It is better to front-load.
In this Daily Finance column from 9/25/09, Lisa Kahn, assistant professor of economics at Yale SOM says that people starting their careers in a recession get behind on earnings over a period of up to 20 years compared with people starting their careers in boom times. This isn't really new information. Any time you start off with a smaller number, you limit the growth of your salary over time, which is why the standard advice is to negotiate your salary as high as possible from the very beginning. It's like thinking about compound interest and your nest egg. The more you start with (and the earlier you start), the more you get in the end, exponentially. (Then the question is - to what end?)
The fear factor.
She goes on to point out that fear in recessionary times makes people stay in their jobs longer than they normally would. The problem? "[People] change jobs less often, and when you are young you are supposed to change jobs more often," says Kahn. "You need to find the right fit for you, and that's often how people increase their salaries."
Oh the things I was not taught...
By the way, when the Bureau of Labor Statistics includes "people who are not working full time but would like to be" and the number of unemployed people in the US jumps to 16.8%. That starts to explain all the people in the grocery store at 11 am.
Take away.
The advice the professor gives for people trying to start a career in a recession:
- go back to school if you can
- always be thinking "should I move on?"
- don't be afraid, don't settle for something that doesn't work for you.
- don't accept the status quo.
OK.
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