Life After Layoff: Why A $100K Salary Isn't What It Used To Be

 

[VIDEO] I still dream of making six-figures in my career and don't think that's even a close goal to realize. And to make at least $100,000/yr. is that a good number in today's economy?

Think inflation, higher cost of living, or more expenses as far as housing, transportation, groceries, utilities, etc. And think about the increase in college tuition and by extension student loan debt. Is $100,000/yr. a good number to earn from working?

A Life After Layoff is a YouTube channel offering career advice from a recruiters perspective. One tagline is "becoming the CEO of your career". The question is how does the question of a $100,000 become a topic on a job about careers? One advice he gives at the end is certainly to make that much money in wages/salary is more attainable, but takes careful career planning.

To make that six-figure goal, that's what I need at this moment.

Bloomberg: Inflation has turned $15/hr wages into a setback

 I wish I had seen this article a while back. Bloomberg:

The typical inflation rate is about 2%; this year, it’s been more like 5%. Workers who don’t know this, or who are slow to perceive the rise in prices they pay for goods like cars and groceries, won’t realize this, and will be happy with their unusually large raises. But companies, whose accountants and managers certainly know the true inflation rate, will also be happy, because they know they’re not actually paying more for labor.

That information asymmetry between workers and employers may be exactly what keeps wages from rising faster than inflation. If workers take a year to realize how much prices have gone up, they may be satisfied with the raises they got during the time of high inflation — even if that inflation ultimately turns out to be transitory. By then, it might be too late to negotiate for a real, inflation-adjusted raise. Many people suffer from what economists call “money illusion” — they tend to think of their income and wealth in pure dollars, instead of in terms of its real purchasing power, at least in the short term. Money illusion could in turn be a source of what economists call upward sticky nominal wages — the tendency of wages not to rise too fast in dollar terms, even when there’s a burst of inflation.

In other words, even if all the aforementioned economic factors driving up wages are very real, price rises could be happening independently of wage growth and could be eating up all the gains because wages simply don’t respond to inflation very quickly. By allowing prices to rise at a rapid clip just when workers are finally getting a bit of bargaining power, the U.S. might be wasting a golden opportunity to increase living standards.

Implications:

Eventually, people will realize that prices went up, and that their raises were illusory. At that point they will start getting mad. This is what happened in the 1970s, when a decade of high inflation coincided with — and possibly caused — real wage losses for the average American worker. Surveys later showed that the reason people didn’t like inflation was precisely that they thought their wages couldn’t keep up.

Economics is a weak subject of mine your wages go up but not enough to keep up with the prices of groceries and fuel. And we're in a time of weak economic growth.

Women’s Student Loan Debt Nearly Twice As Men’s

I suppose it's funny that this could somewhat piggy back on last night's post on the deflation of the college bubble:

Women owe about $890 billion of the country’s $1.48 trillion student loan debt, nearly double the $490 billion owed by men, placing them at a financial disadvantage as they begin their careers, according to a recently released report from the American Association of University Women (AAUW).

The study, which analyzed data from the U.S. Department Education from the 2015-2016 school year, also found that women graduating with bachelor’s degree owe on average $2,700 more in student loans than men do. Women, who account for 56 percent of enrolled college students, are far more likely than men to graduate owing money — 71 percent for female grads vs. 66 percent for male grads, according to the AAUW.

And this stat was broken down further according to race:

Black women graduate with the most college debt, averaging about $30,400, topping the roughly $22,000 white women owe and the $19,500 white men owe.

Furthermore, women with college degrees and full-time jobs tend to earn less money to pay down their student debt, making on average 26 percent less than their male colleagues. The picture is even bleaker for black and Latina women with bachelor’s degrees and full-time jobs: They earn on average 37 percent and 34 percent less, respectively. than white men and, as a result, often struggle to repay their loans, the study says.

If you keep reading article you're going to see it, this gender pay gap! For some reason not explained here Black and Latin women earn less than white males. Kinda wild when you think about it.

The solution according the the aforementions AAUW is to strengthen pell grant programs. For me I benefited from pell grants however I chose to complete my baccalaureate from an expensive private liberal arts college so the fact that I borrowed money negated the benefits of those grants.

The answer for both men and women of any race/ethnicity is they need to have some skin in the game as far as college. Have a viable plan and don't just depend on federal aid or the financial planning of your parents, put your own money up. If it's something you're serious about show what you have, this is what I wished that I had when I graduated from high school.

