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The Tech Industry's Secret: Ageism or Business As Usual?

Imagine spending thousands of dollars and at least four years in college to land a job in a field that you adore, only to find that thirty years later, around the age of 50, your salary drops 14%. Worse yet, imagine being replaced by a new graduate and suddenly unemployed.

Unfortunately, this is a very real scenario that faces workers in the tech industry. An article by Vivek Wadhwa includes analysis of data provided by the Bureau of Labor Statistics and Census, where two professors, Clair Brown and Greg Linden found that people employed in engineering, technology or the software industry, experienced a drop in their salaries by 17% after the age of 50. Employees in their 30s however, are more likely to experience a dramatic increase in salary, which starts to slow down and decrease by the age of 40.

According to Brown and Linden’s analysis, those with masters degrees or Ph.Ds experienced a drop in salary of 14%, with salary increases being lower than those with bachelor’s degrees. This is a rather discerning indication that even the education or degree you have, may not make much of a difference.

Apparently, people in the tech industry are already aware of this dilemma, but it has become a dark secret that no one really wants to talk about. Employers can’t legally single out employees over 50 and deny employment because of age, and no one is told when they start a job that 20 years of loyalty and dedication to the company may be rewarded with a ticket to the unemployment line.

(Photo Credit: Gabor Cselle [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons)

According to Vivek Wadhwa, a few reasons that the salary drop occurs after the age of 50 in these particular fields include the following:

  • Older professionals may cost more and have out-of-date skills.
  • Fresh graduates with no skills can be paid entry level salaries.
  • The younger employees understand new technology better.
  • Older workers generally have families and may be less flexible than younger employees.

Basically, why pay someone older a salary of $150,000 a year when you can pay a new graduate, with new ideas and a fresh slate to work with, $60,000 a year? Some tech companies can barely afford to pay the minimum in the first place, and cutting costs by hiring new graduates serves as justification and most likely the primary factor in making these decisions.

Although wrong and definitely unfair, if you are over 50 and employed in the tech industry, you may want to keep a few of Wadhwa’s suggestions in mind. Move up the ladder into management, form close relationships with executives in the company, keep skills current, and by all means, make sure you’re putting away some of the money you earn while you are being paid well during that 30-40 window.

Whether over 50 or starting out as the new generation of tech workers, it’s best to know what you are up against. You can’t put a price tag on the experience or wisdom gained from years of employment. Until companies realize this, it’s best to have a plan and protect yourself.

Tell Us What You Think

We want to hear from you! In the tech industry, is it just good business sense to replace older employees with younger graduates? Share your thoughts on Twitter or in the comments!

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