Saturday, October 22, 2011

You Raise Me Up

Halloween marks the starting line of the great annual holiday race.  First Halloween, then Thanksgiving, followed by a big a religious Holiday of some sort (yes, Christmas is actually a religious holiday), and ending with New Year’s.  That is a lot of festive celebrating in over a 2 month period.  Fortunately, celebrating things is usually fun.  We get to see family and friends, eat lots of delicious (but not nutritious) food, and hopefully get some presents.  Some of us might even have a birthday celebration squeezed in there, bonus points (unless you’re too close to Christmas to make it a separate event, then you get minus points). 

The unfortunate part of the holiday season is that someone has to pay for it: you.  All of us are stuck with paying for part of the bill.  And while retailers (the entire economy, really) rely on the holidays for a large part of their financial success, we are constrained by what we earn (assuming we spend responsibly).  That seems to be a problem for many of us, who aren’t seeing much in the way of raises, especially while we are seeing increases in prices that continue to shrink the value of every dollar we make.  According to data released Thursday, our average weekly earnings went up by 1.8% over the last year, to $753 per week, yet the prices we pay for stuff increased by almost 4%.  So, in “real” terms, our wages have gone down over the last year.  That is not exactly setting the mood for the upcoming celebrations.

For those of us daring to be bold, or getting our annual performance reviews, now is the time to be brave and ask for a meatier raise.  How much should we be getting?  Certainly it varies by occupation, industry, and which part of the country you are in.  Another factor is your educational attainment.  Take a look at the national average wage by educational attainment (median means 50% of people make above this amount; 50% make less).  Where do you fit in?  For the record, 54% of us have a high school diploma or an associate’s degree.
Average (Median) Weekly Earnings by Educational Attainment (3Q, 2011)


Now think about our average wages in terms of the cost of the new iPhone 4S, which was apparently oversubscribed.  These phones start at $199 dollars, plus all of the monthly connection fees, internet usage, and apps that go along with it.  The cost of the phone by itself is 26% of an American’s average weekly earnings.  And we aren’t about to give up our lifelines to today’s information economy.  Yet we haven’t even touched food, rent, utilities, healthcare, or gas (which, at the current average of $3.47 per gallon can easily cost over $50 for a tank).   It’s hard not to notice how much a pint of ice cream, or a box of cereal, costs these days.  A bag of potato chips can easily reach $5.  At this rate something’s got to give.  Hopefully for you it’s your salary – and a big increase at that. 
Tell your boss that you deserve to be compensated among your peers.  Or that you would like your company to pay for classes, so you can climb the ladder of educational attainment (you would like to “be the best you can be”).  More compelling, tell your boss that you are losing money if your wages do not keep up with basic inflation (cost of living).  If we can’t afford to buy the stuff we make, then who is going to fill that role?  (What is an “export” anyway?)  It could ruin the foundation of our economic well-being (over-spending has nothing to do with it).  Yes, it’s true that as employer’s costs go up, prices go up and we’re back to where we started in terms of purchasing power.  But at least our fixed debt will go down in real terms, very good for our mortgages.  Now is the time to make your case.  Good luck!
(Bureau of Labor Statistics, Energy Information Administration)

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