Because experience still beats everything else.
Yes, in the startup, young ecosystem that we're living in right now, things are taking massive shifts. But still, the experience remains one of the most important factors for employers when hiring new employees.
So, this is usually the biggest reason why older people earn far more than young people.
Aside from this, there are many dynamics to the answer to your question.
Here are some reasons…
NOT ALL JOBS REQUIRE TECH SKILL
Yes, tech is making a massive impact across different sectors. However, it's far from taking over the world. The majority of the jobs in the market is still has nothing to do with tech. So, per your question, it doesn’t matter if the young people have "much better technology skills".
(In fact, in the USA, the tech sector has an estimated direct economic impact of $1.8 trillion, which is just 10 percent of the country's total economy.)
In the same context, a lot of jobs that do include fiddling with technology, it doesn’t require you to be a genius. Basic training can do the trick. So, older people don't find it much troublesome to bag such jobs.
OLDER PEOPLE HAVE TIME LEVERAGE IN THEIR COMPANIES
Imagine an older person working in an organization for 10 or 20 years. And a young person, with exceptional tech skill, has joined the same workforce.
Is it difficult to guess who will get paid more?
The older person has been here for so long. She/he has won the trust of the management. She/he has likely played a significant role in the company's growth. She/he will definitely get paid more because of these attributes no matter what kind of skill the younger employees bring to the table.
OLDER PEOPLE HOLD THE TOP ROLES
In the corporate world, meritocracy isn’t something that many people hold high in esteem.
No matter how unqualified the top management of old dudes is, there exists a hierarchy that one must follow. If a young person has joined the company. She/he has to follow the process to get to the top of the ladder.
So, the system is simple: the more time you spend in the organization, the more promotions you will get. The more promotions, the bigger the positions you will hold. And big positions usually come with a big pay package.
So, older people spend more time in their respective organizations, which enable them with key positions. And these positions come with higher pay.
If you see the top management of the companies, the majority of it would include the older people. They are there not because they have much better technology skills but because they have spent more time in that organization.
ORGANIZATIONS NEED LEADERS NOT GEEKS
This is a major factor.
The corporate world is struggling with a shortage of leaders. We already have too much of college graduates (and dropouts) who romanticize entrepreneurship. They are skilled. They start a company. But the company fails. Because tech skill isn’t sufficient to take the company to success.
Companies need leaders to grow and sustain. And while there do exist courses that promise to teach you to be a leader, leadership cannot be learned in just a few months. It's a skill that gets established and polished over a period through continuous work, wins, losses, networking. This is what that gives an edge to the older people. They have seen the world more. They likely know how to deal with stress and emergencies better.
For instance, do you think Jeff Bezos has as good tech skill as his developers? NO!! And yet his developers do not even get paid 0.001 percent of his annual income.
Technology skill is important.
But experience beats it all.
Developers help the company come up with products. It is the leadership team of the company, who might not be as tech proficient, who help grow the company through effective strategy.
These are some of the reasons why older people who seem bad with technology earn far more than young people with much better technology skills.
Meanwhile, here are some funny memes on this…