We’re Never Getting Anything Besides Modest Raises

Whatever income bracket we find ourselves in when we start our careers is likely to be our income bracket for life.

I’m struck by a couple of things in The Atlantic’s recent story “Poor at 20, Poor for Life.” First, of course, the idea that many of us, at 20, were still in college—where we were influenced by our family background and income bracket as well as our own ability to get scholarships and part-time jobs, but where we hadn’t necessarily made the transition onto our own career path and its potentially stagnant earnings.

Poor at 20, Poor for Life

Because that’s the point of the story, and of the scholarly article it cites:

Those who make very little money in their first jobs will probably still be making very little decades later, and those who start off making middle-class wages have similarly limited paths. Only those who start out at the top are likely to continue making good money throughout their working lives.

So. Let’s discuss what this article might mean by “first jobs.” If we count my first post-college job, where I worked as a telemarketer for $9 an hour plus commission, my earnings have skyrocketed.

My Career As a Telemarketer Has Affected Every Job I’ve Had Since

If we start from my first full-time job with benefits, which I didn’t get until after I completed grad school, the graph shows a significantly smaller rise. (Actually, it’s more like a rise, then a dip when I transitioned into freelancing, then a rise again. I’m currently making more as a freelance writer than I did as an executive assistant/project manager, but not, like, gobs more.)

But the point stands: whatever income bracket we find ourselves in when we start our careers is likely to be our income bracket for life.

The Atlantic notes that this is a recent development, and the working paper they reference, “The decline in lifetime earnings mobility in the U.S.: Evidence from survey-linked administrative data,” agrees:

The decline in lifetime earnings mobility in the U.S.: Evidence from survey-linked administrative data – Equitable Growth

In contrast to much of the existing literature, we find that lifetime earnings mobility has declined since the early 1980s as inequality has increased. Declines in lifetime earnings mobility are largest for college-educated workers though mobility has declined for men and women and across the distribution of educational attainment.

Which makes me ask: what “existing literature” are these researchers reading? Because I have been sharing stories about this phenomenon for almost as long as I’ve been Billfolding:

• Millennials Should Be Highest Paid Adults In American History
• I Have 12 Years Left to Become Rich
• 2013 Median Household Income is 8 Percent Lower Than 2007 Income

As have Ester and Mike:

• Millennials Now Earning a Median-Wage Income at Age 30
• You’ve Come A Long Way, Baby, At Least Until You Turn 30

I feel like Team Billfold won’t be all that surprised at the idea that our income brackets or earnings deciles aren’t going to significantly change over time. Probably not even if we side hustle, although that might help with the day-to-day bills.

Are you expecting to move into a higher income bracket in the future? Or are you assuming things will stay pretty much as they are, with modest raises, for the rest of your working life?

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