Age a Big Factor in Technology Earnings

Research from the University of California at Berkeley shows age is a factor in earnings: As you get older in your technology job, your rate of earning becomes more stagnant. So what's a technologist to do? Climb the ladder or shift career paths as you go along. Programmers take heed.

The older you get in technology, the harder it is to maintain a salary that grows, discovered economists Clair Brown and Dr. Greg Linden of the University of California, Berkeley, who have been studying the subject in research about offshoring and the semiconductor industry since 2006. These academics have repeatedly discovered data that shows salaries for engineers and technology workers peak in their 30s, and become more stagnant in the 40s and 50s, with fewer job opportunities as aging progresses.

Brown and Linden wrote about the bifurcation of age groups in their book "Chips and Change: How Crisis Reshapes the Semiconductor Industry." In a chapter titled "Finding Talent," the professors noted the challenge for older workers who face younger, recently graduated workers who have the latest experience on state-of-the-art technology. Older workers are either moved up the ranks into program management or other management positions, with their experience being valued only for their legacy knowledge. Those workers who do not move into management face tough career positions.

"We found in out fieldwork that experienced engineers were often forced to work on mature technologies with stagnant earnings, rather than being allowed to learn and work on new technologies with rising earnings," wrote Brown and Linden in the book.

According to another academic, Vivek Wadwha, a director of research at the Pratt School of Engineering at Duke University, ageism is a dirty little secret as companies want younger workers with skills and so are more than willing to part with higher paid technology workers who do not climb the corporate ladder based on high performance. Wadwha wrote in an Aug. 28 post:

"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?"

This isn't to say Wadwha necessarily supports these kinds of moves, but he does recognize that when it comes to career advice for technology workers, there is little in the way of sound career planning for the field. Wadwha offers the following advice to combat career stagnation and loss of opportunity:

"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.

"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."

Other findings in the book from Brown and Linden suggest diminishing returns for graduate and post-graduate degrees like Ph.D.s in engineering; bachelor degrees appear to show solid earnings trajectory as you climb the ladder.