Due to long term conditions in the workforce, you just are never going to get a raise. After reading this you’ll understand why and what choices you have if you want to make substantially more money.
Why No Raises:
Most Americans improve their economic status based on their salary at work, not through their investments or any social programs. Going back to the 1970’s wages, adjusted for inflation, for the typical worker have been flat as a pancake, rising only .2% a year. That’s not 2% but .2%, as in an increase of $100 a year for a $50,000 salary!
Have all worker’s been effected? Absolutely not. Since the late 1970’s large salary increases have been distributed to the workers at the top of the salary scale, whereas the bottom workers have seen a loss or at least stagnation. Better educated workers have seen their rate of increase improve over lesser educated workers.
The economy has grown substantially, the stock market has skyrocketed. The Dow Jones Industrial Average was $4,931 in January 1970, in 2018 it hit $26,000! Your retirement plan has benefited just not you real earnings.
So why haven’t real wages increased over the last several decades? There are a whole list of reasons.
- Wages typically increase as overall worker productivity also increases. Except for the time period around 200 – 2004, real worker productivity has been stagnate. All the computers and technology is already in place, workers are no longer more productive.
- Up until just recently minimum wages have been flat for many, many years. For example the current Federal minimum wage of $7.25 has been in place since 2009! State minimum wages haven’t done much better.
- Our good old fashion manufacturing jobs are a small percentage of the overall workforce. These jobs were exported to other countries. Unions no longer carry the weight of prior years. Today’s heavy industry is being dominated my robots and technology. We gave up manufacturing for a services economy.
- People no longer are mobile, they won’t take a risk of leaving their current job for a new job, even for a raise. In addition, people no longer relocate geographically as a means to earn more money.
- The 2007 recession forced management to reduce expenses and they haven’t lost that mindset 10 years later. With little or no real inflation, there is no reason to increase wages.
How to Get a Higher Salary:
It’s pretty simple, to get a higher wage, become more valuable to someone who is interested in profits. Businesses pay people more money when they can directly align the employee’s performance to an improvement in the bottom line. If you work for the government, school system or a not for profit, this just won’t work.
- Learn a new skill that is worth more than your current skill, even in your existing business. Your company pays more as you advance up the “value chain”.
- Become the strongest supporter of the company, the best employee, the hardest worker. You get the idea, a business pays more for these people.
- Go into sales or become billable. Sales and billable people can get paid based on their contribution to profits. Sales has always carried a negative connotation, however professional sales is a very important and rewarding experience.
- Take a job that includes travel if you can. These employees are more valuable and get paid more.
- Work for companies that are growth oriented or have high profit margins. Technology and healthcare come to mind. Also profitable businesses like mid-large size law firms can afford to pay well. Low margin and small businesses just might not be able to pay more.
- Become a manager and keep moving up in your business or another one. If you have leadership skills use them at work. Most businesses thrive on leadership skills.
- Always be competitive, if you don’t tell your boss or company how valuable you are and what you contribute no one else will tell them either.
- If none of these appeal to you consider starting your own business, maybe part-time at first. Many small businesses are what I call “job replacement” businesses.
If none of the above work for you, just be happy to have a job and don’t expect a raise anytime soon!