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Strategies for increasing your pay

Are you too intimidated to ask your employer for a big raise? Maybe you prefer to grouse about income disparities. In fact, there's a widespread perception that the rich get richer while the poor get poorer, according to a Harris Interactive poll released in early December. Three-quarters of Americans feel this way, up from 68 percent in 2004.

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Unfortunately, these perceptions are largely correct. Earlier this year, the Census Bureau released some statistics that attest to huge income disparities between the rich and the poor.

Let's start with the middle: Median household income, at $44,389 in 2004, was flat for the fifth consecutive year.

At the low end of the income scale, some 1.1 million more people hit the poverty skids last year, for a total tally of 37 million poor Americans. Meanwhile, slightly more than 50 percent of the income generated in the United States last year went to the wealthiest 20 percent of U.S. households.

Another survey released in late September revealed that the number of millionaires in the United States had increased 8 percent, to 8.9 million Americans, as of last May. The study concludes that the new millionaires didn't get rich from recent stock market gains or from the increased value of their primary residences, which were excluded from the net worth calculation. Rather, it was simply the result of long-term wealth accumulation.

Disparities not rare
Those who pay attention to business news regularly read about disparities between the rich and the poor. Here's how it works: Many top-level corporate management officials, who make the rules, get the gravy, while the average working stiff, who follows the rules, gets the breadcrumbs.

Case in point: At Delphi Corp., the troubled auto-parts firm that has recently filed bankruptcy, union workers were asked to take 50- percent-plus pay cuts, from $27 an hour on average to $12.50 an hour, according to the Wall Street Journal. Management has since withdrawn this request.

Meanwhile, the company planned to give its senior management more than $500 million in cash and bonuses so that they wouldn't leave during the bankruptcy process. "Obscene" was the word the United Auto Workers president used to describe these plans.

It should be noted that Delphi Corp. owes its pension plan a $400 million payment in January, according to the Pension Benefit Guaranty Corp., which also opposes the big bonus plan for the company's top executives.

Time to strategize
We can bellyache about outrageous disparities, or we can accept that such unfairness is beyond our control. Let's instead focus on the things that are within our control and strategize on how to augment our own incomes.

We are approaching the time of year when many companies traditionally do their annual performance reviews. Let's take time to prepare by assembling the data we need to make a strong case as to why we deserve a big raise.

Some managers will describe the structure of their salary budgets as a zero-sum game, meaning that a higher raise for one person results in a lower raise for another. To a certain extent that may be true, but often these budgets can be expanded if a midlevel manager requests more money from higher ups. In other words, sometimes there's some flexibility here.

 
 
Next: What have you done for yourself lately?
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