Wednesday, April 04, 2007

Age Discrimination in Employment?

This NYT article talks about another vanishing component of the private-sector "social safety net"--a reliable, steady procession of annual raises. It cites the recent Circuit City layoff of experienced, higher-wage workers, for the sole reason that they are higher wage workers. Not a RIF, not clearing the deadwood--they were going to be replaced, but with new hires who would start at the bottom of the pay scale.

It has always been obvious to me that there is no such thing as widespread employment age-discrimination, per se. The problem, so to speak, is the strong tendency for employees to get annual raises more or less automatically, without a clear link to their productivity. Like interest, this effect compounds quite significantly over time, to the point where a cold, analytical eye scanning a list of employees sorted by salary readily picks out some expensive outliers. They just happen to be older, because getting older is how you get more time-served (aka, experience).

None of this is to say that the pill is any less bitter for the experienced employee who gets laid off, with little prospect of being able to match their former salary. It is a painful break with expectations, with a perceived social contract. But it is not age discrimination.

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