Would I argue with the Federal Reserve

February 14, 2015 4:10 AM

Youe life time earnings and something you probably do not want to hear. People projected to earn the median amount will see their earnings grow 38 percent from the time they're 25 to when they turn 55; those in the 95th percentile will see their earnings grow 230 percent over the same period; and those in the 99th percentile will see their earnings grow 1,450 percent. That may seem obvious—those at the top of the wealth differential were probably propelled there by astronomical earnings growth, not a streak of flat earnings. The Fed report, however, points out that the steepest pay increases happen early. "Across the board, the bulk of earnings growth happens during the first decade," Fortunately for me mine took the upward swing after 23 years of employment. There is still hope.
posted by rmhsinc (26 comments total)

An interesting quote from the report abstract:

We also estimate impulse response functions of earnings shocks and find important asymmetries: Positive shocks to high-income individuals are quite transitory, whereas negative shocks are very persistent; the opposite is true for low-income individuals.

posted by XMLicious at 4:56 AM on February 14, 2015 [3 favorites]

I definitely peaked in income in my mid-forties but I'm still making a comfortable living so I'd feel shitty complaining too much.
posted by octothorpe at 5:35 AM on February 14, 2015

I peaked about three years ago, at age 50, but I started my career late: first real job at age 36, so I'm actually only about a decade and a half into my career.
posted by Mogur at 5:39 AM on February 14, 2015 [1 favorite]

I like a metric where having gone to grad school makes me look like a SUPER WINNER. I mean, I make like 7 times what I did when I was 25. I must be rich!
posted by ROU_Xenophobe at 6:10 AM on February 14, 2015 [11 favorites]

I peaked sometime in my early 30's, and was then laid-off. I didn't regain that peak until my late 40's, and was then laid-off again. My 50's have been a financial disaster. Looking forward, my 60's and beyond look like an apocalypse unless a miracle happens.
posted by Thorzdad at 6:13 AM on February 14, 2015 [4 favorites]

I married money and bought a hat. It was enough.
posted by Wolof at 6:16 AM on February 14, 2015 [5 favorites]

Well, I'm boned. Not having an actual full-time job and working several part-time deals really makes that first ten years pretty unimpressive.
posted by Les Socks Du Mal at 6:24 AM on February 14, 2015 [1 favorite]

I peaked in my mid-30s, but that was the dot com boom and my job was totally tied up in it, and ceased to exist in 2002 when the boom finally went bust. I still haven't got back to that income level - 2014 was my closest approach, and I have high hopes for 2015. Ironically I'm back in the Internet business too.
posted by COD at 6:50 AM on February 14, 2015 [1 favorite]

I could make more money if I worked for a start-up instead of the hospital system that I'm currently employed at but the extra pay only partially makes up for the long hours and crazy instability of working at a small company.
posted by octothorpe at 7:00 AM on February 14, 2015 [4 favorites]

I hope I haven't peaked, but my expectations are low and I am not planning on a lifetime of constantly rising income.
posted by Dip Flash at 7:19 AM on February 14, 2015

Thorzdad: Man, can I relate. Best of luck.
posted by Benny Andajetz at 9:06 AM on February 14, 2015

The Dot Com thing totally screwed with that. 2014 was the first time I topped 2000.
posted by wotsac at 9:37 AM on February 14, 2015

I couldn't find a reference to inflation or cost of living increases in that paper. Hmm.

Regardless, other than IT jobs, which seems to be significantly higher within MeFi than it is in the US as a whole, this doesn't seem all that surprising. For most professions, you would expect the biggest raises during the first 10-15 years on the job, while gaining experience and seniority.
posted by KGMoney at 9:57 AM on February 14, 2015

The thing about computer jobs is that everything changes constantly so you have to run as fast as you can just to stay in one place. Two years ago I was coding in Python, last year Ruby and this year AngularJS. The kid that I work next to is 22 and knows a heck of a lot more than I do about Javascript and is teaching me what I don't know. I get paid more than him since I was hired in a senior position and he's in an associate one but he's at least twice as productive as I am right now.

How many new languages/tools/frameworks am I going to have to learn in the next twenty years of my career just to stay employed?
posted by octothorpe at 11:05 AM on February 14, 2015 [1 favorite]

How many new languages/tools/frameworks am I going to have to learn in the next twenty years of my career just to stay employed?

