HOW TO EARN MORE IN 2003
Push for what you want, get it
Degree, second job ways to pad income

Mary Wyatt of Redford Township receives a bachelor of science degree and teaching certificate at UM-Dearborn Saturday.

Many Michiganders want to boost their income next year. Federal extended unemployment benefits are expiring this week, affecting 34,000 Michigan households. And holiday bills will start arriving in January. The Free Press decided to examine income-boosting strategies that could add anywhere from a couple hundred dollars to tens of thousands of dollars to people's annual household income. First in a series

Degree, second job ways to pad income

December 26, 2002

BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER

Before Mary Wyatt had children, she worked in the payroll department of a company that paid her $20,000 a year. A coworker in the next cubicle earned a lot more.

The difference? The other worker had a college degree.

"I did all the same work that the guy with the degree did, but I got half the pay because he had the paper and I didn't," Wyatt, 39, of Redford Township, recalls.

So, ready to return to work with her children older, Wyatt made college her first stop. She graduated Saturday with a degree in teaching from the University of Michigan-Dearborn. She hopes to find work in West Bloomfield, where teaching salaries start at around $35,000. Thanks to union scale, she can expect to earn close to $50,000 in a few years.

Wyatt is among many Michiganders who want to boost their income next year. Many are tired of making less than their coworkers. Tens of thousands hurt by the recession are still struggling. Layoffs and downsizing have cut deeply into many people's bank balances. Federal extended unemployment benefits are expiring this week, affecting 34,000 Michigan households. And holiday bills will start arriving in January.

So the Free Press decided to examine income-boosting strategies that could add anywhere from a couple hundred dollars to tens of thousands of dollars to people's annual household income.

Of course, it helps to be a smart saver, too. Nothing in our four-day series diminishes the importance of using credit cards with care or being savvy about stocks and bonds. But with the stock market struggling, and money market and CD rates hovering between 1 and 2 percent, it's going to be hard to build wealth without earning more.

Besides Wyatt's strategies -- working more, getting more education and joining a union -- the Free Press will look at how to ask for a raise, get a second job, learn about hot job prospects and start your own business.

Don't expect get-rich-quick schemes. Most of the strategies take a while to pay off. Wealth requires time and effort. Playing the lottery is not a realistic way of boosting income. Don't send your money to Nigeria in response to an e-mail.

Nor do desperate measures pay. People have tried it all: cheating on expense accounts, chiseling the Internal Revenue Service, skipping out on alimony, stealing from the church poor box. Disgrace, jail time, and ruin await.

The good news is that almost anyone can boost lifetime income by following one or more of the strategies we'll highlight. Among the proven money-makers:

Get a job

That leaves a fair amount of room at the margins for people to increase household income by picking up more hours. That, in fact, has been happening for many years, as the percentage of adults who work has risen.

That trend mainly reflects the movement of women out of the home and into the workforce. Although the percentage of men who work has drifted down over the years -- probably due to early retirements -- the percentage of women who work outside the home has risen to about 65 percent from 53 percent in 1969.

For two-parent households like Wyatt's, with a full-time breadwinner and a part-time or nonworking spouse, having the spouse get a job or take on more hours is a natural way to boost a family's income.

But be smart about it: Wyatt did some retail work for a while when her children were younger, but she earned only about $8 an hour. Going back to school before working full time again made more sense.

Meanwhile, retirees can rethink their nonworking lifestyles. Increasingly, the work-till-you're-65-and-stop-forever approach is fading.

Ed Lotterman, a St. Paul, Minn.-based economist and writer, says seniors flocked back into the job market in the late '90s when the unemployment rate in St. Paul fell to near 1 percent.

"There were literally old people in wheelchairs who were greeters at Wal-Mart," he said. "A lot of old gentlemen were helping to hand out the shopping carts when you walk into Target.

"I met one guy who was 82 who was driving the little tractor picking up golf balls on the driving range."

Go back to school

Another strategy to earn more money is to get more education.

Wyatt isn't the only college grad to out-earn less educated people. Getting more education probably ranks as the best way to enhance lifetime earnings.

College grads over 25 earn more than twice as much each week as high school drop-outs -- $896 versus $360 -- according to the U.S. Bureau of Labor Statistics. Graduates keep their jobs during a recession more often, too.

High school dropouts have nearly 9 percent unemployment right now; for college grads, the figure is just over 3 percent.

Even if you have to juggle kids and class work for a while, going back to school is worth it.

"In the long run, if you want to have higher income, you've got to get more education," Lotterman said. "It's hard to do in the short term, but the deck is just stacked against you if you don't have anything beyond a high school degree."

Join a union

To hip twenty-somethings, union membership might seem outmoded and boring. But how's this for cool: People who carry union cards take home 20 percent more pay on average than nonmembers. That's true across a range of industries -- manufacturing, services, government work -- and it's been true for as long as researchers have been studying the effects of unions.

The catch is that joining a union isn't easy. Unless you work in an auto factory, a public school or a government office, you might not have a union to join. Starting one in your workplace can put you in jeopardy of losing your job even though organizing is protected by law, and union membership might involve walking a picket line at Christmastime, like striking nurses are doing this month at Northern Michigan Hospital in Petoskey.

Despite the difficulties, joining a union remains one of the best ways to earn more money and enjoy other benefits like job stability and a better pension.

Ask for a raise

If it works, this is probably the quickest way to a higher income. Even during tough economic times, experts say many employers want to hold on to their best workers.

If you believe you're underpaid, don't be afraid to broach the subject of a raise or better benefits such as flexible hours or more vacation time.

"Most companies try very hard to have equitable pay policies," said Charles Craver, a negotiating specialist at George Washington University in Washington, D.C., and author of the book "The Intelligent Negotiator."

But many people are afraid to ask for more money.

"I've never asked for a raise," said Jamah Barksdale, a truck driver from Southfield, adding that he usually accepts whatever increases he's offered each year without complaint.

"I think it's the fear of rejection," he said. That fear of the unknown might be the biggest obstacle to higher pay. It prevents people from asking for a raise and inhibits most other kinds of useful action, including the ones outlined above: joining a union, going back to school and getting a second job.

Contact JOHN GALLAGHER at 313-222-5173 or gallagher@freepress.com. Free Press staff writer Jennifer Bott contributed to this report.