foreword: this is not a statement of political or moral judgment. Just musings.
Part of the parcel of a dynamic competition based job market is that people get as much as possible of the total that others are willing to pay for their work. At present this means rapidly improving wages for certain categories of tech jobs where employees are scarce.
There are lots of ways this can go right or wrong. Here is a middle of the road story:
A family member of mine was a programmer in the mid 80s. By the 90s he had moved into management in a big enterprise software company. By mid 00s he was managing very big clients/projects that were billing for big software and thousands of engineering hours. The last time he had really programmed for a living, it was in COBOL and even then the tech was dated and very specialized.
At some point the clients he was working on went onto a different model handled by a different division of the company in a different country. He was offered a relocation, but it did not appeal. He had kids in high school, etc. About 50 years old.
He had made good money for years but not rockstar money. He owned a valuable house and had savings and investments so he could last a year or two unemployed. His first next job was at a startup-like thing that petered out. Then a long period trying to make his way freelancing and applying for jobs paying far less than his last. Now he runs a business. I still imagine it's far from his peek salary, but it's definitely not a bad income by general standards. It can just be tricky adjusting especially if you had to use savings to bridge for a few years.
There are all sorts of ways of looking at this. For me the lesson I got from it is that we have a strange assumption: your salary will go up over time and peek near retirement. Realistically one person might earn more in total by the age of 45 than his neighbor earns by 65, even in after tax earnings. I imaging you can find those neighbors in almost any street.
The richer neighbor could theoretically retire at 45 at the same retirement income the other would have at 65. On paper it might be easier even though the richer younger neighbor has longer to live of his retirement savings. He also had 20 year to spend out of his lifetime earnings so there would be more in the piggy bank if they lived the same lifestyle. At 45 it's a lot easier to supplement your retirement income and medical expenses are lower. Obviously this rarely happens.
Wealth is in a very real way relative to standards you consider normal. Part of that normality standard is an expectation for rising income throughout your life.
Part of the parcel of a dynamic competition based job market is that people get as much as possible of the total that others are willing to pay for their work. At present this means rapidly improving wages for certain categories of tech jobs where employees are scarce.
There are lots of ways this can go right or wrong. Here is a middle of the road story:
A family member of mine was a programmer in the mid 80s. By the 90s he had moved into management in a big enterprise software company. By mid 00s he was managing very big clients/projects that were billing for big software and thousands of engineering hours. The last time he had really programmed for a living, it was in COBOL and even then the tech was dated and very specialized.
At some point the clients he was working on went onto a different model handled by a different division of the company in a different country. He was offered a relocation, but it did not appeal. He had kids in high school, etc. About 50 years old.
He had made good money for years but not rockstar money. He owned a valuable house and had savings and investments so he could last a year or two unemployed. His first next job was at a startup-like thing that petered out. Then a long period trying to make his way freelancing and applying for jobs paying far less than his last. Now he runs a business. I still imagine it's far from his peek salary, but it's definitely not a bad income by general standards. It can just be tricky adjusting especially if you had to use savings to bridge for a few years.
There are all sorts of ways of looking at this. For me the lesson I got from it is that we have a strange assumption: your salary will go up over time and peek near retirement. Realistically one person might earn more in total by the age of 45 than his neighbor earns by 65, even in after tax earnings. I imaging you can find those neighbors in almost any street.
The richer neighbor could theoretically retire at 45 at the same retirement income the other would have at 65. On paper it might be easier even though the richer younger neighbor has longer to live of his retirement savings. He also had 20 year to spend out of his lifetime earnings so there would be more in the piggy bank if they lived the same lifestyle. At 45 it's a lot easier to supplement your retirement income and medical expenses are lower. Obviously this rarely happens.
Wealth is in a very real way relative to standards you consider normal. Part of that normality standard is an expectation for rising income throughout your life.