If you graduated from high school this year it's still not too late for you to develop some financial saavy as far as your education. It shouldn't matter if you decide you have to take a break from school for now if tuition is going a bit higher as you matriculate.

I can also add, that college isn't and shouldn't be the answer for everyone! 

Check out how much you could get paid at Walmart!!!

 

Found this photo via Newsalert. For those who insisted Walmart doesn't pay their workers enough money - as they did here in Chicago a few years ago when the retailer wanted to expand here - this image should elicit one question in your mind. What was those naysayers talking about? In any event here's the background to this now hiring sign taken in the city of Williston, North Dakota.

Increasing the minimum wage?

Since recently this has become something of an job hunting blog, I found this article via Newsalert quite interesting last night. At least here in Chicago there is a push by Chicago Aldermen to raise the minimum wage to at least $15/hour.

It almost reminds me of the fight to keep Walmart out of Chicago in the last decade. A city alderman proposed legislation for a living wage for big-box employees. That proposal was at least $10/hour with $3/hour in benefits. But imagine that fight and how it ultimately went back then.

It seemed while the politics kept Walmart from expanding in Chicago, it seemed Walmart wasn't going to lose. Ultimately the city has 3 Walmart Supercenters in the city and quite a few smaller Walmart stores dotted around the city. Although to make this expansion happened involved compromise between Walmart, the city, and even the unions.

Now the whole $15/hour minimum wage issue isn't new, there have been rallies for such a proposal and I showed a video of such activity last year. I can feel the ones who feel like they should be paid more, in fact I ought to be out there protesting with them. At the same time my feelings on this issue is conflicting.

Minimum wage is not supposed to be livable, it's a starting point. If you work hard or gain more valuable skills or even get educated then you can get beyond the minimum wage. Just because you work a low-wage job doesn't mean you're going to stay there unless you have little ambition to move beyond that level. Or at least that should be the idea.

In some of the articles I've seen on this issue many of these workers complain about not getting raises. I can feel them on that if they're performed at a level that their management expects of them then there's no reason to not give a raise. I also recognize that employers will put their priorities in other areas that might be taking care of the employees might not be high on the list of priorities.

I linked to two articles in talking about this. In the first article we see how a business complains about the push raise the minimum wage. They start talking about how they may not have as many entry-level positions to be filled as they did before any wage hike. And also how this might mean higher prices for consumers because those wages have to come from somewhere.

On the other hand, you have one of the Alderman who want to see a $15/hour minimum wage saying that the economy has never been harmed by a minimum wage increase. I'm sure this is justified by the many people who are working at the minimum wage and the many responsibilities such as food, rent, and taking care of children.

Well, I wish I knew an answer to this. To me raising the minimum wage isn't an answer it's a band-aid and certainly a political one at that. Hopefully when this is considered here's hoping business won't be forced to raise prices or stop hiring because of it.

Gateway Pundit: Washington City Votes In $15 Dollar Minimum Wage

If you live in SeaTac, Washington and work in a minimum wage job your pay will go up to $15/hr. It sounds really good to have pay that high, but if you're a business owner and you pay wages then there's going to be overhead. If it costs more to employ people then you have to find ways to cut back somewhere perhaps you won't hire as many people or perhaps prices go up. Well in any event I wonder about the outcome of this "raise" now that it's passed in SeaTac.

Obamacare provision delayed...

There's a lot to that has been written about a recent announcement that a provision of the Obamacare law passed in 2010 will be delayed one more year from January 2014 to January 2015. Basically what's being pushed back is the provision where employers who have at least 50+ employees who work over 30+ hours per week would be forced to provide health insurance.

Having to quickly scan any articles about this shows that many of the talking heads out there are looking at this with political eyes. Think about it next year is not only state elections but congressional elections. Not that I've been paying attention to any forecast on how either of our major parties look in both houses of Congress.

Think about this however. When Obamacare was passed in 2010 who could've anticipated the trouncing the President's party would take at least in the Congressional elections with the Democrats losing control of the US House of Representatives. Would maintaining this provision prove precarious for Congressional Democrats heading into 2014?

Also another aspect which interests me is the lens through businesses will look at this announcement. Without a doubt this legislation is well meaning intended to help many Americans gain access to health care that was beyond their reach. It's already expensive to go see a doctor or to get care for any ailment and of course many employers aren't exactly able - if not willing - to provide any sort of health care coverage for their employees.

