Better Base Pay: The Fastest Way to Leave Your Debt Behind?

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A few weeks ago, I announced that I had targeted debt and debt liberation as my main research focus. As of the beginning of this month, I have moved on to the second phase of my own personal debt emancipation plan. Whereas Phase I involved setting up a budget, reading popular resources about personal finance, and cutting expenses where possible, Phase II emphasizes researching peer-reviewed resources, conducting a top-down review of new revenue avenues, and carrying out a complete audit of all banking activity. As part of my monthly bank statement review, I have identified base pay rate  (not including overtime, shift differential, bonuses, or on-call, special assignment, incentive, holiday, vacation, or sick pay) as the first topic I want to analyze. There are circumstances where base pay is considered by itself, like debt-to-income calculations that require a current pay stub rather than a previous year’s W2, and your base pay can affect major life events, like securing a mortgage loan for a house. In other words, the topic of regular wage earnings is not merely academic.

The most common ways people free up money in their budgets to pay down debt are increasing income and decreasing spending, although I would add education and social action as debt solutions of equal importance. Though the idea of increasing your base pay fits into the income bolstering part of the equation, I would like to caution readers against adopting a belief that increasing revenue alone is the solution to financial woes. If that were the case then every time our nation’s GDP increased the ratio of national debt to GDP would decrease, but that hasn’t happened once in the past 15 years. Similarly with personal finance. If you increase your family’s income without also making changes to your spending habits, you run the chance of spending all the extra money you’re taking in. This is something to keep in mind during the discussion ahead.

There are four basic options for increasing base pay, and I have listed them from most to least comfortable. All of these choices assume you have a full time job. If this is not the case for you, feel free to skip forward to the section dedicated to part time and temporary jobs.

1. Request a pay raise at your current job.

There are a lot of life hack articles online that will tell you that getting a pay raise is easy if you are bold enough to ask for one and smart enough to provide clear examples of extra work you have done and ways you have saved the company money. For many of us, this is not actually an option. Within many corporations, the review process has been streamlined into a yearly process, assessment is conducted by managers who have little to no interaction with you throughout the year, and while general criteria for pay increase may be available in handout form there is usually little transparency regarding specific reasoning behind management’s ultimate decision. There are even businesses out there where employees are penalized with up to and including termination for discussing pay rate with another employee. As it is, the single most effective means of securing a pay raise is to simply wait.

Is this portrait I have painted of pay raises accurate in your experience? Whether you answer yes or no, please feel free to contact me either publicly or privately with your thoughts. Please accompany your story with details about your employment situation and whether or not you feel comfortable with me using this information in future posts.

Raises do happen, but they seldom happen on your schedule and they rarely increase your pay to your satisfaction. They benefit those patient enough to wait, but for many of us standing still is not an option.

2. Request a promotion at your current job.

In many ways, requesting a promotion is much like requesting a pay raise: it is usually a great way to increase your base pay rate (unless we are talking about horizontal “promotions,” which are not really deserving of the name), and it is usually not as easy as lifehackers will have you believe. While both require a certain budgetary allotment from the company, the additional complication for getting a promotion is that, unless business is booming or your employer is sitting on a pile of savings, higher paying positions usually only become available when current positions are vacated.

If you have applied for a promotion, there are a few things that you can do that will give you an edge in the competition. In many companies, management will speak to supervisors and other senior employees to get an idea of the internal talent pool, so if you can lock down a supervisor’s recommendation this can go a long way. Often, this begins by expressing your desire to take on extra responsibilities and move up the ladder early on. A good supervisor will recognize your intentions and give you opportunities to prove yourself. The other half of the equation involves having a great resume / application, but we will cover this issue in more depth in the next section.

