Your lifetime earnings are probably determined in your 20s(washingtonpost.com)
washingtonpost.com
Your lifetime earnings are probably determined in your 20s
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/10/your-lifetime-earnings-are-probably-determined-in-your-twenties/
12 comments
I like your comment. We often forget that we're living in an echo chamber of our own peers.
We often get into debates with my group of friends about how bad we have it, how we're not charging enough, and basically decrying our very existence and how bad we've got it. Then somebody has a moment of clarity and is like "Guys, guys! We're complaining that we only make 2x minimum monthly wage of our environment PER WEEK."
That's usually followed by a moment of silence. Then it's right back to squabbling.
We often get into debates with my group of friends about how bad we have it, how we're not charging enough, and basically decrying our very existence and how bad we've got it. Then somebody has a moment of clarity and is like "Guys, guys! We're complaining that we only make 2x minimum monthly wage of our environment PER WEEK."
That's usually followed by a moment of silence. Then it's right back to squabbling.
That's the whole point in unit testing, agile methodologies and all the other processes - to make programmers like parts of a machine and easily replaceable. Having worked for one large investment bank, the work was really boring, and in my team hardly anyone lasted much more than a year. But they had the money to keep hiring and essentially throw more money at the problem.
Totally agree on your comment on agile. It is a blight on our profession. I was having beers with an old friend from undergrad yesterday - our career paths have taken us very different places. What's common is that both of our employers have been instituting agile in very dysfunctional forms. My friend and I are both in our 30s and we were jokingly thinking how long we can take this crap before we have to either move to management or change careers completely (unlikely since we love tech so much).
I would not put unit testing in the same camp - frankly, my employer doesn't care about unit testing at all - to my chagrin. Senior developers sneak in unit tests on the minutes of breathing room we get. I actually got a lecture on "company cares about customer visible features". Well .. you know what? Software that doesn't crash is a pretty darned customer visible feature.
What makes me very uncomfortable is that my current situation reminds me of what I saw on the news about the BP oil spill incident. Management asks very pointed and specific questions - engineers answer truthfully. Mgmt makes wild decisions based on half information. I fear this kind of crap is rampant in organizations not run by technical people. Is it any better at places run by technical people?
The fundamental problem plaguing our industry is perhaps not agile - that is a mere symptom of it. The core problem IMHO are treating people like cogs and the need to continuously move faster.
Rant over. I needed that. Off to sneak in some unit tests.
I would not put unit testing in the same camp - frankly, my employer doesn't care about unit testing at all - to my chagrin. Senior developers sneak in unit tests on the minutes of breathing room we get. I actually got a lecture on "company cares about customer visible features". Well .. you know what? Software that doesn't crash is a pretty darned customer visible feature.
What makes me very uncomfortable is that my current situation reminds me of what I saw on the news about the BP oil spill incident. Management asks very pointed and specific questions - engineers answer truthfully. Mgmt makes wild decisions based on half information. I fear this kind of crap is rampant in organizations not run by technical people. Is it any better at places run by technical people?
The fundamental problem plaguing our industry is perhaps not agile - that is a mere symptom of it. The core problem IMHO are treating people like cogs and the need to continuously move faster.
Rant over. I needed that. Off to sneak in some unit tests.
It looks like a lot of people in this thread are reading the headline and not the article. The article states:
>Workers in the 95th percentile can expect a 230 percent increase over the same period. Those in the 99th percentile -- the doctors and lawyers and engineers -- will see earnings grow a whopping 1,450 percent.
The "that isn't what happened to me", the outlier thing, that's the 95th to 99th percentile which includes engineers. And because that's for the 95%+, that's why the WaPo article says "probably" in the title.
>Workers in the 95th percentile can expect a 230 percent increase over the same period. Those in the 99th percentile -- the doctors and lawyers and engineers -- will see earnings grow a whopping 1,450 percent.
The "that isn't what happened to me", the outlier thing, that's the 95th to 99th percentile which includes engineers. And because that's for the 95%+, that's why the WaPo article says "probably" in the title.
+1
We're mostly not in the top 1% (I'm looking at you Calacanis) but we are the upper-ish 1% or at the very least, a very weird 1%
We're mostly not in the top 1% (I'm looking at you Calacanis) but we are the upper-ish 1% or at the very least, a very weird 1%
Not that many people understand what probabilities and statistics mean.
I started working as help desk at 23 for $28k a year.
I switched jobs to software development at 30 to go from $34k to 45k (note that I made a bigger jump at 30 than in all of my twenties.
I'm in the process of switching to a job that pays $115k, two years later.