As a matter of fact an article that I have read on this subject suggest that this delay will prove beneficial to those who would in the food service, retail, and hotel industries. Hopefully responsible employers who value their employees will be able to do what they can to provide health insurance for their workers. Because of this law and its well meaning implications we may have heard where some employers were already talking about cutting worker's hours in advance.

Also I associate this with the minimum wage workers. I believe in the idea of moving up in the work world getting promoted or gaining skills to be able to get better jobs in the labor market. Alas a well meaning health care mandate and a potential rise in the minimum wage seems like a good idea. Unfortunately it seems that this may have adverse effects on the workers in the short term at least as business seek a way to cope.

In any event it would be interesting to continue to read all analysis of the decision of Obama's administration to delay implementation of their landmark achievement so far. What would be the implications for those affected businesses and would this help the political prospects for either party?

The minimum wage debate...

Apparently raising the minimum-wage has become a policy goal for not only Illinois Governor Pat Quinn but also President Obama in their respective annual legislative speeches i.e. State of the State/Union. I'm sure raising it close $10/hr in Illinois and for Obama raising the federal mimimum wage to $9/hr would help out a lot of people who are working minimum wage jobs.

At the same time, there are some unintended consequences. For example not everyone has particularly generous employers who might give you the same amount of hours from week to week or whatever. Hours could get slashed because now the politicians have pushed up the price floor for labor.

The way I see it looking at the graphic I recently found on FB, the minimum wage is only a start especially for those who are just entering the workforce. The graphic is correct in many ways and basically one way of saying a minimum wage position shouldn't carry you all your live. You should be expected to learn new skills, get an education, or otherwise make some sort of contribution to your jobs. If your employer doesn't value that at all and can't help but look at their own bottom line it's time to move on.

Besides, I recognize that this is a tough economy and there aren't many jobs to be had out there. No way of mincing bones about that. Right now it's about taking what you can get and while you got the job you have continue searching for the job that will enable you to pay your bills and get you to the level you wish to be. That's what my motivation is and at the same time I recognize that not all of us will stay at the minimum wage forever.

I just hope the politicians who propose minimum wage increases realize what they're doing. It's well meaning enough sure, but what will the effects be not only on those who are currently working such jobs but the ones who are looking as well. Hopefully the politicos are looking at both sides and not just pushing this through without thinking.

Tribune: Quinn minimum wage hike could be tough sell

Via NBC Chicago

Raising the minimum wage is certainly a well-meaning policy goal and taking this text from today's state of the state address this is where it comes from:

Our businesses are only as good as the employees who drive their success.

Nobody in Illinois should work 40 hours a week and live in poverty. That’s a principle as old as the Bible.

That’s why, over the next 4 years, we must raise the minimum wage to at least $10 an hour.

Senator Kimberly Lightford, you are doing the right thing with your mission to raise the minimum wage.

And as Dr. Martin Luther King Jr. once said, it’s always the right time to do the right thing.

It sounds great, but this is still a tough economy. You raise minimum wage to $10/hour then what happened next? Employers could elect to cut hours so instead of minimum wage workers doing at least 40hrs it could get cut down to 30 or less. Perhaps the work week for such workers could be reduced from 5 days to 4 days. What I'm getting at is unintended consequences.

At least the question is put up in front of Gov. Quinn right now. Besides is this about boosting the prospects of low-wage workers or boosting Pat Quinn's abysmal approval ratings as we head into 2014 a gubernatorial election year:

But beyond the finances, Quinn may hope a populist pocketbook issue can boost his own low approval ratings as he prepares to fight potentially big-name Democratic challengers like Attorney General Lisa Madigan and Bill Daley, the former white House chief of staff and a high-profile heir to the Daley family legacy.

Quinn called for a minimum-wage hike during the 2010 governor’s race, while Republican challenger Sen. Bill Brady opposed it.

Following Quinn’s speech on Wednesday, Brady said he wanted to review Quinn’s plan when there details are rolled out.

Hinsdale Republican Sen. Kirk Dillard, who like Brady is eyeing Quinn’s job, said he does not support the minimum wage hike. “We need to create better jobs, not minimum wage jobs, for those who are trying to raise a family,” Dillard said.

The chief sponsor of the minimum wage increase is Sen. Kimberly Lightford, the Maywood Democrat on Cullerton’s leadership team. She has sought to negotiate with foes and backers of the legislation for eight months. She said she wants to roll out a bill in the next few weeks.

Well, time will tell if this will prove to be beneficial or not. Time will only tell if this will help Pat Quinn if he seeks another term as Governor of Illinois. Will this help the prospect of this state being able to attract more jobs?