I don't think this is universally ture. I've been doing Python and C (with a tiny bit of Java) for the entirety of my 10+ years at my current job, and I have plenty of friends who've been able to find stability. Of course you want to be learning new technologies and sometimes management will force you to go in a new direction, but changing languages every year just for the sake of doing so would be a warning sign to me as an employee that management has no idea what they're doing.
posted by tonycpsu at 11:20 AM on February 14, 2015 [2 favorites]

Yeah but if you stick with one technology, you run a big risk of waking up one day and realizing that no one wants to pay you to do that anymore.
posted by octothorpe at 11:27 AM on February 14, 2015

Of course, but there's also a risk that constantly churning from one technology stack to another puts you in a position where you're not good enough at any of them to differentiate yourself. To me, never being able to gain more than intermediate proficiency in any particular technology stack is just as much of a liability as being an expert in a declining technology. I think the cautionary tale of being a COBOL programmer in a world that only needs three of them isn't really relevant in a world where we can always jump online and within a few weeks of our spare time learn the ropes of whatever hot new tech is showing up as a requirement for open positions. To some extent, the job market can correct those mismatches a lot quicker than it could 20 years ago when you would have had to go back to school or try to get by with a long period of undirected self-study.
posted by tonycpsu at 11:37 AM on February 14, 2015

You're right, I don't want to hear this.
posted by cotton dress sock at 11:42 AM on February 14, 2015 [1 favorite]

I'm just going to keep changing careers until i get a good 10 year run at something.
posted by srboisvert at 11:50 AM on February 14, 2015

.com boomer, here, too. I think 1999 was my peak year, and I made more, written as a number without adjusting for "real dollars", in 1998 and 1999 than I have in any year since. 2014 was decent and the closest I've come, but in real dollars I bet it's still half what I made in '99.

The other thing that kills me is the things I got paid Big Bucks to do in '99 are like throw-away includes on the jobs I do now. Flat HTML websites consisting of a few pages earned me more than highly technical and complex front-and-back-end integrated custom apps. Le sigh.

The 2000s were brutal, from an earnings standpoint. I run my own business and skipped more than two years of "personal" paychecks in that time, getting "paid" by Visa and Mastercard instead.
posted by maxwelton at 12:44 PM on February 14, 2015

This is not a fun read for someone who has spent her late 20s-mid 30s finishing college and in grad school. I'll just be weeping softly over here.
posted by apricot at 1:39 PM on February 14, 2015

This is not a fun read for someone who has spent her late 20s-mid 30s finishing college and in grad school. I'll just be weeping softly over here.

There's no way I'm bothering to read this paper, but I'd guess that the peak is later for people with more education.
posted by madcaptenor at 2:00 PM on February 14, 2015

I couldn't find a reference to inflation or cost of living increases in that paper. Hmm.

From the paper:

We convert nominal earnings records into real values using the personal consumption expenditure (PCE) deflator, taking 2005 as the base year.

posted by kithrater at 6:50 PM on February 14, 2015

Some further thoughts:

This is only measuring changes in growth in male earnings:

we focus on the earnings dynamics of men so as to abstract away from the complexities of the female nonparticipation decision. We intend to undertake a similar study that focuses on the earnings dynamics of women

The framing of the Bloomberg report is a little off; it's not your first ten years in a career that most men see the most positive growth in their earnings, but from the ages 25 to 35.

I'd guess that the peak is later for people with more education

The paper doesn't take education into account at all; I don't think the data set they used (the SSA MEF) has it.

And some final conclusions of the paper:

low-income individuals experience very large earnings shocks with low persistence, whereas high-income individuals experience shocks that are very persistent but with much lower volatility... positive shocks to high-earnings individuals are quite transitory, whereas negative shocks are very persistent; the opposite is true for low-earnings individuals

posted by kithrater at 7:13 PM on February 14, 2015

I quadrupled my income in my first twenty years working, and then switched careers to work for local charities in my community. I'm a lot happier earning what I started out with than at any other point in that twenty years. It's not all about what you earn.
posted by walrus at 12:47 AM on February 15, 2015 [1 favorite]

I started working for a brokerage firm 36 years ago. I later did the dotcom startup thing, spent six unemployed months with one child and another on the way, worked for both large and small companies and moved into software sales 11 years ago. The peak in my earnings (so far) was 3 years ago, and was about 3000% of my average earnings during the 1980s. Don't let the statistical averages get you down. They don't apply to you as an individual.
posted by JParker at 2:19 PM on February 16, 2015 [1 favorite]