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One issue is that in most companies in the US most employees get annual salary increases, 5-6% is a common baseline for people who are doing their jobs well in a company that is successful. Sometimes people get much more. This means that someone who had been getting annual increases for 20 years is paid approximately 4X as much as a new hire. In addition, their annual increases, being a more or less constant rate, are also 4X as much... and if the pattern continues, by the time they've been working 40 years they'll be making 16X as much as a new hire. Are older workers really that much more valuable? And if they are, as I think is often the case, will management see it when looking at their payroll expenses? You might think one solution is too stop giving them raises, or even cut their pay, but there's a strong reluctance to do that, even if the employee is willing. Add to all of this a culture of youth, which exists in tech, and you can see a potential problem. Note, however, that it's not universal. I'm 45 and have no concern about my employability. I work with many people who are much older than me, up into their late 60s, even. In my experience, good software engineers can find employment regardless of age, though it does get harder as your income rises. At some point people may need to either move into management or switch to freelancing, trading steady employment for a much higher wage, working for people who judge your cost against what you achieve for them. Note that I've dramatically oversimplified the annual salary increase situation, but it's a useful approximation. |
In contrast, you often only get a "real" raise when you change positions, or if your employer genuinely fears your chances in the current job market - for the moment. But then the problem with that is when the job market tanks, management will look to adjust the salaries of those they had to pay a premium to keep, usually by making it unbearable for them to stay.
Not every place is this volatile, but some are.