8 Reasons to Ask for a Raise
Not that long ago, I was flying home from a speaking engagement next to a woman who was diligently preparing what appeared to be a financial analysis. As the plane was rolling down the runway, she snapped her computer shut and looked over to smile at me.
“Looming deadline?” I asked.
She shook her head and said, “There’s always a deadline.”
We chatted amiably for a few minutes before I began asking the kind of questions I always ask of women on the road. What they do for a living, whether they enjoy their work, and when they last asked for a raise.
“I’m pregnant,” she said, “so I didn’t ask for a raise this year. I won’t even be getting a bonus because I’m taking the last two months of the year off.”
I suggested that she ought to be getting 80% of her bonus since she will have worked 80% of the year, at which point she said she’d be lowering her ambitions for quite some time what with the baby and all. She thought she wouldn’t be able to develop business the way her colleagues were. She was so certain of this that she’d given a younger male colleague the credit for business she’d developed that year—a two million dollar account.
I wish this story were uncommon. Unfortunately, I’ve talked to hundreds of high performers who accept far less than they are due for a myriad of reasons, some because they’re planning on starting a family soon and others because they took one or two years off when they first had children. Others don’t seek a raise or counter a low-ball first compensation offer because they’re afraid the offer will be withdrawn or that they’ll be punished in some other way simply because they ask to be paid their true market value.
To encourage women like my accidental traveling companion to ask for the compensation to which they’re entitled, I give you eight facts that should scare you into asking for a raise.
1. Whatever You’re Earning in Your 40s Is the Most You’ll Likely Ever Earn
According to a study conducted by Payscale.com, college-educated men’s earnings peak at 48, while women’s stall at 39, nearly 10 years earlier. (No wonder there’s a staggering pay gap at the top of the pay scale!). So, if you’re thinking that you’ll negotiate “next time,” when you’re that much more experienced, don’t put it off any longer. You don’t have that much time.
2. Repaying Your Student Loans Will Probably Take a While
The standard repayment plan for federal student loans puts borrowers on a 10-year track to pay off their debt, but research has shown average bachelor's degree holders take 21 years to pay off their loans. That means, even if you’re single and living with roommates now, you’ll still be paying these off at the same time you’re saving the down payment for a house, socking money away for your children’s education, and (ideally) putting additional sums into your 401K or IRA to start preparing for retirement.
3. If You Want to Send Your (Eventual) Kid to College, You Need to Save $425 Every Month
According to the “World’s Simplest College Cost Calculator,” if you plan on sending your kid to a public college for four years, you need to start saving at least $425 a month from the day she’s born to the moment you drop her off at her new home on campus. And that’s according to a March 2016 figure. If your child isn’t even a figment in your imagination yet, that number’s likely to go up even more.
4. Single Motherhood for College-Educated Women Over 35 Is Increasing
Although divorce among married college graduates has been in decline for sometime, so has marriage. Recently, only one group of unmarried women have seen their birthrates increase—those 35 and over. Whether those women were divorced before their first (or second!) child or were never married, they will likely be the sole wage earners for most or all of their children’s lives.
5. The Wage Gap Will Likely Widen as Millennial Women Age
There’s both good and bad news for women between the ages of 25 to 34. A 2015 Pew Research survey shows their hourly earnings were 93% of their male peers. Whether women will be able to keep pace, however, may depend largely on them. Previous generations of women have fallen behind their male counterparts as they have aged and dealt with the responsibilities of parenthood and family.
6. Women Slide Into Poverty During Their Retirement Years
Women who are over 65 today are nearly twice as likely to live below the poverty line. As CNN recently reported, women over 65 are living on an income of $16,000 per year while their male counterparts have $11,000 more to spend on necessities every year. And at that annual income, it’s all necessities. This is unsurprising for today’s female retirees given the size of the pay gap during their lifetimes, but absent constant vigilance, the smaller millennial pay gap can easily increase over time. If you earn less now, reach your peak earnings at 39, and live 20 to 30 years post-retirement, much of your “golden years” will be spent simply struggling to survive.
7. You’re Leaving Half a Million Dollars on the Table
A couple of researchers recently cautioned job seekers not to leave money on the table. In Who Asks and Who Receives in Salary Negotiation they found that employees who negotiated their compensation increased their annual pay an average of $5,000. They warned that if a 25-year-old who fails to negotiate a starting salary of $55,000 instead of the $50,000 on the table, over a 40-year career, that individual will lose more than half a million dollars. That’s $634,000 to be exact.
8. There’s Little to No Risk in Asking
This has likely been eye-opening enough for you, so let’s end with a not-so-scary fact: The VP of Human Resources for CareerBuilder says that nearly half of all employers surveyed said they had more money than initially offered, but 49% of all job candidates—male and female—simply didn’t ask for it. And there goes your last excuse for not asking for more.
6. Women Slide Into Poverty During Their Retirement Years
Women who are over 65 today are nearly twice as likely to live below the poverty line. As CNN recently reported, women over 65 are living on an income of $16,000 per year while their male counterparts have $11,000 more to spend on necessities every year. And at that annual income, it’s all necessities. This is unsurprising for today’s female retirees given the size of the pay gap during their lifetimes, but absent constant vigilance, the smaller millennial pay gap can easily increase over time. If you earn less now, reach your peak earnings at 39, and live 20 to 30 years post-retirement, much of your “golden years” will be spent simply struggling to survive.
7. You’re Leaving Half a Million Dollars on the Table
A couple of researchers recently cautioned job seekers not to leave money on the table. In Who Asks and Who Receives in Salary Negotiation they found that employees who negotiated their compensation increased their annual pay an average of $5,000. They warned that if a 25-year-old who fails to negotiate a starting salary of $55,000 instead of the $50,000 on the table, over a 40-year career, that individual will lose more than half a million dollars. That’s $634,000 to be exact.
8. There’s Little to No Risk in Asking
This has likely been eye-opening enough for you, so let’s end with a not-so-scary fact: The VP of Human Resources for CareerBuilder says that nearly half of all employers surveyed said they had more money than initially offered, but 49% of all job candidates—male and female—simply didn’t ask for it. And there goes your last excuse for not asking for more.