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Silicon Valley’s Dark Secret: It’s All About Age (age discrimination in the tech sector)
Tech Crunch ^ | 1 Sep 2010 | Vivek Wadhwa

Posted on 09/01/2010 8:33:44 AM PDT by a fool in paradise

An interesting paradox in the technology world is that there is both a shortage and a surplus of engineers in the United States. Talk to those working at any Silicon Valley company, and they will tell you how hard it is to find qualified talent. But listen to the heart-wrenching stories of unemployed engineers, and you will realize that there are tens of thousands who can’t get jobs. What gives?

The harsh reality is that in the tech world, companies prefer to hire young, inexperienced, engineers.

And engineering is an “up or out” profession: you either move up the ladder or face unemployment. This is not something that tech executives publicly admit, because they fear being sued for age discrimination, but everyone knows that this is the way things are. Why would any company hire a computer programmer with the wrong skills for a salary of $150,000, when it can hire a fresh graduate—with no skills—for around $60,000?  Even if it spends a month training the younger worker, the company is still far ahead. The young understand new technologies better than the old do, and are like a clean slate: they will rapidly learn the latest coding methods and techniques, and they don’t carry any “technology baggage”.  As well, the older worker likely has a family and needs to leave by 6 pm, whereas the young can pull all-nighters.

At least, that’s how the thinking goes in the tech industry.

(The lines represent the 10th, 50th and 90th percentiles of the sample)

In their book Chips and Change, Professors Clair Brown and Greg Linden, of the University of California, Berkeley, analyzed Bureau of Labor Statistics and census data for the semiconductor industry and found that salaries increased dramatically for engineers during their 30s but that these increases slowed after the age of 40. At greater ages still, salaries started dropping, dependent on the level of education. After 50, the mean salary of engineers was lower—by 17% for those with bachelors degrees, and by 14% for those with masters degrees and PhDs—than the salary of those younger than 50. Curiously, Brown and Linden also found that salary increases for holders of postgraduate degrees were always lower than increases for those with bachelor’s degrees (in other words, even PhD degrees didn’t provide long-term job protection). It’s not much different in the software/internet industry. If anything, things in these fast-moving industries are much worse for older workers.

For tech startups, it usually boils down to cost: most can’t even afford to pay $60K salaries, so they look for motivated, young software developers who will accept minimum wage in return for equity ownership and the opportunity to build their careers. Companies like Zoho can afford to pay market salaries, but can’t find the experienced workers they need. In 2006, Zoho’s CEO, Sridhar Vembu, initiated an experiment to hire 17-year-olds directly out of high school. He found that within two years, the work performance of these recruits was indistinguishable from that of their college-educated peers. Some ended up becoming superstar software developers.

Companies such as Microsoft say that they try to maintain a balance but that it isn’t easy. An old friend, David Vaskevitch, who was Senior Vice-President and Chief Technical Officer at Microsoft, told me in 2008 that he believes that younger workers have more energy and are sometimes more creative. But there is a lot they don’t know and can’t know until they gain experience. So Microsoft aggressively recruits for fresh talent on university campuses and for highly experienced engineers from within the industry, one not at the expense of the other. David acknowledged that the vast majority of new Microsoft employees are young, but said that this is so because older workers tend to go into more senior jobs and there are fewer of those positions to begin with. It was all about hiring the best and brightest, he said; age and nationality are not important.

So whether we like it or not, it’s a tough industry. I know that some techies will take offense at what I have to say, but here is my advice to those whose hair is beginning to grey:

  1. Move up the ladder into management, architecture, or design; switch to sales or product management; or jump ship and become an entrepreneur (old guys have a huge advantage in the startup world). Build skills that are more valuable to your company, and take positions that can’t be filled by entry-level workers.
  2. If you’re going to stay in programming, realize that the deck is stacked against you. Even though you may be highly experienced and wise, employers aren’t willing or able to pay an experienced worker twice or thrice what an entry-level worker earns. Save as much as you can when you’re in your 30s and 40s and be prepared to earn less as you gain experience.
  3. Keep your skills current. This means keeping up-to-date with the latest trends in computing, programming techniques, and languages, and adapting to change. To be writing code for a living when you’re 50, you will need to be a rock-star developer and be able to out-code the new kids on the block.

My advice to managers is to consider the value of the experience that the techies bring. With age frequently come wisdom and abilities to follow direction, mentor, and lead. Older workers also tend to be more pragmatic and loyal, and to know the importance of being team players. And ego and arrogance usually fade with age. During my tech days, I hired several programmers who were over 50. They were the steadiest performers and stayed with me through the most difficult times.

Finally, I don’t know of any university, including the ones I teach at, that tells its engineering students what to expect in the long term or how to manage their technical careers. Perhaps it is time to let students know what lies ahead.

Editor’s note: Guest writer Vivek Wadhwa  is an entrepreneur turned academic. He is a Visiting Scholar at the School of Information at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University.


TOPICS: Business/Economy; Crime/Corruption; Extended News; US: California
KEYWORDS: agediscrimination; ageism; computerindustry; cultureofcorruption; discrimination; engineers; h1b1visas; siliconvalley
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1 posted on 09/01/2010 8:33:49 AM PDT by a fool in paradise
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To: a fool in paradise

Wafer fab engineer, uppa 50’s few jobs available for nearly 4 years.

We’re still importing H-1Bs though...


2 posted on 09/01/2010 8:36:24 AM PDT by null and void (We are now in day 585 of our national holiday from reality. - 0bama really isn't one of US.)
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To: a fool in paradise

or stay in cobol.


