 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.
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has since withdrawn this request.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.
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