How to Answer the Question "What Was Your Last Salary?"

When I was a kid working at Burger King, the minimum wage was $2.75 an hour. I didn't last long at that job. I got fired for calling in sick to go see the rock band Boston play at Madison Square Garden. Nonetheless, if the US Federal minimum wage had risen at the same rate as inflation, it would be over $20 an hour by now, instead of seven dollars and change.

What does that tell you? Real wages have dropped like a stone since I rocked out with my North Jersey homies in the nineteen-seventies. Annual salary increases at most large and medium-sized employers have plummeted or disappeared altogether. That means your best hope for keeping your income in line with the cost of living is to change jobs every now and then.

There's only one problem with that plan. When you apply for a job at a new company, their first question to you is likely to be "What were you earning at your last job?" The less you earned, the smaller your new job offer is going to be. Your past, unexciting wages will dog you forever!

If you were earning $52,000, your new job offer might come in at $53,500. If you earned two hundred and forty-five thousand dollars a year, expect a job offer around two-sixty. Notwithstanding the exacting pay grades, salary charts and ranges laid out by bureaucrats the world over, the strongest predictor of a new hire's starting salary is whatever he or she was earning at the last job.

That's discouraging - and pathetic! If an organization doesn't know how to value your talents other than by looking at what somebody else paid you in a completely different situation, they don't know squat about the talent market. How are you ever going to increase your earnings if every time you change jobs, you get a tiny raise over what they paid you at the last place?

Drinking toxic lemonade over the years, we've gotten used to the idea that the question "What were you earning before?" from a prospective employer is perfectly reasonable. It's not, of course. Your personal finances are your business.

When we call the plumber because our tub drain is clogged, we don't ask "What did you charge the guy down the block to unclog his drain last week?" If we do, the plumber is going to say "My rate is $95 an hour. Do you want me to come over, or not?"

Plumbers have avoided the weenification process the rest of us have subjected ourselves to. I'm generalizing, of course - I haven't met every plumber in the world - but my impression is that plumbers and other tradespeople are way ahead of the suit-and-tie crowd when it comes to saying what they think. They don't become mealy-mouthed and hesitant the way business people so often do when they really should speak up, on the job search or on the job.