The general assumption is that the old are paid more in spite of, rather than because of, their extra productivity. Earlier this year, Sun Life of Canada, an insurance company, announced that it was offering redundancy to all its British employees aged 50 or over to bring in new blood . More than perhaps anywhere else, pay in Japan is linked to seniority. Perhaps the main reason for replacing older workers is that it makes it easier to defrost the corporate culture. Older workers are less willing to try a new way of thinking.
Younger workers are cheaper and more flexible.
Some German firms are hampered from getting rid of older workers as quickly as they would like. At SGL Carbon, a graphite producer, the average age of workers has been going up not down. The reason, says the company s Ivo Lingnau, is not that SGL values older workers more. Clearly, when older people do heavy physical work, their age may affect their productivity. But other skills may increase with age, including many that are crucial for good management, such as an ability to handle people diplomatically, to run a meeting or to spot a problem before it blows up.