Are you really better off now than you were a few years ago?

Like a good little drone, you’ve put in the time, sweat, and tears.

You’ve made sacrifices. You’ve lost sleep. It seems to be working. Every single year, your earnings are increasing by hundreds, maybe even thousands, of dollars. It all looks great on the surface, but your bank account doesn’t seem to be taking off the way you hoped…

The truth is that you’ve been in the exact same spot. Or worse, you’re being devalued like that old Honda Civic parked in the driveway.

Don’t believe me? Do this exercise.

Dig up the records of your pay stubs for the past five years. These days, it’s pretty straightforward to do this because everything (and I mean EVERYTHING) is online and searchable. You might need to reset a password or two or maybe even 🫢 make a phone call.

(And yes, I didn’t know that if you did “gasp” that it would insert the emoji automatically if you use a colon. Live and learn, right?)

For those of you in the corporate sector, you may find your compensation package in your profile page rather than the payment sections where they keep your paystub records. That’s where I found mine at least.

Take your time. Hunt those bad boys down. It’ll be worth the effort for the next part.

Use your favorite one. Whether it be Excel, Google Spreadsheets, Smartsheet, LibreOffice Calc or something else entirely, they’ll all do the trick with what you’re gonna do in a moment.

Make a cute little table. I recommend headers (I’m psycho). Put the years down the left column and your yearly earnings on the next one. Once you’ve got those two down, the real fun begins.

Here’s an example of the setup I did using Google Sheets:

Go ahead. If you haven’t started tearing up yet, keep going. Wherever you are in the world, this next part of this onion certainly will.

It’s not all the hard to do (yet). Go to this site and grab the yearly inflation rates for the corresponding years if you’re an American. Spoiler: the last few years have been around 4% on average, and it’s where I started when I decided to write this tutorial/article. If it’s not your cup of tea, go to your favorite search engine and type in “[country] year over year inflation” and dig up the data for your country.

Or use AI. It’s probably going to be en vogue by the time you read this article anyway. That, or they’ve already taken over and this is just for nostalgia on your part (why the heck would you torture yourself is not my business).

For your convenience (if you work in the US) here’s the inflation over the past decade as of publishing:

Got’em? Ok. Put those numbers in a third column like this:

A little piece of trivia about me: I joined the workforce in 2012…maybe I should do this exercise for my entire professional life? Just a fun thought (kinda).

And before you jump on me for the differences in the inflation rates, I’m aware of that. The numbers are from calculating in a slightly different way for fiscal year.

Anyway, the moment of truth is almost here so let’s do some calculations!

Now in the fourth column, multiply the pay from the previous year by one plus the inflation rate of the current year (i.e., that’s a percentage so 7 would be a 0.07…so 1.07). The result is what your pay needs to be to keep up with inflation.

In the fifth column, take the difference between the current and the previous year’s earnings and divide it by the previous one (i.e., (current - previous)/previous). That’s your percentage change in pay (that hopefully it went up). The first entry will be empty since you won’t have a previous year for the first year.

Here’s what the spreadsheet looks like for our example:

You didn’t think you’d be doing work with this article did you? Surprise!

Ok, hopefully this is starting to come together, but I hope that growing sense of anticipation is more tinged with curiosity than dread. I hope.

The next, and final, part of this is where we put it all together for something that you’ve probably already guessed at. I take no responsibility (or pleasure) for what happens.

Now that the truth is laid bare before you like changing a baby’s diaper, you’ve got something solid (or runny) that you can take action on.

Wanna see it in another, more fun, way?

Take the latest year’s earnings and subtract it from the first year. Now divide that by the first year earnings. That’s the percentage increase of your pay compared to five years ago.

Now do the same thing for the value based on inflation. Take the difference in the percentages between the two. That’s the percentage increase in your purchasing power over the past five years.

If you work in a corporate environment and have not had a promotion during this time, you’ll probably find that they’re pretty close…within probably two or three percent if I’m being generous. Here’s what that looks like for what we’ve been looking at:

That’s the reality of our situation, at least in the US. You’re lucky if your purchasing power has kept up with inflation, assuming you haven’t been promoted and have done a decent job of it all. The truth is that once you’re in the system, your value doesn’t change until you climb another rung or switch to another position or company entirely.

It pays to be aware of how the game works.

Wanna know something? You’ve read this far (thanks) so I’ll tell you:

This example is based on my earnings. That’s MY purchasing power I’m sharing over the past five years. Feel free to drop your reaction in the comments.

Every single year, I’ve spoken with management about our increases for our team, and it’s consistently been tracking inflation. Every single year, we are reminded of the uncomfortable truth — that we aren’t really being given a raise. It’s an open secret…one that I’m sure you already knew from the beginning (but still read this far anyway).

But here’s the thing that I’ve realized after several job hops across two very different regions of the world…

You always have a choice.

You are now aware of what’s going on (if you weren’t before). I’ve understood this reality for years, but I also know that there are other factors that drive me, not just salary. This is my lived experience, and there are a million other articles out there that share the same message.

The key is to not be bitter about the system. Do something about it. This is why I’m out here sharing what I know and what I’ve started to figure out. Decoupling from the system means understanding it; playing the game knowing the full set of rules…the ones that are hidden in the fine print and that a select few are told.

The long game is the one that matters. Awareness is the first step.

If this article hit you in some way, feel free to repost it or send it to someone you love (or hate?) so that they may consider trying this out for themselves.

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