Saturday, April 11, 2009

(W)age discrimination

There's been a lot of talk lately about age discrimination, especially in technical fields. It's been occurring to many of us that our experience and wisdom is being ignored in favor of the perceived advantages of youth, their "fresh outlook" and their "eagerness." For those of us in the knowledge fields who don't think enthusiasm trumps knowledge, that kind of statement is profoundly ignorant and insulting. While some people over 40 do become ossified in their thinking, stuck in a morass of 20-year-old knowledge, most I have known retain their interest and aptitude for solving problems by whatever means necessary. They are adept at learning new things, and the base of knowledge they already have makes that learning far easier than for someone, no matter how great their enthusiasm, who does not have that base.

None of what I've written so far is anything new, and other observers of this phenomenon have hit upon the idea of cost. Why pay an older person $80K, when you can get two young people for the same amount of money who will work incredible hours (no families yet) and bring cutting-edge ideas from their education?

That the older person may have the experience to know what does and doesn't work, allowing him or her to cut through the noise and solve the problem in less than half the time, doesn't occur to those who prefer to look, not at efficiency, but at cost per employee.

But there's another factor, and, that is, older people have been beaten down by the job market. Many of them would be perfectly happy to get to do what they want and love, even if the pay were considerably less than they received during the good times. Yet many still languish, working, if at all, in jobs that offer less challenge than they can handle, or worse working conditions than would be ideal. So why are they not snapped up?

[Note: I am not unaware of the argument that says employers prefer younger people because they have longer potential tenure. I just think it's wrong. I know of no statistics to back me up, but I'm guessing that it's at least as likely for a 55-year-old to still be with a company after 10 years as it is for a 25-year-old.]

It's easy to look at age discrimination as the answer, and de facto that's what we have, but I think the mechanism is a bit different from, "we don't like having old people around." Here's my analogy.

Let's say you engaged in an auction, but the rules were different. You would have to pay something every time you made a bid. Of course, this would change your behavior, perhaps to the point where the auction couldn't take place at all. If the payment was at all significant, you wouldn't make any trial bids early in the process, you'd wait until you were pretty much sure of winning...which you would never be.

This is analogous to what happens in the hiring process. If a company takes a chance and hires the older person for $40K, there is the real possibility that another company might come along two months later and decide to pay that person something closer to their previous salary. Then the company is out time and money, plus having their technology exposed to someone who's gone. It's a lot easier just to hire someone who's happy to get the $40K to begin with.

In this way we see the exclusion of people who have ever made more money than the current prevailing wage, creating a class of formerly successful people who now have far less chance of being employed. As a result, there is a tendency on the part of these people to downplay their experience (once again, I have no proof that this is happening, the "puffing down" of resumes, but I'd be very surprised if it isn't).

Economics doesn't do a good job of capturing this, given its propensity to believe that people move effortlessly up and down the wage scale. But this is a real problem, in that companies are deprived of utilizing the talents of the experienced, and the employees themselves who are prevented from working in their field.

Of course, companies could prevent this problem through the well-understood mechanism of contract law, but they really don't want to limit themselves in this way, no matter what the gains might be. It's hard to see the current model as the best way forward.


Anonymous said...

In reality few things seem to slow my earning juggernaut. And few companies I've found seem dumb enough to fall into a very basic trap of hiring inexperience and presumably overpaying. Nope, they hire experience and they pay for it. That's me.

Perhaps salary is your real target. I'm not salaried. Cutting edge ideas from college? I'm learning cutting edge stuff now, while I bask in the sun in Puerto Vallarta, soaking up some good old arbitrage / cost differentials.

I pass on 90% of the jobs and that figure remains consistent. But you are getting at the point when you talk about doing what you love. I have to find what I'd do for free, but I typically won't do it for free. Working condition breakdown? No way, Jose.

As for game theory in salaries, that applies to minimum wage moreso than to my wage ~$50/hr. And I keep my committments, which is clear in any study of my work history.

Ok, here's an anecdote you might like: The last intereview I had, the guy was much older than me. Could have been a grandfather. He expressed that he was jealous of my experience. Jealous! He then asked me some trivia junk. I didn't get the job. But would you accuse him of compelling me to dumb stuff down? I've never dumbed down and never will. I feel bad for you in older age, when presumably all this madness will come home to roost. You don't describe any commerce I have experienced. I'm not saying ageism is a myth! I'm just saying none of it manifests in the ways you've described here.

- mcfnord

Androcass said...

Well, not to you, apparently, and I'm sure not to a whole bunch of other people. But it's a big leap from that to "none of it manifests in the ways you've described here."

I'm not claiming universality for what I'm contending, just that it happens, and that it is a loss for everyone. I'm honestly pleased to know that your experience is deemed useful by companies, and that you're being paid commensurately.

However, your life is not everyone's life, and I'm not just making stuff up based on some theory of the world; my writing is coming from experience (and not simply my own), and is thus making as legitimate a point as is yours.

Anonymous said...

The reader decides!

Which is grand, really. I don't understand how I transcend so much of the theories you and Carrie proffer about my industry. Our industry. I'm convinced I'm simply magical, to be successful in the face of dire fates. It's MAGIC. I've worked with so many older people, too, much other than myself, in whole teams and whole companies. They, too, must levitate by magic against all odds.


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