I noted time and time again in this blog that the "I'll just work until I'm 70!" crowd is in for a rude awakening. In most companies, you get tossed out around age 55 or so. By then, your skill set is 35 years old and outdated. Your salary is twice that of a new hire. And your health insurance premiums are five times that of a new hire - if the new hire is even offered health insurance at all.
To the accounting department, you are just an entry on a spreadsheet - and expensive entry. And new management knows how to cut costs - by cutting you.
That's why I say that a job is just a means to an end - personal wealth and independence. Sadly, as young people, we are trained to think of our salary not as something to save, but a number that qualifies us to borrow money. "I got a raise! Now I can get that loan to buy a new Acura!" - we all fell for that gag at one time or another in our lives.
And in each era, there are "hot jobs" where you can "name your own salary" (you really can't, but they make it sound that way). When I was in my 20's it was Engineering. And I got an Engineering degree, but since my background was in heavy industry (GM, Carrier) the people wanting to hire me were interested in someone who could design simple control systems for air conditioners. The "hot jobs" in silicon valley (where designing silicon was the big thing) were all people who went to Cal Tech or the like, and had a background in semiconductor design.
So I went to the Patent Office. A family friend had his own Patent law firm and just signed a 5-year lease on two whole floors of an office building on Pennsylvania Avenue. "Bobby," he said, "You have to get in on this racket!" So I did. But in two years, his main client - a chemical company - was bought out by a competitor and they had their own preferred firm for Patent work. He went from high-flying lawyer to nearly broke overnight. He told me, "Know anyone who wants to sublet two floors on Pennsylvania Avenue?" It didn't help that the commercial real estate market in DC collapsed around then.
By then, silicon valley had turned from silicon to software. Semiconductor design became a commodity and no one wanted to pay much for "chips" or for engineers who designed them. There was a mass-exodus from Silicon Valley of silicon firms - to Boulder, Austin, and other points on the compass. They could pay engineers less, as the cost of living was less - at the time, anyway.
Meanwhile, "coding" became the "hot job" to have and you could "name your own salary" (not really) as most people my age were encouraged to get into "hard" Engineering - transistors and such - and software was not even recognized as "science" by either the University or the Patent Office.
But as Engineers will tell you, nature abhors a vacuum. And when hardware Engineering was hot, people got into Engineering. When software became hot, people got into software. Eventually, there is equilibrium in the market, as people flock to majors where they feel they can get "rich" or at least well-off.
The same was true for the Patent business. After Polaroid v. Kodak, and the creation of the Federal Circuit court to hear all Patent appeals, there was a land-office business to get Patents. And my family friend was right - it was a "racket" at least for a while. But eventually, word got around and more and more people went to law school and became Patent Attorneys or Patent Agents, and the bloom was off the rose. It didn't help any that the courts came down with decisions that tamped down the potential damages and thus the value of Patents themselves. In the nearly 30 years I practiced, prices for Patent Applications remained stagnant, and in some cases, went down.
Today, it is the software or "coding" business that is slowing down. The big "FANG" companies (or is it now "MANA"?) have laid off hundreds of thousands of software engineers, for a number of reasons. First, I believe, is that many of these websites (and that is all they are, websites) have matured, and the need for new coding has diminished. You can hire a few people to maintain the site, put out fires, and incrementally improve it. But you don't need to write thousands of lines of code every month for a mature site.
Second, I believe, a lot of pie-in-the-sky ideas have failed to pan out (Hello, Metaverse?). So they are scaling back, closing down some sites and features, and laying off software "engineers" as a result.
Third - and this gets into conspiracy theory territory - the FANG companies and their hangers-on are sick and tired of fat, slovenly, cheetos-eating "tech" guys "naming their own salary" and one way to put a damper on this is to do massive layoffs and then selectively rehire only the most desperate of laid-off employees.
This is a page right out of those executive handbooks. When you are made CEO, you fire everyone and make them "reapply" for their old job - having to justify why they are worth anything at all. In many cases, this strategy backfires and the best employees get fed up and go to work for a competitor. In other cases, it allows you to cut out a lot of dead wood and slim down operations. Wall Street rewards you with a share price increase, which, with your stock options, puts millions in your pocket.
Fourth, well, we covered this before - young kids are exhorted to major in STEM studies and they all go to college to "learn to code" and now the market is flooded with new coders. Nature abhors a vacuum.
We saw the same thing in the law business. In my second year of law school, the smarter students who were on Law Review and the top 5% of the class, all had summer "law clerk" jobs at white shoe Manhattan law firms, where they did little actual work, but the senior partner would give them tickets to the Yankees game - at the firm's private box, right behind home plate. They were assured six-figure salaries upon graduation, which, back in 1992 was a lot of money.
And then, not. A host of graduates back in 1992 found their offers rescinded as the law business contracted and business dried up. It was sad to see, but then again, those high-flyers were always rubbing our noses in how special they were, until they weren't.
In 2008, the process repeated, only worse. A "lost generation" of lawyers found no job offers anywhere, as the market was now flooded with young graduates, all of whom got into the law business after watching "L.A. Law" or "Ally McBeal" and thought that being a lawyer meant long expense-account lunches, wild sex, and maybe a few hours of actual legal work, mostly mouthing off to a judge and thus winning your case.
The law business recovered within a few years, but the law firms were by then hiring new graduates, and the "lost generation" of 2008 grads found themselves on the outside looking in. The same might happen to young software engineers who are struggling to find jobs these days.
A recent article online discusses this scenario. Within a few years, we went from "name your own salary" to "stand in line and fill out these forms and be prepared for five interviews, if we consider you at all!" Times change very quickly and in the time it takes to graduate from college, well, the job market you were aiming for may have evaporated.
Even if you get that "hot job" out of college, the legions of followers graduating behind you will mean that the market may become saturated - and some young punk with a fresh degree and new ideas may be gunning for your job. Welcome to Capitalism!
Does this mean life sucks, so you might as well not bother trying? Hell, no. What it means is that if you get that "hot job" the smart thing to do is to bank as much of that salary as you can and not be tempted to spend (and borrow) more and more. Most people do the latter - buying status cars and status houses to show others that they "made it" and then stress themselves out with all that debt and monthly payments. The hot job better remain hot, or they are screwed.
I noticed, when I worked at law firms, that there were always quiet associates and partners who drove pretty plain cars, lived in nice but not austenatious, houses, and even brown-bagged their lunch to work. They were making good money and could "afford" to spend more, but chose not to. If they got laid off later on in life (which I saw happen to more than one) they were still financially secure.
On the other hand, the young associate who leased a brand-new luxury car and bought a "look at me!" mini-mansion, lived in fear of losing his job. Who wants to live that way?
I found out later in life that the biggest luxury you could own was .yourself. To have enough money in the bank to live without working - if you chose to do so. It didn't take overnight, and it meant making sacrifices along the way, but the end result was worth more than 1,000 fancy cars or look-at-me houses.
And that, in short, was why I started this blog.
