From minimum wage to median income: the moves that actually raise pay

From minimum wage to median income: the moves that actually raise pay

Two numbers decide your pay: the rate attached to your hour and the number of hours the year contains. Most people negotiate neither. They take the annual increase, which is a budget line rather than a market price, and it lands in the low single digits whether the work got harder or not.

The multiplier that turns a rate into a year is 2,080 hours: 40 hours across 52 weeks. Learn that one number and any hourly rate becomes an annual figure you can hold against a job posting, a rent, or a competing offer.

What an hourly rate is worth over a year

The federal minimum wage in the United States has been 7.25 an hour since 2009. Many states set a higher floor and a few cities higher still, so the number worth checking is your own state's, not the federal one. At 7.25 an hour over 2,080 hours, a full-time year pays 14,560 before tax.

Run the same multiplication up the scale and you get the ladder most people climb. 10 an hour is 20,800 a year. 14 an hour is 29,120. 18 an hour is 37,440. 24 an hour is 49,920. 30 an hour is 62,400. None of those rungs requires a degree. Each one is a different job title, a certificate, or a different set of hours.

Two more an hour is 4,160 a year. That is not a rounding error, and it is the whole content of most pay negotiations: one conversation about four thousand dollars that then repeats every year afterwards.

The distance between the first bar and the last is not earned by staying longer. It is bought with a different title, a licence or a set of hours, and every step on the way has its own arithmetic.