Do I wish I'd done this a decade ago? Certainly. But if you're sitting there thinking "my twenties are over, I'm done," think again and go learn something new.
I switched jobs to software development at 30 to go from $34k to 45k (note that I made a bigger jump at 30 than in all of my twenties.
I'm in the process of switching to a job that pays $115k, two years later.
Do I wish I'd done this a decade ago? Certainly. But if you're sitting there thinking "my twenties are over, I'm done," think again and go learn something new.
Exactly. I now make more than double of the highest-grossing year from my 20's.
This article is just fear mongering. If you belong to the group of people reading comments on HN, you are able to drop in and out of the work force as you wish and do whatever you want with your life. If you want to maximize income in your 20's and reap the rewards of early investment, fine. If you want to travel the world now and jump in the game later, that's also fine.
This article is just fear mongering. If you belong to the group of people reading comments on HN, you are able to drop in and out of the work force as you wish and do whatever you want with your life. If you want to maximize income in your 20's and reap the rewards of early investment, fine. If you want to travel the world now and jump in the game later, that's also fine.
Why does everyone seem to assume all HN readers are smart, highly motivated and undoubtedly will be successful?
Correct, we all are in startups with 90% chance of failure ;)
More seriously, I laugh when former colleagues think of me as successful. It's correct that I've launched a successful product, but money is so random that I rather consider myself as "having fun and learning to launch a product" than "being successful".
More seriously, I laugh when former colleagues think of me as successful. It's correct that I've launched a successful product, but money is so random that I rather consider myself as "having fun and learning to launch a product" than "being successful".
I had a similar experience.
26-28: At a call center for $7.25 CAD per hour.
28-31: Part of a startup making $3,500/month.
31-34: Product dev at $70k.
35 now: Software dev making 98k.
Good leaps - do you find the pay only jumps if you move outside an organisation?
What are you doing in your new job, out of interest?
What are you doing in your new job, out of interest?
I did have to switch companies in both cases, yes. I'm just doing pretty standard full-stack work with a background in iOS and Ruby.
Thanks for replying. Very informative. I find it a shame to have to leave a company to get a pay increase.
And out of interest, where are you based?
I'll be relocating from a mid-size city to a larger one, likeky NYC. That does explain a bit of the pay difference, but even after cost of living it's still a nice doubling of take home (after 401k, etc.).
well , also a help desk. Tried to learn to code, failed so many times.
At first the 38% increase from 25-55 seems absurdly low for the average worker, but I have to remind myself what average is. I recruited for roles in areas where pay for a position starts at $12-15/hr, and don't go much above $20/hr. People get stuck in this range. Similary I've seen accountants stay around the $60k range in some areas throughout their career.
Wish they dug into deeper analysis instead of having fluffy explanation and conclusion. Interesting things to look into would be what makes average increase so low? What are the top 5% doing to get 230% growth, how about those 1% that get 1500% growth?
Wish they dug into deeper analysis instead of having fluffy explanation and conclusion. Interesting things to look into would be what makes average increase so low? What are the top 5% doing to get 230% growth, how about those 1% that get 1500% growth?
That's another good reason to start saving as early and as much as you can.
If you're interested in this topic, there's a good subreddit [0] with much information on how to start.
[0] https://www.reddit.com/r/financialindependence/
If you're interested in this topic, there's a good subreddit [0] with much information on how to start.
[0] https://www.reddit.com/r/financialindependence/
Or, it's a good reason to make sure you do everything you can to get in the top percentile careers, spending whatever resources you have to do that.
"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." Einstein.
That's why it's also so important to start saving early and invest it regularly.
That's why it's also so important to start saving early and invest it regularly.
Additionally, compound interest is why it's so important to not carry debt.
That mortgage your financial advisor wants you to keep? Get rid of it. Over pay principle as much as permitted.
Consumers refer to such things as 'debts' or 'payments', but financial institutions call these 'liabilities'. Financial institutions use the correct word, and don't like to hold them for good reason.
That mortgage your financial advisor wants you to keep? Get rid of it. Over pay principle as much as permitted.
Consumers refer to such things as 'debts' or 'payments', but financial institutions call these 'liabilities'. Financial institutions use the correct word, and don't like to hold them for good reason.
Weird that I was given the completely opposite advise by my bank about never paying off completely any debt straight away, to build up my credit rating ....
Precisely!
Financial institutions 'caring' about one's credit rating == confidence that one can handle the liabilities they want one to hold. :-)
Financial institutions 'caring' about one's credit rating == confidence that one can handle the liabilities they want one to hold. :-)
Yes, I think this is more important than your "earning potential". Even someone who starts out in the job market early in the 20s with a low salary has the potential to make it big, because you've got time on your side.