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If / when you are set up with an interview, you want to dress to impress and give a great performance. While I do agree that you have to be yourself, you also need to sell yourself. This starts with knowing your audience. Does your interviewing manager believe personal expression benefits the team or does he / she favor strict adherence to prescribed behaviors? The answer to questions like these will help you to determine how to present yourself in the interview. You will need to be able to answer fundamental questions (What makes a good leader? What is your leadership style?), but you also need to answer situational questions as well. When doing so, keep your answers grounded in specific examples. With each answer you want to identify a problem, explain your solution, and describe the consequences. Finally, you need to prove you’re skilled at time management. While the interviewing manager may express a desire to hear an exhaustive list of your questions — and you should make sure that you’re actively asking questions in any interview! — you want to be just as punctual with leaving as you are with arriving. If the interview is scheduled until 10am, you want to make sure you are wrapping things up at 9:55.

It is unfortunate, but there is a chance that you won’t even get an interview. In the past decade I’ve experienced a shocking trend of employers expressing preference toward external candidates over internal candidates. If this is the case with your employer, you may want to seek outside training and / or certification to make yourself more competitive, or you may want to get a job somewhere else at a company that values developing from within.

  1. Get a new job.

In my experience, the most effective method of increasing your base pay is getting a new job. There are many resources out there — Craig’s List, Indeed, etc. — but they are often impersonal, and I’ve found that these “opportunities” tend to be dead ends. Your most important resources are your friends, family members, and former colleagues. These are the people who can see if their own employer is hiring, guide you through the idiosyncracies of the application process there, make sure your resume is looked at by Human Resources, and recommend you for positions. They paint a picture of you as a person, which is nearly impossible to do with a resume alone.

You also want to research the business and position that you are applying for. If it is a large enough corporation, you can start with their Wikipedia entry, but otherwise the company’s web site, news searches, the Better Business Bureau, and Glassdoor are probably your best resources. You want to know what this company is all about and what you’re potentially getting yourself into. Regardless of how desperate for extra money you may be, you need to go into this with the attitude that the business in question needs to convince you they’re right for your needs just as much as you need to convince them that you are right for theirs. This will be perceived as confidence in an interview and confidence tends to work in your favor.

Your resume ought to be targeted rather than broad and all-encompassing. If you are an experienced sales representative looking to get a sales job, you need a sales resume. If you are changing from one career field to another, you need a resume that shows this. It doesn’t hurt to know someone in HR who can help you with a resume, but a Google search will do in a pinch. Instructions and examples for any type of resume are available immediately so long as you are typing in the right keywords. When you get down to typing out your resume, your wording ought to mirror that of the company’s mission statement and the verbage you see on the onling job posting. This is especially important as many larger companies have begun to screen their applicants with a keyword search, so you can lose a possible opportunity simply for excluding “integrity,” “teamwork,” or “excellence” from your resume.

As we discussed in the previous section, you want a great interview, but it is worth discussing here since there are some key differences when you are interviewing with a new company. First of all, the people at this company do not know you, so be prepared to explain any shortcomings in your resume like periods of unemployment or reasons for leaving previous jobs. Second of all, despite all of your research, you effectively know nothing about this company. You need to know how much you will make, what the hours are, what the day-to-day expectations will be, what the benefits will look like. You want to make sure all of your questions have been answered to your satisfaction before you say yes. You cannot assume anything.

The best tip I can give you is, if you want to be employed, you must already be employed. For example, if you are looking for a job in accounts recievable it would be better to do so while already working part/full time at McDonalds or Subway than it would be if you were unemployed for an extended period of time. You will have less time out of the day to look for jobs in this situation, but your resume is going to look better to anyone who picks it up. Despite what we hear on the news about unemployment rising or new jobs plummeting, there are always jobs out there. In 2008, amidst the country’s economic crisis, I was working at a fast food fried chicken restaurant in Texas, and my manager once said something to me that really stuck. He said, “I don’t know what they mean when they say there are no jobs. I have more job openings than I have people to fill them.”

There is no shortage of unfair or predatory practices when it comes to hiring, but I feel strongly that the biggest obstacle to a new job is you. Maybe its too much work for a new job or you’re secretly afraid of change. Perhaps you have some insecurities about putting yourself out there or you’re worried that your next boss will be worse than the last. Whatever is going on in your head, you need to get over yourself. It is the only sure fire way to get a higher paying job.

