Nadella told employees that the company is “nearly doubling the global merit budget” and allocating more money to people early and in the middle of their careers and those in specific geographic areas.

Source: Microsoft CEO Satya Nadella tells employees pay increases coming

For a long time, engineering salaries have peaked around age 40. As subsequent pay increases become less and younger engineers see greater pay increases, this eventually leads to an age-based salary inversion. Older experienced engineers then find themselves paid less than younger engineers.

From a 2018 IEEE study:

The study also took a look at the impact of age on tech salaries, finding that, in the United States, average engineering salary offers hit a peak of $149,000 at age 40, plateaued for a decade, and then started sliding down at age 50.

Race and Age Impact Tech Salaries – IEEE Spectrum

For young people making career choices and future career plans, this should be taken into account – but is typically not. Best career growth occurs early in one’s career, and you need to be moving up and into managerial roles by your 30s. If you do not do this, your career will soon plateau.

Young engineers should, in their 20s, give serious thought to their career growth and trajectory – and take the necessary steps to put themselves where they need to be – or see their careers stagnate or even end. Another option is to pursue government or quasi-government positions (such as a national lab) where it’s okay to still be an engineer as you grow older.

I grew up in Silicon Valley (before it was called that) and had many neighbors who worked in “tech”, which in those days was typically aerospace, nuclear and defense engineering and early semiconductors. As I was growing up, everyone I knew in the field saw their careers come to an end, typically by their 30s. All ended up elsewhere: one became a realtor, one became a consultant, one became my high school math teacher, one joined a family business, another started an auto parts business. And so on.

Note – the above linked article also has a salary break down by race or ethnicity and it indicates hispanic and black workers have lower salaries. This could be because of discrimination, or it could be because of geographical differences. For example, the concentration of Asian workers – who make more than others – may be higher in Silicon Valley which has very high salaries. That, however, also points to unusual employment patterns based perhaps on race.

By EdwardM