3 posted on 09/01/2010 8:36:39 AM PDT by stylin19a (Never buy a putter until you first get a chance to throw it)
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To: a fool in paradise

If you’re over 40 don’t both applying at google.


4 posted on 09/01/2010 8:38:00 AM PDT by Drango (NO-vember is payback for April 15th)
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To: a fool in paradise

...plus the young worker won’t complain about having to come in on weekends or the size of his bonus check.


5 posted on 09/01/2010 8:38:46 AM PDT by STONEWALLS
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To: a fool in paradise

News flash - it ain’t just in Silicon Valley. Cash is king, and the ‘more mature’ engineer naturally gets more pay. I just ate my second pay cut in three years. At least I still have a job, unlike many.


6 posted on 09/01/2010 8:39:03 AM PDT by tgusa (Investment plan: blued steel, brass, lead, copper)
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To: a fool in paradise

SillyCon Valley is loaded with libs and they kick people over 45 to the kerb. Google is the worst. I have seen arrogant techies get older and then they get a shock.


7 posted on 09/01/2010 8:39:25 AM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE & TV supports Imam)
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To: a fool in paradise

They like the younger inexperienced engineers because they can work them like slaves!


8 posted on 09/01/2010 8:39:33 AM PDT by downtownconservative (Imam Obama has now noticed he has no clothes. His response? "That infidel Bush stole my clothes".)
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To: a fool in paradise

“Even if it spends a month training the younger worker, the company is still far ahead.”

Yeah. Cuz an education in perl and java scripting can easily be transformed into in depth knowledge of industiral networking or fimrware in 6 months.

No problem... :)


9 posted on 09/01/2010 8:41:09 AM PDT by Pessimist
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To: null and void

Bill Gates needed his lower cost H1B workers. So he could make more money. So he could fund his foundation. So he could lobby the government to tax you more for things like socialized medicine (and outright push for death panels).

I loathe billionaire socialists like Gates and Soros who insist that I’m not paying enough taxes.

They are welcome to their wealth but they slit my throat to get it.


10 posted on 09/01/2010 8:41:09 AM PDT by a fool in paradise (I want IMPROVEMENT, not just CHANGE.)
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To: null and void

I have more problem with H1B discrimination. The Indian developers know they can rarely out-code their US counterpart so they get into management or the technical reviewer team to keep us out.


11 posted on 09/01/2010 8:43:31 AM PDT by GunningForTheBuddha ("There is an 'I' in Marxist")
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To: a fool in paradise

Sounds like the accounting profession. Shoosh, hire a pot full, work them to death and then rinse and replace. Nice, especially when you get to hire imports (see India, China). Would this have anything to do with CA financial problems?


12 posted on 09/01/2010 8:43:43 AM PDT by equalitybeforethelaw
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To: null and void

We’re still importing H-1Bs though...

That’s a travesty . .


13 posted on 09/01/2010 8:44:31 AM PDT by A_Former_Democrat (NO MOS-que AP: It's the "GROUND ZERO MOSQUE")
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To: a fool in paradise

As an “older guy” who was one of those Silicon Valley engineer-manager-executives and took “way out #1” — became entrepreneurial and therefore stayed gainfully employed — let me point out one other thing about aging engineers.

Far too many of them stopped learning, growing, being excited about new technology. Instead, they depend solely on their vast “experience” — and they tend to approach every problem in the same old way, with the same old solutions. They pattern-match each task with what they have done in the past, rather than examining every problem as a new one and selecting the **best** (new or old) technology to solve it.

In other words, they are big, heavy hammers and to them every problem looks like the nails they “used” to pound in with it. So pound they do, oblivious to the fact that THIS newfangled nail has SCREW THREADS on it and a phillips drive slot on top. :-)

This is not only an issue with engineers — it affects professionals of every stripe, from doctors to CPAs to lawyers.


14 posted on 09/01/2010 8:44:33 AM PDT by Nervous Tick (Eat more spinach! Make Green Jobs for America!)
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To: a fool in paradise
In 2006, Zoho’s CEO, Sridhar Vembu, initiated an experiment to hire 17-year-olds directly out of high school. He found that within two years, the work performance of these recruits was indistinguishable from that of their college-educated peers. Some ended up becoming superstar software developers.

Yes, and it is not just tech companies that operate like this. Some of this is due to the "professional" HR people and the exposure to the company for age discrimination lawsuits from older workers. And the higher composite insurance costs that go with an aging workforce.

Judgement and experience have a value to companies that many HR personnel cannot understand. What works, works. I can never remember a HR manager that I met with any operational experience.

15 posted on 09/01/2010 8:45:36 AM PDT by Texas Fossil (Government, even in its best state is but a necessary evil; in its worst state an intolerable one.)
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To: tgusa

Hope & Change.


16 posted on 09/01/2010 8:46:02 AM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE & TV supports Imam)
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To: tgusa

Hope & Change.


17 posted on 09/01/2010 8:46:07 AM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE & TV supports Imam)
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To: a fool in paradise
" Even if it spends a month training the younger worker, the company is still far ahead."

What a load of B.S. I bet some outsourcing H1B pimping company sold them on that fantasy.

18 posted on 09/01/2010 8:46:15 AM PDT by Proud_USA_Republican ("The problem with socialism is that you eventually run out of other people's money.")
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To: a fool in paradise

One person who works on my team is in their mid 60’s, they are one of the best people in my team.


19 posted on 09/01/2010 8:46:56 AM PDT by GraceG
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To: STONEWALLS

You make up all of your posts, or just that one?


20 posted on 09/01/2010 8:47:34 AM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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