Why the early mandatory retirement?

“By age fifty or fifty-five, the employee’s salary is often much higher than his productivity [due to seniority-based pay]. Most companies want to replace overcompensated older workers with low-cost younger personnel.

For the worker, what typically follows ‘lifetime’ employment is retirement employment, at lower wages and without security. In 1988 about 67 percent of Japanese men in their early sixties held jobs, as did 55 percent of those in their late sixties. This was more than double the rate of postretirement work in the United States.”

About Face by Clayton Naff pg 267

Another factor is that there is nothing to stop most companies imposing early retirement because most employees get a one off payment rather than a regular pension or with only a small regular pension.


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