Oct 26 2009

Is being underpaid better than no paycheck at all?

What with the economy and all (are you tired of that cliche yet?), some folks are happy to take any job. At least, that’s what I’ve heard around teh interwebz. But is it true? And should people really take any job, even if they’ll be underpaid?

Case in point: My unmarried, no-kids friend from college (let’s call her Raquel) recently received a  job offer to be the editor-in-chief of a magazine. The job description sounds ideal for any journalism professional, let alone for a recent grad. Raquel will pretty much have full editorial control over a magazine that reaches a young demographic in a mid-size Midwestern city. It will be amazing on her resume.

She can expect to put in 40 – 50 hours per week easily in this salaried position. The benefits include a simple IRA plan but no employer match, what with the economy and all. Health insurance will run her about $50 per month, but I don’t know if this is an all-inclusive HMO or if she can expect to shell out hefty sums for prescriptions, doctor’s visits or other medical situations.

They’ll pay $500 toward her moving expenses.

The salary? $25,000 per year. They told her they were seeking “the best for the cheapest.” Jerks.

You can’t just hire anyone to run a magazine and expect it to be profitable. The $25,000 salary will mean she’ll be squeaking by paycheck to paycheck. She’ll be grossly underpaid.

The job description, skills required and location make me think they should be offering $40k – $45k at least. And, for pete’s sake, it should include an expense account.

Raquel will try to negotiate a higher salary, but she doesn’t think they can come close to paying what she’s worth.

You know what they tell kids in journalism school? “Don’t get into it for the money! If you want to enjoy a decent living, go into PR. Or marry a business major.” OK — I added that last part.

Is it so wrong to think that a job of this caliber should pay a decent wage? Making $45k annually isn’t living large by any means. Making $25k is going to be just plain rough. I’m thinking Raquel could earn more as a waitress.

So let’s circle back to my main question.

Should Raquel take this job, since it would be an amazing experience and potentially lead to other (hopefully higher-paying) publications?

She is unemployed at the moment, and any relevant job is better than no job, right? After all, those student loans need paid. And having health insurance is generally a good thing. Lastly, the Bank of Parents is about to close her account.

Or should she continue her search?

I think that in her case, being underpaid is better than not being paid at all. I’d take the job and commit to living like a broke college student for a few more years.

She probably won’t be able to build up much in savings, and she’ll only be able to chip at her student loans. It’ll be a lean year or two (or more) at the publication. Then she can move on to bigger, better-paying things. (Here’s hoping she doesn’t have to make a huge career change to achieve that!)

I do worry that by accepting a low starting wage, she’s implicitly saying, “Yes, I agree that I am only worth $25k.” Even if she gets a 10 percent raise at her first performance review, that’s only $2,500 more. And I certainly hope the low starting wage won’t affect her starting salary at her next job.

What do you think? Should she be happy she has a job offer and take it? Should she keep looking? What would you do?



25 Responses to “Is being underpaid better than no paycheck at all?”

  1. I … erm … Raquel wants/needs as much advice as possible! Thanks for the post, Kacie.

  2. Yeah, I thought I’d substantially change your name to protect your privacy, just in case you wanted that :)

  3. I agree. The job should pay, at minimum, $40K. And no expense account? Is it even possible to conduct business for a job like that without an expense account? I’d be wary of that one, lest you end up being expected to pick up the tabs for events, restaurant reviews, etc., that you can’t really afford on that salary.
    Re: insurance, even at $50/mo, that’s not so bad for health insurance, and in these times having employer-provided insurance is worth a lot (you could definitely make +$25K as a waitress, but then you’d have to buy health care on your own or go without).
    It’s a tough call, as it’s not a lot of money, but most entry-level journalism jobs aren’t going to pay much over the $30K line anyway. (I know someone in broadcast who got offered $16K for his first job in TV!)
    I think the most important factor in affordability is being able to find cheap living accommodations, if you can find somewhere with a roommate where you can split all those annoying expenses like cable and electric, that would help a lot.
    Good luck with your decision “Raquel”!
    .-= Brittany´s last blog ..The Strangest 10K Ever =-.

  4. I say take the job if it’s all that’s on your radar right now, but keep looking for something better. Hopefully you’ll get some great experience for the resume. Also, at least it’s in your field. A low-paying job in your field has got to be better than a low-paying job in an unrelated field. But they’re totally taking advantage of you. If the editor-in-chief gets paid that low, what do the writers get paid?!

  5. Hi Raquel! K, so I have a little experience in this area. I found myself in the same position a little over a year ago.

    I was in a crappy job marketing, working in retail because I didn’t have any other prospects, and I searched for a job for 10 months.

    I say definitely absolutely without a doubt take the job. Seriously, my job offered me $24K starting out, but it was better than retail and it was a chance to learn and grow. And you know what? I did. I have received what feels like a second college education at my current job. AND I’ve received three performance-based raises of 10% and above in a little over a year.

    In my case, I was fresh out of college with no experience in the field (I’m not working in journalism). My boss was testing me. It’s crappy that he started me for so much less than I’m worth, but it didn’t take him long to realize just how much I’m worth and start to increase my pay to reflect it. I’m probably still a little underpaid, but the experience and knowledge I’ve gained more than makes up for it.

    So I say in this economy, especially for journalists, you should seize every possible opportunity. If you’re not learning anything and there’s no opportunity for raises, keep looking. At least you’ll have something solid on your resume in the meantime, and health insurance. Which seriously you MUST have right now.

    Hope this helps!
    .-= Karen´s last blog ..We’ll be coming around the mountain … =-.

