Age Discrimination Hits Younger Workers

DN Staff

September 5, 2005

7 Min Read
Age Discrimination Hits Younger Workers

Layoff after layoff, John Draut held on to his hardware engineering job at Nortel Networks until 2003. Then the 52-year-old joined the ranks of unemployed EEs in Silicon Valley.

"It really comes down to economics. They can hire three kids right out of school for the price of me," says Draut, who's now 55. He sees that as a "false economy," the same way he describes the shipping of technical jobs to India or other low-wage countries.

Statistics support that contention, though this year's Design News salary survey shows that on average, it takes about two, not three, salaries for young engineers to match those of older workers. The mean wage for those with less than two years experience is $41,181, roughly half the $83,325 of those with 11 to 15 years on the job.

Though high salaries are one reason companies release older workers, that's not always seen by courts as age discrimination. "The Supreme Court has ruled that firing someone based on expense is not necessarily age discrimination," says Paul Mollica, a Chicago attorney who specializes in discrimination cases.

Whether it's for salary costs or because they feel older workers aren't as aggressive as new graduates, many observers don't think cost-conscious companies are going to change their ways. Anecdotal evidence supports the theory that older engineers seem to get hit by layoffs more often than younger workers. "Going to the unemployment office, most of the people you see are over 40," Draut says.

In some engineering fields, the 40-year level is becoming almost as much a turning point for some engineers as it is for professional athletes. Engineering expertise doesn't diminish with age as do physical skills, but the perception that those skills don't increase enough to justify higher salaries is prompting many in the field to see age discrimination as a major concern for tech workers.

"There is a form of ageism going on," says NY Professor Ron Hira.

"We keep hearing from engineers who say there is a form of ageism going on. It seems that engineers are more vulnerable than other professions. In medicine, law and accounting, age is usually considered an asset," says Ron Hira, Professor of Public Policy at the Rochester Institute of Technology in NY.

In some fields, it seems fewer workers are even getting to 40. "In the software area, it certainly happens at 35 and often lower," says Norm Matloff, a computer science professor at the University of California at Davis who's well-known for his writings on engineering careers.

He doesn't see any signs of hope arising from the resurgent economy. "It's getting worse," Matloff says of age discrimination.

In the spring, a Supreme Court decision that loosened the guidelines for age discrimination suits was widely heralded by advocates for workers' rights. But some say that the so-called disparate impact discrimination ruling won't make much difference for engineers.

"It's no longer necessary to find a smoking gun or show that management was gunning for older workers, just that they were impacted more than younger workers. I'm not sure engineers will benefit much from that, though it certainly won't hurt," Mollica says.

He notes that most companies now link severance pay to an agreement on lawsuits. Draut found that out. "When I was laid off at Nortel, a big part of a seven-page contract explained that I agreed not to file a labor dispute regarding age discrimination as part of getting severance pay."

Alternative path: consulting

While older engineers feel the deck is stacked against them in many fields, there's one major exception: consulting. When companies have to call in outside help, they view older engineers in a different light. "I've never seen age discrimination in consulting. Having white hair or a lack of hair adds to your credibility," says Bob Gauger, an 82-year-old consultant who directs the IEEE-USA's biannual consultants survey.

Lawyers and other non-technical people seem to link age and experience. "We've got a consultant who's 84, very sharp with a long list of accomplishments. He gets a lot of jobs as an expert witness," says Kevin Kennedy, president of Kevin Kennedy and Associates Inc. of Indianapolis, IN.

That's something Draut figured out quickly when necessity forced him to become a consultant. "At a given hourly rate, the guy with the most experience wins. If you're a contractor, they like age and experience," he says.

Those hourly rates can be high. A recently-released IEEE-USA survey pegged the hourly rate at $110 per hour. Only 15 percent of the respondents charged $75 or less, and about the same percent charged $175 or more per hour. The median income is $100,000.

"A rule of thumb is that you've got to charge two or three times the hourly wage because you've got to cover a lot of expenses," Gauger says.

Consultants do tend to be more senior engineers, with 72 percent having 20 or more years experience as an engineer, according to the IEEE-USA. "Consulting is a tremendous way to top off your career," Gauger says.

While consultants hourly earnings are higher than most average engineering wages, not all of them feel the tradeoff is worth it. "Ideally, I'd like a full-time job. My family would feel more secure having benefits, especially insurance," Draut says.

Along with the paycheck, another benefit of consulting is that it helps on the lifelong learning front. That's particularly true in electronics, where the pace of change can make the skills of unemployed workers obsolete. "It's hard to keep pace with technology. If you're out of work any period of time, your skills can start to get rusty," Hira says.

As outsourcing of engineering becomes more common, there are a growing number of full-time consulting jobs at design houses. Many of these contract engineering companies provide a steady paycheck for engineers while giving them the variety that comes with consulting.

Age is also valued in this segment of consulting. "Twenty to 25 years experience is usually the minimum we hire. Though I don't care how old anyone is, so long as they're the best in their field," Kennedy says.

His company focuses not on design but on forensic engineering, failure analysis, and other fields. Consultants are often used more there than in other fields because they're not an ongoing part of a company's efforts, among other reasons.

One common link is that these consultants are brought in after problems arise. "People only call us when they want a rapid response," Kennedy says. But a difference is that, unlike many consultants in design, his specialized personnel rarely work in a limited geographic area. "They call us when the local consultants can't do the job," Kennedy says.

Like many outside engineering firms, he employs a salaried staff as well as a number of independents. "The independent consultants are people who want a bit more freedom," he explains.

Average Starting Salaries by Major

Engineering services

$47,161

Computer science

$50,820

Info sciences & systems

$44,775

Marketing

$37,496

Psychology

$29,861

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