The Salary Reality

22 Apr 2013

Warning: this post contains salaries.

In 1990, when I started my first software developer position with the University of Michigan, I earned about $25,000 annually, plus the University’s additional benefits — good health insurance, retirement contribution double-matching (yes, you put in a dollar, pre-tax, and for every dollar you put in, they put in two). Yes, it’s considered a faux pas to quote actual numbers in your salary history, but I was a state employee; that should be a matter of public record somewhere. I should have taken much better advantage of the program and contributed a lot more than I did, but, well, 23-year-olds are not necessarily wise in the ways of planning their retirements.

Comparing salaries by year is a little problematic, because you have to decide just what inflation or cost-of-living numbers you want to use, but I think it is reasonable to say what this cost-of-living calculator says, which is that in the year 2000, that $25,000, adjusted for cost of living, would be about $33,000. In 2000, I was actually earning somewhere around twice that. So I was comfortably ahead of cost of living — I had roughly doubled my income in a decade, partly because I switched back and forth a couple of times between the lower-paying University jobs and the private sector, and got a lot of different experience.

Then came the dot-com bust, and general stagnation. And so between 2000 and 2010, though, my income, adjusted for cost of living, rose by about… hang on… carry the two… round that to approximately… nothing. And if I extend the same calculation out to 2013, I find that, at least by this measure, my income relative to the cost of living has gone down.

It’s not just me. I’m looking at jobs. Now, I should be looking at senior or managerial positions, but there aren’t a lot of those, so I’m trying to cast my net wider, and in the process skimming through descriptions of jobs that I just can’t afford to take… but thinking about them. Here’s a job. It’s an assistant manager position at a state University — “The (DELETED) Technology Support will serve as the lead resource responsible for supporting information technology solutions, and providing dedicated technology assistance to the assigned. In addition, this position will be responsible for maintaining the integrity of the computer system,classroom technology and mobile device environment within that unit.” It requires a bachelor’s degree and 3 years of experience. They don’t quote a salary — very few positions actually do — but it points you at a table, which indicates that a position of this grade pays, at a minimum, $31,300.

One interesting thing about that cost-of-living calculator is that you can work it backwards, instead of just forwards. So how does $31,300 in 2013 compare to my $25,000 job out of college in 1990? Well, I’m glad you asked. It’s about 47% lower. Of course, the bottom of the range isn’t necessarily what they would pay; I don’t think I started quite at the bottom of my job range back in 1990, and a competitive candidate presumably would have room to negotiate it up a little bit. But could you negotiate it up to around $45,000? Because that’s the approximate value of that $25,000 job today. It seems unlikely. And so this is one small measure of how very, very much prosperity the middle class has lost.

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This work by Paul R. Potts is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. The CSS framework is stylize.css, Copyright © 2014 by Jack Crawford.

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