You wouldn’t knowingly pour your life savings into an investment that was certain to lose value over time.
And if you noticed a stock was not appreciating for many years on end, you’d probably cash out and bet on another one.
Unfortunately, many people devote years of their lives to careers where their long-term earning power is on the wane—and stick with what they’re doing because of the sunk costs. The Payscale Index for 2014 found that real wages across industries are down nearly 8% since 2006—meaning that workers’ paychecks haven’t kept pace with the cost of living.
How much you earn isn’t the only thing that matters in a career but we all have to pay our bills. If you keep up on compensation trends, you can make them work in your favor in your career planning. For instance, it could be that wages for what you do are declining in general—but people who contribute skills like yours to a tech firm earn more. Here’s how to get a sense of what you’re likely to earn in coming years, so you can decide if you need to adjust your plans.
Look ahead five years. The Bureau of Labor Statistics’s Occupational Outlook Handbook looks at projected wages until 2020 in its profiles of many types of careers. Also check out the BLS’s lists of the fastest growing occupations –with information on what they pay– and the fastest growing industries . Make sure you read at least one trade publication in your industry, too. Many publish reports on salary trends that are more up-to-the moment than the government’s reports.
Study recent history. Very recent trends aren’t always a reliable indicator of the long-term picture for your career, but they can provide hints of what’s ahead. One of the best sources is the Payscale Index, which looks at which industries saw the biggest raises in the past 12 months. Payscale is a provider of compensation data. Payscale also offers a “What am I worth?” tool to see the pay range for a particular position. You can use it to gather information like the salary range for a particular company or for a certain job title in your city.
Consider your locale. No matter what you earn, your spending power depends on where you live. You may be able to give yourself what amounts to a raise, without actually getting one from your employer, by, for instance, moving to a different community with lower taxes once your kids are out of school–or transferring to another office of your company in a state with a lower cost of living. Sperling’s Best Places allows you to compare the cost of living in two cities so you can visualize the change in your expenses. You may be shocked by how much further you can stretch your paycheck if you move to lower-cost state.