Age discrimination rises in recessions
Here are three of the week's top pieces of financial insight, gathered from around the web:
A Tesla-driven S&P 500 upheaval
Tesla's likely induction into the S&P 500 is "a big event for managers of index mutual funds and exchange-traded funds," said Sarah Ponczek at Bloomberg Businessweek. With its fourth consecutive profitable quarter, the electric carmaker recently met the favored index's requirements. At a market cap of $277 billion, "Tesla would be the largest company in dollar terms ever added to the index," and the ripple effects could be considerable. With Tesla's share price at around $1,500, managers of passive funds may have to sell $35 billion to $40 billion of shares in the rest of the index's companies "to make a hole big enough" for Tesla purchases to fit. What membership would mean for Tesla isn't clear. Recent research has found that the lasting effect on share price after index inclusion "has been downward."
More mortgage woes at Wells Fargo
Mortgage borrowers in 14 states say Wells Fargo put them into forbearance without asking, said Gretchen Morgenson at NBC News. The CARES Act allowed borrowers with government-backed loans to request forbearance on their payments for up to a year. But dozens of Wells Fargo customers say "they have been forced into" the plans without their consent. Some believe they got pushed into the program with a single press of a button on a Wells Fargo website. "This button shows up — if you've been affected by COVID, click here." Another customer says that a "Wells Fargo employee insisted that she 'mistakenly' applied" for forbearance. The forbearance is noted on credit reports, and among other issues leaves the borrower "stuck at Wells Fargo" and unable to refinance the mortgage at today's rock-bottom rates.
Age discrimination rises in recessions
Older workers are getting culled in the job market's "massive, rolling shakeout," said Brett Arends at MarketWatch. New research has found that "age discrimination rises hand in hand with the unemployment rate," and that older workers are often the first fired and last to be rehired. Economists at UC San Diego and the University of Georgia found that age discrimination suits rose dramatically alongside unemployment. They also analyzed a study of how likely employers were to call back applicants for an interview, and found that each 1-point increase in the unemployment rate raised the gap between older and younger womens' chances of getting called back by a startling 16 percent.
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