No Excuse for the Underpaid

Welcome to The Shift, a weekly newsletter where I provide thought-provoking ideas to help you think differently about your career and money.

Last Week + This Week = It’s All Connected

I’ll make this quick.

Last week we talked about about how middle-income earners have been left behind when it comes to getting raises. Read here if you missed it. In that post I mentioned job hoping as the best tool to get a bump in salary. I’ll prove it this week. Maybe I’ll even convince you to start your job search!

Staying Miserable

There are lots of reasons people stay at jobs that make them miserable.

Some reasons are understandable, some not so much.

I actually think a little misery is normal. But when misery at work is caused by being underpaid or feeling undervalued, then we have a problem. That creates a different type of misery. One that I view as unacceptable. Mostly because it can turn toxic.

Don’t be miserable because of pay.

Be Honest - Are You Underpaid?

Of course we all want to be paid more! It must be human nature. Ha.

It’s one thing to be p*ssed you haven’t gotten a raise despite living with inflation that reached highs not seen since most of us were born.

I totally think employers are way behind on cost of living pay increases. Unfortunately, that argument won’t fly for us experienced employees.

There just simply isn’t enough leverage. I hate it as much as you do.

It’s another thing to have evidence of your worth tied to company sales, profitability, your manager’s productivity (I believe this is an underutilized stat – making your boss’s life easier is extremely valuable), your ability to exceed the job duties you’ve been given, or tie performance to another stat your business lead likes to tout.

If you’ve talked through your achievements in this way with your boss:

• on more than one occasion,

• over a year or two,

• and you still haven’t been given an acceptable raise…

Then it’s time to bounce. You’ve done all you can do.

The grass might not be greener on the other side, but it might be worth more.

This is Not A Surprise

The best raises come when you switch jobs. It’s been the case for me.

Well, minus that time I completely switched industries – my job responsibilities were more journalist-like than investment research like when I initially started working for Jim Cramer at TheStreet, so I took a pay cut to try something new. Anyway, I digress.

Job hopping is often your best bet for increasing your income. The evidence is in the chart below.

This shouldn’t be a surprise. We’ve seen this movie before. What’s different now is that the average wage increase for switchers is more than three times higher than it was pre-2019.

Who knows if it will stay that way. Even if the gap continues to narrow, just remember there has almost always been a gap.

The only time the job stayer got a better raise was when a deep recession hit (see 2009-2011). I’d argue the data is probably a little wonky – people changing jobs during that period were probably the same ones that got laid off.

Loyalty Won’t Save You From Layoffs

For those of you that are going to tell me a recession is coming and you need to just suck it up and stay where you are…

First of all, you just might be one of the people that missed out on the job opportunities of the last year and a half for the same reason!

Second, there seems to be a 180 in thinking with regards to layoffs nowadays. Last-in, first-out, (LIFO) where employees with shorter tenure are canned first, is no longer the go to method¹ . Many companies that went that route during the Great Financial Crisis struggled with hiring in the recovery. These days the discrimination resulting from LIFO is also frowned upon, especially given the diversity efforts in the last few years.

In other words, seniority (i.e. loyalty) no longer guarantees job security.

Reframing Job Search Pain

For those using the excuse that the job search process is too time consuming, and it is overly exhausting, I have sympathy for you. You are not wrong. But complaining won’t change the process.

Instead of thinking about the uphill battle of finding a new job, focus on what is on the other side of that hill. It’s not just higher pay, it is often better health and happiness. Even if happiness is only incremental, you’d be surprised at how good a new job with higher pay can stave off the downward spiral of stewing over feeling undervalued.

Your family ad friends benefit too. 😊

Let’s make The Shift!

Lindsey

1. Gartner.