Your earning power refers to your ability to make money in exchange for work. And it isn’t strange to wonder if you are worth more than the figure on your current paychecks or, if you are a freelancer, what you charge for your services. According to policyadvise.net, the average annual salary is $51,480, making the median monthly salary $4,290. Many factors account for a person’s earning power, including the following.
Ill health and injury
According to statistics, ill health and injuries account for several unemployment cases in the country. Only last year, the disability unemployment rate was pegged at 10.1%. However, in 2022, experts believe that the percentage will shoot to at least 15% by the year’s close. Your health can largely influence your earning power if you’re fortunate to still be in employment. And a 2021 labor force report indicated that workplace injuries account for 30% of all unemployed disability cases.
Car accident cases, in particular, significantly increase victims’ inability to continue working. As unfair as this sounds, employers consider all these before offering a job. Even if you suffered ill health or injuries after employment, continuity might be questioned. Depending on your injury circumstances, you may be entitled to receive compensation. Unfortunately, if injuries are debilitating, they could affect your future earning potential, so keep this in mind.
Macroeconomics is a major determinant of earning potential in the employment space. Earnings are higher when economic indicators like inflation and interest rates are stable. On the contrary, when these indicators are disturbingly off the charts, it is not surprising for income to take a dip. Indeed, economic trends are uncontrollable, and so is the job market. Therefore, when you apply for a job in a shaky economy, remuneration may not be as you expected. If you’ve observed the job market recently, you will notice a shift in roles. Careers that didn’t fetch much about two decades ago are doing the exact opposite today.
Years of experience
Sometimes, when you find yourself on the lower end of the pay scale, it may be due to this reason. More often than not, a person with many years of work experience earns more than someone without it. Usually, people with work experience of ten years and above are assumed to have authority in the industry they find themselves in. In very few cases, an employer may not consider years of experience. This occurs if the job applicant displays evidence of know-how in the role advertised or the ability to learn quickly. Knowing how experience can impact earning power, it is advisable to use that to your advantage. If you lack the said number of years, it would be good to work towards that, and you can do this through internships or volunteering.
Performance reviews and matters arising from them
Your performance reviews can influence your future earning potential if you’re already employed. The secret is that having a consistently good performance record sets you apart from the rest. Many employers reward hard work, consistency, and measurable results. Therefore, bagging all these in your quarterly or annual reviews can make a lot of difference. Here, your earning power has nothing to do with years of experience. Instead, it is the evidence of your abilities that an employer notices and subsequently rewards.
It is worth noting that performance reviews have certain protocols to be observed. For instance, if you received negative feedback in your review, it wouldn’t be an ideal moment to ask for a pay rise. Again, if the company had to lay off workers in the year under review, the best decision is to hold on with any increment request. Any show of insensitivity or lack of decorum at this time could affect your incentive pay, so keep this in mind.
This is one of the major determinants of a person’s earning power or potential. Tertiary education and professional qualifications often give you a competitive edge over others. For example, the Bureau of Labor indicated that persons with a first degree often earn a weekly wage of $1,305. In sharp contrast, though, high school diploma holders receive $781 in the same period. Today, with e-learning platforms, many workers augment their education with online courses to earn more.
To conclude, these are a few factors that could influence your earning power. Thankfully, many of them are things you can work on to improve your income level.