Magazine Summer 2019 Issue Frontiers Research Highlight

The Plight of the Graying Tech Worker

If you’re in tech and over 40, your experience is probably underappreciated. A global talent pool complicates matters.

William R. Kerr Reading Time: 6 min 

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High-skilled immigration is dramatically transforming the tech sector in the United States.1 In 1975 immigrants accounted for one in 12 inventors in America. Today it’s one in 3.5. This surge is due to immigrant concentration in science and engineering fields, and factors that make the United States attractive, such as access to the latest technologies and high pay levels. The impact has been most evident in advanced technology sectors in areas such as Boston and Silicon Valley, but nontech companies including JPMorgan Chase, KPMG, and Walmart are also pursuing more global talent.2 Studies tout the benefits that skilled immigrants bring to the workforce, including their roles in facilitating global teams and contributions as taxpayers.3

But not everyone is happy with the current system, most notably older tech workers. In an effort to secure work in the booming Silicon Valley economy, for example, older workers have been scrambling to learn new coding skills and making other changes (including updating their wardrobes and even undergoing plastic surgery) in order to appear more youthful.4

They’re not overreacting. My analysis of employee-level U.S. Census Bureau data and qualitative interviews show that U.S. tech workers older than age 40 have good reasons to be concerned about how globalization affects their career longevity. In addition to competing with greater numbers of skilled foreign workers, older tech workers are now also more likely than younger workers to lose their jobs when technical work moves overseas.5

All that said, it would be a mistake to rein in U.S. immigration policy.6 Here’s why.

The largest and most prominent visa category for employment-based immigration to the United States is what’s known as the H-1B visa. Some 90% of H-1B visa recipients are individuals younger than age 40.7 Typically, economists analyze the effects of immigration through an apples-to-apples comparison of immigrants and nonimmigrants in the same general age and education bracket who are looking for employment. However, peer displacement doesn’t appear in that data set because the salary differences between workers with H-1B visas and domestic employees of similar ages and skills are minimal (in part due to a law requiring companies to pay an H-1B worker the “prevailing wage” for the position).

Topics

Frontiers

An MIT SMR initiative exploring how technology is reshaping the practice of management.
More in this series

About the Author

William R. Kerr (@william_r_kerr) is the D’Arbeloff Professor of Business Administration at Harvard Business School and codirector of Harvard’s Managing the Future of Work project. He is the author of The Gift of Global Talent: How Migration Shapes Business, Economy & Society.

References

1. W.R. Kerr, The Gift of Global Talent: How Migration Shapes Business, Economy & Society (Stanford, CA: Stanford University Press, 2019).

2. W.R. Kerr, “Navigating Talent Hot Spots,” Harvard Business Review 96, no. 5 (September-October 2018): 80-86.

3. G. Peri and C. Sparber, “Highly Educated Immigrants and Native Occupational Choice,” Industrial Relations 50, no. 3 (July 2011): 385-411; S.P. Kerr and W.R. Kerr, “Global Collaborative Patents,” The Economic Journal 128, no. 612 (July 2018): F235-F272; and N. Smith, “America’s Need for Skilled Immigrants Isn’t Going Away,” Bloomberg, Oct. 24, 2018.

4. C. Hymowitz and R. Burnson, “It’s Tough Being Over 40 in Silicon Valley,” Bloomberg, Sept. 8, 2016.

5. M. Rogoway, “Intel Layoffs Skew Older, Spotlighting Plight of Aging Workers,” Oregon Live, June 6, 2016.

6. N. Matloff, “On the Need for Reform of the H-1B Nonimmigrant Work Visa in Computer-Related Occupations,” University of Michigan Journal of Law Reform 36, no. 4 (fall 2003): 815-914.

7. U.S. Citizenship and Immigration Services, “Characteristics of H-1B Specialty Occupation Workers,” April 9, 2018.

8. S.P. Kerr, W.R. Kerr, and W.F. Lincoln, “Skilled Immigration and the Employment Structures of U.S. Firms,” Journal of Labor Economics 33, no. S1, pt. 2 (July 2015): S147-S186.

9. Y. Zhou, “New Data on H-1B Visas Prove That IT Outsourcers Hire a Lot but Pay Very Little,” Quartz India, Aug. 1, 2017.

10. “Bill Gates: U.S. Senate Committee Hearing on Strengthening American Competitiveness,” Microsoft, March 7, 2007.