  1. Social Action

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The only public movement I know of that is attempting to tackle the issue of raising wages is the nationwide protest for a $15 minimum wage or, as it is often called, a living wage.

If you know of other instances of social action where the participants are attempting to help others gain a better wage please share your wisdom. Furthermore, if you have protested on behalf of a Living Wage or any other similar movement please drop me a line and share your experience. My beliefs align with many of these causes but I am remarkably inexperienced with oranizing and protesting, so I am really going to need to lean on a few of you for this and future discussions.                       

The idea here is that it is unethical that the cost of living should continue to go up in price without the minimum wage increasing at the same rate.

It should come as no surprise that the financial sector has come out in opposition to this little bit of policy with claims that it would be detrimental to the economy and the very people that it is meant to benefit. This strikes me as a conflict of interests, as many of these money gurus are the very same individuals who have benefitted the most from this nation’s income inequality. It does stand to reason that there would be some short-term negative consequences. However, if I have learned anything about American economics in the 20th and 21st centuries it is that the path to recession and depression is paved by those who are only looking at quarterly gains and losses. A living wage is an investment in infrastructure that strengthens the middle class and makes our economy more fluid, and  moreover it is a long needed dose of ethics into our economic system.

We ought not be divided about this issue. I have heard too many people badmouthing the idea that some “burger flipper” should get $15 an hour as if the McDonalds employees who have come out as the leaders of this movement don’t deserve to be able to take care of their families working 40 hours per week. This is how the wealthy keep money out of the hands of the poor and middle class, by turning us against one another. If you are living — burger flipper or otherwise — you deserve a living wage.

These four suggestions for improvement are quantitative and practical, but behind them lurk some issues that are qualitative and theoretical. This is certainly not an exhaustive list of issues associated with the search for a higher base wage. They are merely the first four discussion topics that I brainstormed in outlining this post.

  1. Meaningful Employment

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Most of us spend more time with our co-workers than we do with anyone else in our lives, and many of us put in more hours working than we do sleeping. If our life stories are defined by the things that take up our time, then we are more our jobs than we are anything else.

What are we doing while we are at work? Many of us are just wishing we were somewhere else. We spend all day looking at the clock, counting the minutes until we get to go home. We love our weekends, but at some point on Sunday night (or the equivalent for people working atypical schedules) our blood goes cold and we start dreading the unstoppable force that is Monday. There is nothing healthy about keeping our minds forever in the future, especially because it means that we never truly get the chance to enjoy the present. Why do we even go to work in the first place? There is a parable about a boy who got a job to save up some extra money, but he needed a car to get to work. He ended up spending all of the money from his hard work paying for a car that he only ever used to drive to work. This is an exaggerated situation for most of us, but at least a few of us fee like we’re in a situation with a zero net gain. We need to find a way to break the cycle.

Ultimately, we need to find a way to make our work meaningful in itself. Furthermore, we need to find a way to spend our money in a meaningful way. How we do this is going to vary from person to person, but I’ve found that it is important to value the people you work with. Have a real concern for their lives and cherish the opportunities to engage them in conversation. Try to have some pride for what you are doing. If you’re in sales, you’re going to have to do some predatory things quite often, but you can also help people with their concerns at other times. If you’re good at getting your sales numbers up, there’s no reason you can’t also be good at being good. Just because you are stuck somewhere doesn’t mean you can’t find joy.

How do you live in the moment while you are at work? If you’re currently “working for the weekend,” what can you do to enrich your workday? Do you feel like there is a spiritual side of work? How can we activate that sense of peace while at work? I am looking for real examples and practical suggestions to these questions, but I also think further philosophical discussion has its own value. Let’s have a conversation.

