sections.
Urgency or Demographics of Trouble
The National Report on Adequate and Sustainable Pensions (2005) constitutes that people receiving pension already comprise 21.8% of Latvia’s population. According to their...