11. Kerr, et al., “Skilled Immigration.”

12. Kerr, The Gift of Global Talent.

13. In 2018, California Governor Jerry Brown announced budget cuts to the state’s community college system of $102 million. See G. Chen, “California Community College System Slammed With Budget Cuts,” Community College Review, Sept. 24, 2018.

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Comments (3)
Ravi Ramakrishnan
There are far reaching Economic, Financial, Psychological and Social implications  and "unintended consequences" for not hiring older workers to the society, the individuals and their families.
Most graying workers are both physically and mentally active and have more wisdom than younger workers which is essential for long term strategic thinking and decision making. Even for coding related jobs, graying workers, having seen a plethora of technologies, algorithms, and industries can actually do better than a younger worker. In fact, most Enterprise architecture, software architecture jobs require candidates to have at least 15 years of experience in diverse technologies as well as business knowledge. How many workers under 40 years of age have 15 years of experience?

1. Financial--Most people who do not earn have difficulty paying their bills. Given the fact that the average life expectancy is around 80 years, people over 45 years of age around 27%. How is the Government and the society planning to these 82 million people?
2. Individual -- When people cannot find suitable jobs, their skill sets are wasted, and not having a productive life tend to create psychological issues for the individual which seeps into their families and into the society as well. Crimes, drug and alcohol abuse will increase.
3. Society -- Since Governments and non profits have to support these greying workers,  they need to tax more, raise more funds etc. In short, 75% the people will have to support the rest of the 25% graying workers, in the form of food stamps, housing and other subsidies, lower taxes etc.

What can we do?
The aforementioned issues can be mitigated with appropriate labor policies and enforcing them.
For example, all business employing a certain number of workers can be required to submit reports publicly on a quarterly basis the demography by age of their work force. I challenge Amazon's Mr. Jeff Bezos and especially Mr. Andy Jassy (AWS CEO) and all other businesses which claim to be socially responsible businesses to make publicly available such reports for all the Americans to see voluntarily!

Business can themselves act proactively to (re)train their workers so that they can contribute to the bottom line or reassign them to jobs where their experience and wisdom can be useful to the business.
It is high time that we reconsidered and scrutinized “The Social Responsibility of Business is to Increase its Profits”. Instead we should promote “The Social Responsibility of Business is to Increase society’s “ Profits”. I put double quotes on the profits to emphasize that it does not carry the traditional meaning of financial profits but the wellness of the society as a whole – as the time evolves, so should the wellness of the society.
Amy Innh
"One idea is to require companies that want to employ workers on H-1B visas to contribute to a special fund earmarked for retraining displaced workers"
A remarkable comment given just how many US workers have trained their foreign replacements before being laid off.  CBS was reporting on this as far back as 1995 (Dan Rather), and so I have to wonder just how out of date or industry illiterate this article's author is?  Possibly it's is a regional blindness, as Boston vicinity news papers public layoffs (TJX, for example) with no mention whatsoever that the workers were supplanted by foreign cheaper workers.

"and supporting community colleges to meet an important societal need (tapping a percentage of their stock returns or profits above a certain level)."
It's not just older workers.  Rutgers says 50% of US new STEM grads can't find a job in STEM, and 75% of US STEM professionals.  It's not just native workers, Immigration Policy Institute, a proponent of migration, says US has 2 million "highly skilled" in low skilled work or are unemployed.  Soooo, these people should then go to a community college for ...?

This article lacks both basic knowledge and basic research on the subject matter.
Shelly Moon
This is happening to my husband as we speak. He put in 20 years in IT at a major semiconductor company, learning new skills and growing in rank. His last position there was as an IT Support Manager and he was exceptionally good at his job. His department had the highest resolution rate of any of the support teams worldwide. They sent him overseas to train his replacements and we knew the end was near. He is now 56 years old and despite his depth of knowledge and a brand-new degree in IT security, the best work he's been able to find is contracting as a PC tech. He loves tech and gets really excited about every new thing that comes out so he has the excitement of a younger person with the skills and maturity that come from experience. Yet, there is no way to hide his age or his experience level from potential employers. He makes it clear that salary is not his main driver, but still he continues to be passed over and It is very frustrating for him. The 65% pay cut and loss of corporate benefits are awful, but so is the loss of professional momentum and camaraderie of being part of a team. Sadly, his story is not unique. I wish I knew the answer.