Tell that to the guys who made Jira.
But seriously, this is about as insightful as saying career choice affects lifetime earnings. Most people have settled their career by their early 30s. Throw kids into the mix and its no big surprise.
But seriously, this is about as insightful as saying career choice affects lifetime earnings. Most people have settled their career by their early 30s. Throw kids into the mix and its no big surprise.
> Throw kids into the mix and its no big surprise.
In my experience kids can have quite the opposite effect - I got a lot more ambitious when the first one arrived, and I've almost doubled my salary since then (a bit more than four years).
In my experience kids can have quite the opposite effect - I got a lot more ambitious when the first one arrived, and I've almost doubled my salary since then (a bit more than four years).
My experience has been the opposite. I've taken a job working remotely from home in part so that I can be a bigger part of my children's day to day lives. I would probably be earning around 130-150% of my current salary if I'd stayed in my previous consulting job.
I've actually made the same decision, it's a ~80% remote position. But I got lucky, I ended up becoming lead developer. Can't say I'm completely happy with my hours, but I couldn't imagine not being home most of the time with small kids.
Sure, but if I double my salary and my wife drops out of the workforce to be a full-time parent, on average our income stays the same :)
I'm doing that, but my soon-to-be wife makes less than I do and her career growth was very limited, so our average income will go way up, and I think my experience is more typical (most couples have some kind of income inequality, with the man usually making more).
For most people in the developed world that doesn't seem to usually be the case beyond the time the kids are very young though. At least here in Berlin it seems usual for kids to go to day care at the age of 1 year, at which point you can at least have 1 parent working full time and the other part time (or both full time).
It's relatively hard to get a daycare spot for under 1 year. We were lucky to have a daycare in our apartment complex (Southern Germany) which takes kids from three months and up.
In The Netherlands it's pretty normal to bring kids to daycare from 3 or 6 months.
In the end, there is often a salary hit though. My wife started working less. Also, there is no extra time anymore - on working days, we always go home at 17:00 sharp.
In The Netherlands it's pretty normal to bring kids to daycare from 3 or 6 months.
In the end, there is often a salary hit though. My wife started working less. Also, there is no extra time anymore - on working days, we always go home at 17:00 sharp.
Yes, that's why I wrote 1 year and not 3 months :)
That's still not that huge a portion of a typical ~40 years career (unless you have a lot of children - I think the average for western Europe is somewhere between 1 and 2 kids) and you'd get parental leave payments during that time.
So sure it probably hurts your combined income but I think it's very rarely a 50% reduction as suggested by OP saying he needs to double his salary to stay at the same level.
That's still not that huge a portion of a typical ~40 years career (unless you have a lot of children - I think the average for western Europe is somewhere between 1 and 2 kids) and you'd get parental leave payments during that time.
So sure it probably hurts your combined income but I think it's very rarely a 50% reduction as suggested by OP saying he needs to double his salary to stay at the same level.
Out here in SF it's no exaggeration to say full time day care runs $20k or more a year, so a single income X is probably worth considerably more than two incomes that sum to X (especially when X is high enough that tax credits for child care phase out).
The WaPo article wasn't about the Mad Men universe though.
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I don't think men and women would have equivalent salaries in the Mad Men universe.
In europe this is still very common.
Labour force participation rates by sex:
USA: 70.2% for men, 57.7% for women.
Europe (OECD countries): 79.7% for men, 62.6% for women.
So it's more common in EU for women to work than their sisters in the US, but the gender difference in participation rates is also higher in Europe.
Sources: http://www.bls.gov/emp/ep_table_303.htm and http://stats.oecd.org/Index.aspx?DatasetCode=LFS_SEXAGE_I_R
Sources: http://www.bls.gov/emp/ep_table_303.htm and http://stats.oecd.org/Index.aspx?DatasetCode=LFS_SEXAGE_I_R
Europe is a big place.
I think you need to modify this to "in some part of" or even in "many parts of".
Where I come from this is extremely uncommon.
Where I come from this is extremely uncommon.
ambition != taking risks . I bet you wouldn't take that much risk by switching careers for instance,because you have kids to feed.
Fair enough, I'm definitely taking less risks. But I'm also a lot more ambitious to improve as a programmer, and I ended up getting better jobs and moving up the ladder as a result of this. Taking risks is not exactly a sure fire route to success.
Really? My current career essentially started when I was 30 years old. Now I am 40 and --adjusted to local purchase power based on Numbeo-- I am making ten times as much compared to when I was 25. I do not think this article is true in the technology industry -- certainly doesn't apply to me
First of all, the OP says "probably", not "always". It sure does not apply to everyone, the claim is it's just a likelihood.
