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The data say, Demand bigger salaries!

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Question I'm about to get a job offer from a company I want to work for. They asked how much I want. The talent shortage must be producing bigger salaries in job offers, so I'm inclined to ask for the top of the range I've researched. But I'm also nervous about going too high and turning them off. Is there a safe middle ground? Nick’s Reply Like you, I like the middle ground. Most of the time. But this isn't most of the time. In fact, I believe we're living in a time when there's good reason to take bigger

Join us for discussion! The data say, Demand bigger salaries!

                              

Question

I'm about to get a job offer from a company I want to work for. They asked how much I want. The talent shortage must be producing bigger salaries in job offers, so I'm inclined to ask for the top of the range I've researched. But I'm also nervous about going too high and turning them off. Is there a safe middle ground?

Nick’s Reply

Like you, I like the middle ground. Most of the time. But this isn't most of the time. In fact, I believe we're living in a time when there's good reason to take bigger risks to get bigger rewards.

Why? Because on the whole, companies are pulling down unusually higher profits hand over fist. They can afford to pay you more. There's data to prove it.

Days of bigger salaries

This is the time to ask for more, even to demand it and gently signal that you will walk away from that hard-to-fill job if they don't meet your salary requirement.

Savvy investors tell us that the big gains are made when we encounter unusual circumstances in which our chances of a big win are somewhat higher than normal. That can make it worth the attendant risk. Of course, only you can decide how much risk you will tolerate.

I would ask for more money. I'd ask for the top of the range or more. Now let's discuss why job applicants should demand bigger salaries today.

Employers need to hire

I don't need to link you to 10 articles about employers crying they can't fill jobs because of "the talent shortage." And I don't need to give you an Economics 101 lesson in supply and demand. (Ah, what the heck! When supply of labor is down, wages go up.)

If so many employers are desperate to hire, they must be paying top dollar to get workers like you on board, right? Wharton labor researcher Peter Cappelli suggests that, on the whole, they're not.

What do you mean, real wages are down?

In an October 2021 report Cappelli writes that "Wages are not rising dramatically, at least on average. A shortfall between a big demand jump and a modest increase in supply should not necessarily cause a shortage in a market economy. It should cause prices — in this case, wages — to rise."

But despite their posturing about recruiting aggressively to fill those vacant jobs, Cappelli notes employers are not offering competitive market pay. In fact, he says, no matter what anecdotal stories the media broadcast, the data tell us "Real wages have fallen by the largest amount in decades."

And that's why you should ask for higher pay. In fact, if you don't demand a higher job offer, you may be getting lower real pay than you even realize.

Inflation is hurting workers

Cappelli continues: "The idea that wages are rising dramatically just isn't true...