  1. Temporary Work

The history of American labor reached its pinnacle when basic rights were established for all full-time employees in the United States. This movement was hundreds, if not thousands of years in the making, finding inspiration in the sabbatical legislation of ancient Jewish scripture among other precedents, but it was ultimately defeated by the concept of the temporary employee. With temporary employees you don’t have to guarantee benefits, fair wages, or fair hours, and at the end of the day if you don’t like the cut of their jib you can just let them go. All of a sudden, we have a class conflict between real employees and a shadow group who come and go. Not only is there division among employees who are supposed to be working toward a common goal, but there is a massive leak in the wage delivery system. Temporary employees tend to get paid very little, despite their relatively high cost. Not only does the employer usually have to pay a temp service for providing on-call temporary labor, but each company that makes use of a temporary workforce loses massive amounts of money training employees who will not be around long enough to show a substantial return on investment. (This is not always the case: sometimes employers will just skip the training process and lose money due to inefficiency and error.)

Temporary employment is one of the biggest evils of America’s current economic situation. It devalues the people who make up our workforce while reinforcing economic shortsightedness. When you work in sales, they say that you are never actually selling a product or service; every sale requires you to sell yourself. When you run a business, your product is only as good as the culture of your factory, warehouse, showroom, or office. If you are not willing to invest in a long term workforce, then you are selling yourself short. We need to stop seeing these deeply ethical problems merely as statistics. I strongly believe that if we start with the human concern, the numbers will follow. You just have to have a desire to make it work in everyone’s favor rather than in the favor of the select few.

  1. Deferred Compensation

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While we are certainly going to cover many portions of this topic in later posts, it is worth taking a moment to talk about deferred compensation. By this, I mean additional benefits such as retirement savings, pensions, and stock options, things that you are generally going to enjoy not immediately, but later (hence deferred). During a discussion of regular pay wages, one has to wonder whether we might be better off simply getting a higher rate of pay than getting money that we cannot enjoy immediately. If we received higher wages instead, we would be more likely to qualify for mortgage and other loans and we could potentially pay debt down quicker. The downside is that we might have to pay higher tax rates on the extra money and we might spend all of the money instead of saving for retirement.

This section is clearly lacking. If you have any knowledge about the financial implications of deferred compensation, I could sure use your help. In fact, if you have any good links about this topic these would be helpful as well. As is, I have no reason to suggest that the current prevalence of deferred compensation needs to be changed, but it never hurts to raise the question. Let’s have a discussion.

  1. Small Businesses

If the situation with increasing our rate of pay is so problematic, why aren’t we all starting small businesses? I think there are plenty of excuses. Massive student loan debt keeps most young people from starting their own business, thus preventing economic stimulus and job growth. Health insurance also isn’t a walk in the park for small business owners. In many industries, there are further difficulties with competition. Many large businesses are able to avoid taxes altogether through loopholes for multinational corporations and lax enforcement of tax laws for too big to fail companies. Furthermore, many goods can be acquired online for cheaper because online goods are not always taxed the same as those bought at brick and mortar stores. If new business is such an important part of kick starting a struggling American economy, we have to wonder why so many things stand between intelligent, savvy, and driven young adults and job-creating businesses.

I know that many of you actually own a business. In your opinion is it better to start your own business or work for someone else? How are these things affected by debt, be it consumer, educational, or medical? Would you be better off in terms of health care if you worked for someone else? Is competition from larger corporations and online businesses a real threat to your business? We would all benefit from your input as business owners.

* * *

At the end of the day revenue alone is not enough. It is only through the combined forces of revenue and discipline that you will get anywhere financially. We will deal with both of these things in the upcoming months.

Just in writing this post, I have brainstormed quite a few options for future posts. Forthcoming are articles covering people’s experiences with small business and asking for raises, preparing for a promotion starting with day one (or earlier), some well-researched pieces on the living wage movement and deferred payments, and posts that expand the discussion into all of the other components of your average paycheck.

The Strike Debt Collective raises the question of what we owe and to whom, suggesting that our responsibility is, first and foremost, to one another, in our families, groups of friends, and our community. We may have different opinions about how to solve micro- and macro-economic issues, but we are in this struggle together. This means that we need to lean on one another, and the easiest way to do so is to engage in a constructive conversation. I value whatever you choose to contribute, so long as we can hold to a code of mutual respect. Let’s get this conversation started, people. I think we can really help one another.

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