Four Reasons Why You Are Underpaid And What To Do About Them ⋆ Repurpose your Purpose

Underpaid? I know your situation very well. I was underpaid for years, and many Americans experience or have experienced working long hours for meager pay. Just last April, Alternet reported that "in 2014, over half of American workers made less than $15 per hour, with some of the top employment sectors in the U.S. paying $12 an hour or less." And even if you are paid much more than $15 per hour, it's likely you are underpaid by $5,000 per year according to Glassdoor's research.

Let's look at some of the top reasons why you are underpaid:

Cost of living has far outpaced salaries. I live in Los Angeles, and here a single person making less than $50,500 per year is now considered low income! If you have been looking for a job in LA, you know very well that there are plenty of positions paying less than $50K, positions that require a college degree and previous experience. Even with an MBA, you might have trouble finding a job that pays $70K or more, and with a family of four, $72,000 is still considered low income. In other words, you need to make a lot more money to feel financially secure. So you feel overworked, burdened by your monthly bills (let's not forget those student loans!), and barely making it to the end of the month.
You work as a contractor or freelancer. According to Salon, "a stunning 94 percent of the 9 million new jobs created in the past decade were temp or contract-based gigs." While there are ways to make very good money as a contractor, lots and lots of companies are moving away from hiring full time employees in order to pay less and avoid providing benefits. Factor in hiring contractors abroad for a fraction of the fees Americans ask to be paid, and the picture can be quite bleak.
Your hiring manager low balled you during salary negotiations, sensing an opportunity to save some money, and you fell for it. Or you work for a company that routinely underpays its employees.
You are underemployed. The problem is not how much you make per hour, but how many billable hours you actually work. Or you are working at a job that you are way over qualified for. You might be a contractor or a part time employee, and all you need is a few extra hours...and benefits. Or you need to get that job you studied so hard for, or have ten years of experience in.

It doesn't look so good, does it? So what if you are underpaid, what can you do to get out of the vicious circle of barely making ends meet?

Start by developing lots of compassion for yourself. Some career experts would make you believe it's all on you: work hard and you'll become a millionaire! Take a good look at the facts instead: some professions are severely underpaid and no matter who you are or what you do, you will continue to be underpaid if you stay in your field. How much you get paid depends on a number of factors: where you live, the size of the company you work for (or contract with), your profession, etc. Research, research, research! Then do some soul searching: are you OK living on that pay? Do you love your profession/city/industry enough to give up other needs or desires? If the answer is Yes, let go of resentment, cut your expenses, and get involved with groups and associations advocating on your behalf. If the answer is No, and you don't love what you are doing or where you live, or your industry, start exploring other options. One thing is making little money while being happy, and another is being miserable and underpaid. You might as well look for something that fulfills you!
If you are a contractor or freelancer, you have to grow thick skin and be ready to fight back when people try to take advantage of you. First, ask yourself whether you believe your work is worth more pay. Many freelancers are underpaid because of chronic feelings of worthlessness or uneasiness around money, agreeing to work for peanuts. If this is you, stop! Say No to low paying clients, and develop a plan to get paid higher rates. Shift your mindset, and avoid contributing to the cycle of low wages by doing what you preach: don't outsource workers abroad for pennies on the dollar and don't low ball other contractors. A rising tide lifts all boats.
Some companies or industries are just horrible, paying high salaries at the top and doing everything they can to avoid paying for benefits or living wage at the bottom. Avoid these companies like the plague, you can find who they are by researching them on Glassdoor and asking your connections. Sometimes you can even find this type of information with a simple Google search. Even if you are paid very well, I invite you to think of this as karma, don't work for one of these companies, and don't contribute to a system of exploitation. You will most likely end up in an environment that does not pull for inner growth or group participation, and instead fosters a dog eat dog mentality to get to the only high salaries available. If you are a woman and/or a person of color do a lot of research on salaries and compensation, as all too often a company might make you an initial offer that is lower than what they offered a straight white male. Unfortunately the wage gap is still a thing in the United States, do not underestimate it!
Learn to negotiate - it's a skill that only has upsides. However, if you feel the other party is lowballing you or being very aggressive, be open to walk away. You want to work with and for people who see you as an asset and understand that proper compensation helps their firm in the long run. If you feel you have to fight really hard to be paid a market rate salary, think twice before accepting the job. I would also avoid agreeing to a later salary increase based on performance reviews, I unfortunately have seen companies give out negative reviews simply to save some bucks a few months later.
If you are underemployed, look for a full time job, or find more clients, or increase your workload with current clients. Learn about marketing, sales, and be ruthless with your time. Think of yourself as a business, and request deposits and payments in advance. Network with other freelancers, and develop a referral system: this will not only help you with getting more clients, but you will be able to learn from your colleagues as well as possibly find out which clients pay promptly and well. If you are working in a position for which you are over qualified and you cannot seem to break out of it, it might be an issue of changing the way you have approached your job search or pitched your skills and experience. I work with individuals just like you, get in touch and we can discuss some ways to get you to the level of work and pay you deserve.