Hiring managers keep telling candidates that $100,000 is a lot. Let’s check that.

According to the Bureau of Labor Statistics, consumer prices are up about 67% since 2006. So $100,000 today buys roughly what $60,000 did then. Compared with just 2016, it’s about $71,000.

That $80,000 “manager” offer? In 2006 dollars, it’s about $48,000. The $70,000 tech support role is about $42,000.

And that’s the general average. The things that actually decide whether a paycheck stretches have gone up faster:
* Housing costs are up about 75%, and the median home price has nearly doubled.
* Family health insurance premiums have more than doubled, from about $11,500 to roughly $27,000.

This isn’t new, either. In 2008, I watched a newly promoted director take $85,000 for a role whose previous holder made $135,000. The pitch was, “You don’t want that much. It’ll bump you into a higher tax bracket and complicate your life.” That’s a myth. Only the dollars above a bracket’s threshold get taxed at the higher rate, so a raise never lowers your take-home pay. In today’s money, that’s the difference between about $133,000 and $211,000. Lowballing has always come with a story about why less is better for you.

Six figures isn’t a reward anymore. It’s what a middle-class salary from 2006 looks like today and often not a comfortable salary if you have a family to support. If your salary bands still feel “generous,” check what year they’re set to.

Pay what the work is worth today, not what it felt like it was worth in 2006.

Years ago I knew a brilliant engineer who took a job with a new company as their first hire… programmer, strategist, everything.

They delivered work that allowed the company to become a successful, thriving business that ultimately supported a sales team, marketing team and office workers, as well as a (what some might call) lavish lifestyle for the founder and offices in a prominent upscale area of the city this was in.

For the first few years they worked themselves to the bone, working through holidays and 12+ hour days building solutions for the company that brought in lucrative contracts. For months if their family wanted to have dinner with them it would be at the office, or cold leftovers whenever they finally made it home to sleep.

Eventually they hit burnout and had to walk away.

Sometime later I happened to be talking with former employees of that company who had moved on to other jobs and in a casual conversation they said “Hey you remember so-and-so from that place?” I did. They followed with “Man we all felt so bad for them and how things went. It’s like they built that whole operation and they were the lowest paid person in the company. Even the receptionist was getting paid more and we all knew it but nobody knew what to say. I hope things worked out well for them.”

😳

Then, years later I happened to run into the owner of that company in a public space and we had a pleasant conversation (I had done some contract work for them over the years myself) and at one point he asked if I was still in touch with the former employee and if I knew how they were doing. I shared what I was aware of and asked him casually… “so I ran into some of the other guys and they were telling me something, is it really true that (the former employee) was the lowest paid employee there?” His answer was yes, but it was the person’s fault for undervaluing their talent and he held no fault, hopefully they learned from that experience. He literally used the term “tough love” to summarize the situation.

😶

I want you to sit with that story. Do not be that guy. If an employee is the source of your revenue, compensate them accordingly. Not everyone is savvy about fair compensation for their skills. Someone lowballing themselves isn’t a win for you. It’s exploitation.