Secondly, you can say that career selection in your 20's impact your later earnings, even if the actual growth of earnings happens later. An indicative example is of course two persons, citizens A and B. Citizen A goes to work in manual labor after primary education. Citizen B goes to high school and then gets a university education. Citizen A may well be earning much more in his early 20's than citizen B.
Depending on how long the studies take, citizen B has earned little money by the time he/she is 25, while citizen A who went straight to work, say in construction, has been accumulating earnings for many years. Still, the future potential of earnings for citizen B has been built with the education, even if it is not visible in his/her annual earnings yet, and the only monetary thing to his name is some debt taken for studies.
Secondly, you can say that career selection in your 20's impact your later earnings, even if the actual growth of earnings happens later. An indicative example is of course two persons, citizens A and B. Citizen A goes to work in manual labor after primary education. Citizen B goes to high school and then gets a university education. Citizen A may well be earning much more in his early 20's than citizen B.
Depending on how long the studies take, citizen B has earned little money by the time he/she is 25, while citizen A who went straight to work, say in construction, has been accumulating earnings for many years. Still, the future potential of earnings for citizen B has been built with the education, even if it is not visible in his/her annual earnings yet, and the only monetary thing to his name is some debt taken for studies.
I think your point is similar to the fact that lottery winners are historically more likely to have won the lottery. Every person is a snowflake.
There is always variance and outliers. That it doesn't apply to you does not say much about the whole population.
(Nonetheless, it would be nice to have a break-up per sector.)
(Nonetheless, it would be nice to have a break-up per sector.)
> Those in the 99th percentile -- the doctors and lawyers and engineers -- will see earnings grow a whopping 1,450 percent.
But then the article seems to be in line with your own observation. The article says within the first 10 years of your career. That it, what happened to you. The difference is, that your personal career started in your 30's and not 25 as the article suggested.
Please write more about making a career change at 30 if you can. I'm heading to that age and have been trying to make a change but I am fearful that it's too late to start over in a new field.
I started working as a fulltime programmer (in Hungary) when I was 23 at market rate.
Today I'm 34 (still in Hungary), and my net salary has gone up 5.3x.
Another 2-3x is doable by handpicking a high-paying job here in Hungary (eg. an investment bank), another 2-3x if I were to go abroad.
For 10x and higher further multiplies I will have to try a startup again (my first one failed), although that's not a salary, it's equity.
I consider this high rate of increase a lucky thing: basically I chose to become a programmer at the right time when the industry is hot. I often remind myself that maybe in 30 years this will not be so, and maybe programmers then will be like chemical engineers today.
Today I'm 34 (still in Hungary), and my net salary has gone up 5.3x.
Another 2-3x is doable by handpicking a high-paying job here in Hungary (eg. an investment bank), another 2-3x if I were to go abroad.
For 10x and higher further multiplies I will have to try a startup again (my first one failed), although that's not a salary, it's equity.
I consider this high rate of increase a lucky thing: basically I chose to become a programmer at the right time when the industry is hot. I often remind myself that maybe in 30 years this will not be so, and maybe programmers then will be like chemical engineers today.
>"[...]and maybe programmers then will be like chemical engineers today."
Could you elaborate what you mean by "chemical engineers today"?
Could you elaborate what you mean by "chemical engineers today"?
I studied to be a chemical engineer at one point (with engineering physics, but ok).
Of the guys in my class, and wildly guessing, I would say that less than 50% work with something chemical related, mostly either in pulp, oil or fuel cells. A bit more than 50% work with something related to programming or computer modeling, and outside that a variety of odd jobs.
Of the guys in my class, and wildly guessing, I would say that less than 50% work with something chemical related, mostly either in pulp, oil or fuel cells. A bit more than 50% work with something related to programming or computer modeling, and outside that a variety of odd jobs.
Just to be clear, the data is from the US and based on US workers in the US labor market.
This is a tiny article with suspect conclusions. Link to the actual study, which doesn't really make the same narrow conclusion as the article. http://www.newyorkfed.org/research/staff_reports/sr710.pdf
This correlates with reports about the earnings of Phd's in fields like biology and the system of postdoc work.
Statistical law can't tell the truth of human life. The past does not mean everything,at least does not represent future.Anyone can change and alter the trajectory of his life only one in our study between.
Surprising they didn't even speculate that maybe labor market fluidity might be a bit higher than it used to be.
In short, if your comment on this can be summarized as "that isn't what happened to me", that's because you are an outlier.