The manager of a Knoxville retail business told me of a phrase being used by many of her young employees. Convinced they are worth more than the $12 an hour this business pays its new part-time workers, these twenty-somethings encourage each other to only “work your pay.”
How sad. This philosophy almost guarantees a person’s future earnings will be a function of inflation, thus reducing the likelihood of a real increase in standard of living.
The best and most predictable way to increase your pay is to produce more than you are currently being paid to produce. Make yourself more valuable to your employer. Talent and potential may land you a job, but actual output will determine the amount of money you earn over a career.
If a person decides that the only way to earn more money is to find a more generous or understanding employer, his pay will always be limited by others.
I like to look at social issues through the prism of competitive athletics, where winning is objective and rewarded – and mediocrity will keep you on the bench or cost you your job. In 1994, Peyton Manning started the season as Tennessee’s third or fourth team quarterback. Had Manning chosen to “work his pay” – that is, work no harder than a typical fourth teamer, there might be a bunch of 24-to-30-year-old Tennesseans today named after one of Manning’s teammates.
A distant 20-something year old relative of mine recently announced to her social media world the root cause of her life struggles: “Baby boomers who tricked us into obtaining $20,000 in student loan debt and then try to pay us only $15 an hour due to our entry level status – while charging $1,200 a month for an 875 square foot apartment.”
I didn’t realize it cost $20,000 to attend the University of Cosmetology, so I looked it up. The tuition for her 15 months of makeup classes was $17,000. That young lady has been failed in many ways but being paid $15 an hour is not one of them.
Charlie Munger, Warren Buffett’s long-time partner, advises that “to get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of undeserving people.” The word “deserve” derives from a Latin phrase meaning “to be worthy of due to good service.” It does not mean, “to be entitled to because you have a lot of expenses.”
Most of us have at least a subconscious idea of what we think we deserve. The only way to transform that idea into physical reality is by transforming the thought into productive actions – not Facebook posts.
David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.