Knowing Your Market Value

Your market value is not what you earn now. It is what an employer or client would pay today for the problems you can solve. The gap between those two numbers is invisible on any pay stub, and it tends to widen quietly: people who stay in one role get raises measured against their old salary, while the market for their skills moves on without them. This chapter shows how to measure your market value from evidence rather than feeling, what pushes it up or down, how to compare offers on total compensation rather than base pay, and the basic structure of asking for more.

Where real pay data comes from

No single source is complete. Use several and look for where they agree.

Government wage statistics. The Bureau of Labor Statistics' Occupational Employment and Wage Statistics program publishes pay for hundreds of occupations by state and metro area, at the 10th, 25th, 50th, 75th and 90th percentiles. It is based on a large survey of employers, not self-reports, which makes it the most reliable starting point. Its limits: it lags by about a year, and an occupation title can lump together very different jobs.

Posted salary ranges. A growing number of states and cities, including Colorado, California, Washington and New York, require employers to include a pay range in job postings. Even if you do not live in one of them, postings for remote roles often show ranges. Collect ten or more for jobs that match yours and note the midpoints.

Salary sites. Crowd-sourced databases are useful for company-specific pay and for fields where equity is a large part of compensation. They are self-reported, so treat any single figure with caution and give more weight to entries with many reports.

People. Recruiters see what companies actually pay and will often share a range if asked directly. Colleagues at similar levels may be willing to say whether a number sounds low, high or about right, even if they will not share their own pay.

Offers. The most accurate data point is what someone will actually pay you. Interviewing occasionally, even when you are content, keeps that data current.

Write every data point down with its date and source. A list of twenty dated figures is far more persuasive, to you and to a manager, than a vague sense of being underpaid.

What moves your number

The same work can pay very differently depending on where it is done.

• Location. Pay differs widely between metro areas, and the BLS data shows it for your occupation. Remote work has blurred this, but many employers still adjust pay to where you live.
• Industry. The same occupation often pays more in some industries than others; the BLS publishes wages by industry as well as by occupation, so you can check yours.
• Employer size and stage. Large companies often pay more in cash and benefits; young companies may offer less cash and more equity, which is worth something only if the company succeeds.
• Scarce skills. Skills that few people have and many employers need carry a premium. Chapter 5 covers how to build them.
• Experience and scope. Pay rises with responsibility more than with years. Managing people, budgets or larger clients usually moves you up faster than time in seat.

Compare offers on total compensation

Base salary is the easiest number to compare and often not the most important. Total compensation includes the employer's retirement contributions, health coverage costs, bonuses, equity, paid time off, and anything else of value. The BLS survey of employer costs puts benefits at roughly 30% of what private employers spend on compensation, so ignoring them can lead to the wrong choice.

Here are two offers to the same single filer. Offer A pays a base of $92,000 with a 2% employer match. Offer B pays $88,000 with a 5% match.

Offer A's extra base pay is taxed in the 22.0% bracket and carries 7.65% payroll tax, so its federal income tax is $11,410 against $10,530 for Offer B, and only about seven-tenths of the difference in base reaches your account. Offer B's extra 3% of pay goes into your 401(k) untaxed, about $220 a month.

Invested for 30 years at a steady 7.0%, the extra match could grow to about $257,280. Offer A puts more cash in your pocket now; Offer B builds more wealth if you stay long enough to vest and would not have saved the cash yourself. Which is better depends on vesting, on how long you expect to stay, and on what each employer charges for health coverage. The point is to compare the whole package. The real hourly wage calculator adds another lens: what each job pays per hour once commuting and work costs are counted.

The basic shape of asking for more

Negotiation has its own volume on this shelf (Volume 2), but the core is simple enough to use now.

Prepare evidence, not grievances. Your case is the market data you collected and a short list of results you delivered, in numbers where possible: revenue influenced, costs cut, time saved, problems fixed. "I deserve more" is a feeling; "similar roles in this metro pay between these two figures, and here is what I delivered this year" is a case.

Name a specific number. Research on negotiation has found that first offers act as anchors: the opening number pulls the final result toward it. A specific, well-supported figure near the top of the market range tends to do better than a vague request for "a bit more".

Then stop talking. Let the other side respond. Filling silence with justifications usually means negotiating against yourself.

If the answer on base pay is no, ask about the rest. A signing bonus, a higher bonus target, extra paid time off, a title change, a training budget, remote work, or a written date for the next pay review can all be easier for an employer to give than base salary.

Keep the relationship. You will probably work with this person after the conversation. Being clear, courteous and specific serves you better than pressure.