How to tell you're underpaid — & what to do about it

by Myles Ma
How to tell you're underpaid — & what to do about it

The average U.S. employee is underpaid by $7,528, based on data from job site Glassdoor. The data suggest most people could be making more.

Many people fail to negotiate when they start at jobs, said Rita Friedman, certified career coach. If you're unemployed or unhappy in your current job, you may be willing to take less than you deserve if a new job comes along, she said.

That could cost you more and more over time. Here's how to find out if you're underpaid and what to do about it.

What are the signs?

One way to tell you're underpaid is if your company is hiring for the same or a lower position, Friedman said. If the posted salary range is higher than or similar to yours, that's a sign you're underpaid. Also look out for the salary range for your position in job postings at other companies.

Websites like Glassdoor and Payscale can also allow you to compare your salary, Friedman said. The Bureau of Labor Statistics provides employment and wage estimates for more than 800 occupations down to individual metropolitan areas.

Trust your gut as well, Friedman said. If you've taken on more responsibility or more hours without a pay increase, you're effectively lowering your salary.

Also look at your local job market, Friedman said. Is it competitive?

"Could you go out and get a better-paying job?" Friedman said.

If so, you might be underpaid.

How do we fall behind?

If you start out underpaid, you're likely to stay underpaid, Friedman said. Once a company is used to paying you 75% of what you're worth and you've been working for that money for a while, it can be hard to ask for more.

"It's a really weak way of bargaining," Friedman said.

Sometimes your job grows more than your salary, Friedman said. You may get a bigger title instead of a bigger paycheck. In smaller workplaces, a coworker may leave and everyone may end up taking on their duties without additional pay.

Many states and cities have banned employers from asking for salary history. The question can exacerbate pay shortfalls. If someone is underpaid and their next employer bases their salary on their pay history, they'll continue to be underpaid, Friedman said.

What can you do about it?

When you realize you're underpaid, it can take many conversations to address it, Friedman said. Companies often only review salaries at certain times of the year, so you may have to wait for a raise.

Once you realize you want to address your pay, plan for it, Friedman said. Talk to your boss and schedule a conversation. If you're told a raise isn't possible right away, be prepared to push back.

Ask when it is possible and make clear you expect an answer, Friedman said. Go into the conversation with more than a preferred salary in mind. Give examples of why you're worth it.

"If you created a new process, if you do things like serve as a backup or train people or take on extra responsibilities, those might be worth highlighting," Friedman said.

It can be easy for bosses to forget how much you're doing, so remind them, Friedman said.

It's important to know your worth, said Vicki Salemi, career expert for Monster, an employment website. Aside from the websites mentioned earlier, network with former colleagues and fellow members of any professional organizations you may be a part of to get a salary range for your position based on experience and region. Bring the evidence to your boss.

"Present your case with facts to back it up, and pause," Salemi said. "Observe your boss' body language."

See what they say and do, Salemi said. If they say their hands are tied, it may be time to gear up a job search. If they say they'll get back to you, make sure to follow up.

Depending on the size of the company, you may have to wait, Salemi said.

"Set your expectations that if it actually does happen, it can take a while," Salemi said.

Use the time to look for other jobs. Even if you love your job, if you find yourself having to fight for your pay often, it may be time to leave, Salemi said.

What if you get turned down?

Getting another job is often the best way to get a raise, so leaving can sometimes be a good choice even your company agrees to a salary increase, Salemi said. The Federal Reserve Bank of Atlanta tracks wage growth and "job switchers" generally outperform "job stayers." That difference can add up if you stay at a job long enough.


"It's a cycle we get caught in if we're not keeping our eyes and ears open externally to see what our opportunities are," Salemi said.

How do you keep from getting underpaid?

Just as you should keep your eyes open for new opportunities, you should also keep track of your worth, Salemi said. Put a reminder on your calendar to update your resume every few months to add any new skills that may make you more valuable. Know the going rate for your position, whether you're a freelancer or a full-timer, so you know what to ask for in your next negotiation.

When you're starting a new job, you may want to ask to review your salary after six months instead of a year to address any pay issues as soon as possible, Friedman said.

Make sure you actually negotiate. Men are much more likely to negotiate their salary than women, Salemi said, which may play a role in the gender pay gap. Don't let yourself fall behind.

Ready to quit? Before moving on, follow these eight steps.

Image: djiledesign