Sunday, May 4, 2014

What is your work worth?

The growing disparity between the middle class worker and top earners in the United States should be confusing as technology has helped to greatly grow worker productivity across the board so that an individual American worker can do much more today in the same time than before and thus generate more revenue for a company.

If you noticed at a job that you seem to be doing 4 times as much work since you were hired years ago as technology and workplace improvements help you along, are you paid 4 times as much as then?

My guess is, no.

You may be paid somewhere over 20% more, with a 5% annual raise for 4 years--not going to compound here--despite maybe doing 400% as much work based on productivity increases and just being that good as you've learned your job.

And all of that additional work value goes up the chain in your company, where if it is a corporation the CEO probably gets paid a LOT more than he did when you got hired as a system has been rigged where most of the money is being cycled to the top.

Some say that workers should simply force higher pay, like through unions, but let's face facts: can you imagine say, demanding under any circumstance a 100% increase in any given year? With steep increases, not quite that high but still high, so that after 4 years you're getting paid 4 times what you got when you were hired?

People who are the top earners probably can, especially those in the financial industry.

Few people outside of the financial industry can probably imagine under any circumstances doing such a thing, and besides, how do you really know if you're that valuable?

Some blame globalization as, for instance, call centers went outside the United States, which technology made possible, and I have had more than one conversation where I have been frustrated with talking to some person in another country who really was not good at the job. So what if they were cheaper to the company using them? That cheapness had a cost. And I have talked to excellent people in other countries who did a great job over the phone. I suspect they were underpaid!

If you think it through, those great phone people were probably vastly underpaid. But how would they know what their work is worth?

Let's say over time people start figuring it out, then people overseas who are great on the phone charge more, and eventually achieve parity with people in this country who are great over the phone, and businesses lose the cost advantage of hiring overseas!

People may suspect that wage differences are so steep because work is valued differently in different cultures but currency exchanges tend to shift to balance over time, which means that the real situation is arbitrage.

A lot of companies are taking advantage of a global situation where workers do not know their value.

So the surprising solution is that people need to work harder at figuring out what they're worth, and the web can actually help there as well, as I have been pleasantly surprised by web sites that will help you figure out a salary to request in a job interview.

These issues are really important to me as I am currently unemployed. And I use the situation of someone worth a LOT more than they are being paid as I have been in such situations where I realized I was doing the work of 4 people because technology helped me and I was really efficient at using it!

But I was being paid the salary of one.

Eventually I got laid off, and no I had never made any salary demands. At the time I thought of it as a "day job" while I figured out how to make money on the web, so I was treading water trying to figure things out. No way I was going to rock things by pushing for more money. Nevertheless, got laid off with some other folks.

(Maybe I should add that while it was a group lay-off my being part of it was a bit of a surprise to me, though in retrospect it might have had something to do with me finally putting up a photo on the web the month before. But don't know for sure. Who knows.)

Figure out what your work is worth I think is the best advice, especially at a company where you have worked for a while and watched people leave without being replaced!

Your suspicion should be, especially if your company is still doing well or better, that you simply are doing work that is THAT MUCH more valuable: but are you getting paid for it?

Or are you in essence now doing quite a bit extra--for free?

James Harris
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