We all grew up believing these two axioms of work:
1. You're going to do better financially than your parents.
2. When you work hard you'll get a raise.
Well, it turns out this is not the reality for many of us and maybe the blame is partly ours.
Yeah, yeah, there's the greedy Man keeping us down, but many of you are also not demanding what you're worth.
Even though a growing number of you are feeling good about your employer's financial stability, 76 percent of you said you're willing to take a pay cut, according to survey of 2,315 employees conducted by Harris Interactive for Glassdoor.com. And among those who are out of work, 88 percent said they would take less in salary in order to land a job.
Clearly, that willingness has contributed in some way to the depressing signs of diminishing pay for everyone from college professors to auto workers.
Who would have thought a job in information technology would lead to stagnant wages. A cover story in Information Week recently had a big "0%" on the cover and it detailed how for the first time in more than a decade the pay for most IT professions, staffers and managers, is flat.
The fallout of a long, deep recession is obvious in the data:
* 40% of IT pros report a pay freeze, compared with 26% in 2009.
* 15% have had their pay cut, compared with 6% in 2009.
* 29% have had their benefits scaled back, up from 17% in 2009.
* Only 23% say the economy has not impacted them professionally, compared with 34% in 2009.
One factor that could also be contributing to IT wage suppression is alleged collusion on the part of some big tech companies. The Department of Justice is investigating a number of companies who supposedly have agreed not to poach each others top talent, according to a recent story in the Wall Street Journal.
"It seems that the DOJ is trying to figure out how and why agreements among firms not to poach each others' employees reduces competition in some way," said Timothy Gardner, professor at the Vanderbilt Owen Graduate School of Management. "My research shows that these agreements relieve colluding firms from having to respond to the competitive actions of their rivals," such as raising wages, he pointed out.
Another story in the New York Times today reports on how pay for college faculty rose at the smallest level in 50 years:
Over all, salaries for this academic year are 1.2 percent higher than last year, the smallest increase recorded in the survey's 50 years -- and well below the 2.7 percent inflation rate from December 2008 to December 2009.
The survey found that average salary levels actually decreased this academic year at a third of colleges and universities, compared with 9 percent that reported lower average salaries in the previous two surveys. Private and church-related universities reported shrinking average salaries more often than public institutions.
And the academic pay situation may be even worse...
While things are pretty bad among these professionals, workers in the manufacturing sector have seen their pay slashed in half in some industries from the workers before them.
At a Ford Motor plant in Chicago, the new workers are making half of what the existing workers mad:
The union's contract with Ford allows the company to fill jobs left by older workers who leave or retire with new employees earning $14 an hour, half of what current workers receive.
That means for the first time many of these workers will be making less than their fathers and mothers who pursued similar careers.
I know, the economy and the job market stink. But many of these firms and organizations are still making money but workers are still getting pay shafted. Why? Because many of you are still shell-shocked by this recession.
The Information Week article pointed out that most IT workers aren't that upset over their stagnant paychecks:
Today's rotten job market has made employees more risk averse. The flip side: They're less concerned than they once were about their pay and more focused on whether they are recognized for their work, have the right tools to do their jobs, and are gaining the right skills.
I'm all about being recognized for your work, but workers have to stop letting their employers off the hook. Using the recession as an excuse to cut pay or keep from doling out raises has become easy for employers.
Why would managers even think of paying more money when some folks out there are so desperate they'll even work for zero cents an hour? A growing number of job seekers are willing to work for free. I just wrote a piece for Time on this disturbing trend that is probably contributing to depressed wages.
And I've been writing about these types of unpaid internships for over a year on my blog, a phenomenon the mass media is only now waking up to.
From my CareerDiva.net blog:
A growing number of jobless workers who are out of college are working for free in volunteer position or so-called internships, as employers across the country take advantage of the huge pool of free skilled labor among the seven million unemployed Americans. This despite the face that volunteering, especially volunteering for private companies, can be illegal in some cases and unethical, at best; but desperate out-of-work employees are more than willing to oblige, some even offering to work for free as a way to beef up their resumes.
There is a lot to the shrinking paycheck story.
There's a great piece in the Wall Street Journal today by Robert Reich, the former Department of Labor Secretary under President Clinton, that looks at the dismal picture beneath the recent upbeat jobless data:
The official unemployment numbers hide the extent to which American workers are already on this downward path. But if you look at income data you'll see the drop.
Among those with jobs, more and more have accepted lower pay and benefits as a condition for keeping them. Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far lower wages than the old.
Hellllooo Gen D!
I know, your bosses and hiring managers say they don't have the money to pay you more, but how much of what has happened to the paychecks of American workers has to do with our acceptance of diminishing returns?