This article dives into earnings data and how you can use it to revise salaries at your organization or re-think revenue in your solo practice/business.
We need more money, people.
There are about four ways you can get the resource called money needed to live in modern society — and all of them are distributed unequally.
- Unearned wealth – someone gifted you money
- Earned income from a job you work at someone else’s company where they sell to make the money
- Earned income from a job funded by foundations, aka indirectly getting unearned wealth someone else is sharing
- Earned income from a job that’s a business you run, where you have to sell, or get funded by grants/founations.
There’s a whole lot of power imbalances inherent in each of these – but the good news is, it doesn’t have to stay that way. For one, we can work individually (pay me!) and as decision-makers (pay my team!) to intentionally close pay gaps. That’s what this article dives into: data and all.
How much money should we be aiming to earn?
A 2010 Princeton study that found $75k a year is the annual income in the US needed to maximize for increased happiness – as in, earning more than that doesn’t significantly increase happiness, but earning less than that DOES significantly reduce emotional well-being. Why? Because you can afford basic and some non-basic things – a vacation, health insurance, some new things sometimes – all of which are quality of life items.
Since that’s from a 2010 study lets adjust for cost of living up to 2020, getting us to $90,596, (using the average inflation rate of 1.91% over the last decade).
Takeaway: the study suggests if you’re earning less than $90k in 2020, earning more will positively impact your life experience.
In 2019 Purdue ran another version of this study, “and found that the ideal income point for individuals is $95,000 for life satisfaction and $60,000 to $75,000 for emotional well-being.” Running the ol’ inflation calculator again, we get 2020 numbers: $99,600 is life satisfaction money here in capitalism, where you need money to get a lot of the things that make life non-brutal.
The takeaway: if you’re making less than $99,600 then earning more will help, as you probably know. Now you have a number in mind to aim for. But, how?
Now, here in reality…
$99.6k/year is dream money for some of you, old news for others – and way over the US median income. Pew estimates that household median is $74.6k – meaning half of households earn less than that.
MIT’s Living wage calculator set $68,808 for a family of 4 as the minimum to live on, and the NYCC set $58,450 as the official low-income bar in NYC.
So: if you’re earning under $58,450 in NYC you’d qualify for public housing, and if your household is earning under $68k you all probably don’t have enough money. Again, if this is you – this is not news.
But it’s the data you need in order to advocate for improved pay. I bring these numbers in because LOTS of people – especially working in retail, service, and nonprofits – make under the low-income bar and the idea of getting $99/k year seems like a joke. But why?
What if jobs just…paid more? What if it wasn’t the norm to pay under median for certain types of work — and what if we stopped accepting it or doing it?
It’s time to change, but how?
One approach: it’s time for you personally to earn more money. But, why individualize the problem? Logically, the more people we can get uplifted in any change, the bigger the impact. That’s why I advocate for you individually to get hella paid – and I’m advocating even harder for you to spread that across your organization or field.
It’s time to PAY more: as employers, as project staff budget planners, as grantwriters, as funders, as spenders.
The money is out there – yes, even in a pandemic-recession – but making it something each of us has to figure out on our own is inefficient and shortsighted, since more than half the people earn under $99k. It’s time to solve this, but let’s solve it on a bigger scale.
One thing to solve – equalizing pay. In some ways, this is “easier” — and how is outlined below.
One inequality tension we have – plenty of people, who have additional resources in the form of family money or a partner who’s well-paid, are willing and able to work for lower pay, which sets the bar low here in pay-what-themarket-will-bear-economy.
Put that up against people who’ve never made above median and who’s family’s generational poverty makes earning $99k (for example) seem like King’s Ransom, and you have a situation where the working-class people don’t know to ask for higher pay – and can’t understand why their middle class colleagues are able to thrive on the lower wages they are squeezed by.
ORGANIZATIONS, Let’s Get Funding:
CEOs and EDs – how many people on your payroll earn below median? Nonprofit Funders, do you know how many low-income people your portfolios are creating right now?
Get a list of
- The salaries you’re responsible for (if you’re a funder this might be a long list!) – an anonymized list with titles is ideal especially if you want to gather demographic data on gender, race/ethnicity,
- The median salary for the city(ies) these staff are in
- Math: identify the delta, if any, between the two
Now you have some baseline data from which to start to ask more informed questions and create change scenarios: what’s the average salaries for these titles, why is it all women of color earning lower salaries in your HR department, and what’s the cost differential to bring everyone to parity and what’s our funding plan here?
DEI teams and horizontal organizations, you can launch real conversations about economic justice and the different needs of people in your organizations, above the table. Because trust me, the staff from working class backgrounds are already talking about it. Socioeconomic differences are both pervasive and obvious. If you don’t see them, trust that someone who is or has been poor does.
Nonprofit Organizations and Boards, you have a special role to play in this. You can ask your funders to participate in deeper economic justice by funding equity-driven salary leveling.
Whether its from funders or earned income, the money is out there. Organizations, you have the tools. Staff, you have the labor power. Together it is possible to make workplaces more sustainable and just places to work.
SELF-EMPLOYED, Let’s Get Fundraising:
What do people in your network earn for doing the same work as you? Are you hella undercharging? Are you able to access giant gigs easily that you could tap others into?
What would it take for you to earn 99k – after expenses and accounting for self-employment tax – over the course of a year, without burning yourself the hell out?
My Pricing for Sustainability course goes DEEP on how to create a business model revenue plan that matches up to an income vision you create for yourself. But the short version of what you really need to do is imagine and then plan:
- Literally – what could you do or sell that adds up to the revenue number you identify above?
- Specifically – who does that, and can you ask them how?
- Tactically – what kind of business development or marketing would it take?
- Systems – are you set up with the accounts, support, tech, and payment processors to do this?
You might not be as obviously advocating for collective wage increase but there’s two ways you can expand the impact of this work:
- Team: If you have two other friends who you can team up with as you all do this, how can you help each other out?
- Tell: Tell others what you make and what you charge! (Coaches and consultants I am looking at you – put your pricing online, even if it’s a range). The people who don’t know what you charge aren’t just your confused clients, they are also people from marginalized backgrounds who don’t know to charge more because it’s literally never occurred to them. Share the knowledge and lift as you climb.
I hope to have given you enough information to get going yourself or with your org – and of course I also offer consulting with organizations and individuals if you want a thought and strategy partner in this work.
And: Pricing for Sustainability is $20 off here, if you want a program to guide you through re-thinking your revenue plans as a small business or in your solo practice.