  6. I think she needs to consider that this is not the same as going to work at the McDonald’s full time for 25k. Yes, she’d end up woefully underpaid for the work that she’s doing, but she’d also end up with invaluable work experience for her resume that will allow her to get to that higher paying job later on. And if the choice is 25k + experience or unemployment, guess which one I’m choosing?
    .-= Jenn´s last blog ..Cheesecake-Marbled Brownies =-.

  7. Hi,
    Our situation is a little different, but I think applies. Last March my husband (who has been working in his field for 10 years) was unemployed but had a job lined up for September. He found a full time job and the pay was low, and no insurance until 3 months. But this was for a job that would only last six months, so he negotiated pay up $100 a week and took the job. Over the summer he took on more responsibility as a manager, and was now being grossly underpaid as the new responsibility didn’t come with new pay. Then in August he let the company know he would be leaving at the end of the month, and their response was to ask him how much he should be getting paid. He got a raise of almost 35%, making his new pay slightly more than the new job and a 401k. He stayed where he was.
    So my advice would be take the job because it’s good experience, you probably won’t get insurance if you work retail, and you’ll be doing something you like. But keep your ears open for anything better, then you can either take the better job, or if you like where you are, be in a better place to negotiate. Good luck!
    .-= Kasey´s last blog ..My bowl =-.

  8. Wow. I live in the southeast in an area where you can get a decent apartment for two for around $500/mo. I’m not sure if $25,000 would go further here or not, but I know it isn’t enough for that level of work. However, the health insurance is valuable. My husband and I once had to pay for our own and it sucked! I had a condition for which I required medication, but they considered it a pre-existing condition. We had maternity coverage just in case, but we had to pay the premium for a full year before getting pregnant or they wouldn’t pay anything. Now we have coverage through my husband’s work for ourselves and the two kids we’ve had since, and it’s $100 cheaper per month with no pre-exes.

    I’d say take it for the insurance and the experience, but try to negotiate higher pay first. And never stop looking for something better. You have to figure in how it feels to be unemployed. It feels SO crappy. I only had to search for a job for a month once I got out of college (I started looking before graduation of course), and I was so depressed. Even though the job I found wasn’t in my field (I had a BA in psych so I didn’t expect it to be) and it didn’t pay a lot, I was ten times happier just doing something, and the health coverage was great. It ended up being a job I loved.

    One more thing… When I took my job, I was promised a decent raise after I completed specialized training for something a few months later. This was also promised to a co-worker of mine who was hired a couple of months after me. Once they had us, they had excuse after excuse for not following through and allowing us this opportunity. Therefore, if you are promised a raise once x, y or z happens, be sure to get details nailed down and proof of this in writing so it doesn’t evaporate before your eyes once you are on the payroll. This is probably common sense but unfortunately it wasn’t for me at the time.

    Good luck!
    .-= Jenny´s last blog ..Shall we dance? =-.

  9. I sympathize. My smart, charismatic, college-educated husband makes $8 an hour in retail. We’re trying to support 2 small children on that. My biggest piece of advice is to not jump from job to job too quickly. He has been taking whatever job he can find after being laid off a year & a half ago, but that’s left him with a collage of work experience that makes him very unappealing to recruiters. One even told him it would have looked better to be unemployed for all this time, but that was not an option for us. Your situation is different – this is not a minimum-wage job at a pizza place. This is in your field, and will provide work experience as well as a just-barely-manageable salary. If you can find a really inexpensive living situation and get those student loans paid off as quickly as possible, do it!

  10. I think one of the commenters above is right: this isn’t a retail or fast-food job that won’t go anywhere. While the pay stinks, Raquel will get invaluable job experience and a job title that many other journalism majors dream of! If they think that she really is “the best” perhaps they’ll be willing to give a little bit on the salary. This is the point where she really has the most leverage to negotiate a higher salary. Once she’s in position, it’s a LOT harder to ask for a raise. OR (thinking out loud, here!) she should ask for a written guarantee of a 6-month performance review and a salary increase if things are going well. Maybe she should ask for both.

    Anyway, my point is, this would be great work experience. I say take it, but ask for the world before accepting. The worst they can say is “No” to all her demands.
    .-= marybeth at http://www.babygoodbuys.com´s last blog ..Baby GoodBuys Giveaway: $50 Gift Certificate to Vinent Shoes =-.

  11. I would take the job. Yeah, it isn’t the best pay but your friend is a recent college grad yes? You can’t expect to graduate and then have an amazing job with amazing pay immediately. It sounds like the job would look great on a resume and it would be an amazing experience. It would be smarter to take the job (in the field she wants) and make less money than say get a job making more money as a waitress (as you said) and going nowhere.

  12. I remember when I was first out of college, and getting turned away from job after job because I didn’t have experience…

    My husband’s first job was similar (before we were married)… he was a computer programmer in New England, and his first job paid him just under $30k/yr. The salary definitely didn’t match what he was worth nor what the cost of living was. He couldn’t even afford an apartment, but rather rented a room from someone he knew. He stayed for a year and then moved on to another job that was much better paying.

    In retrospect, that job gave him amazing experience. He often pulls from what he learned there, and definitely remembers it fondly. It also gave him confidence after 10 months of fruitless job searching after college. He had to live very frugally, but he found a really good friend in his roommate. He doesn’t regret taking the job at all.

    I read him this post and he thinks Raquel should take the job too. Hopefully when the job market picks up, so will the salaries, and Raquel will have a lot more opportunities available to her.
    .-= ashley@twentysixcats´s last blog ..dear savannah: two months =-.

  13. This:
    http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004030296

    Is why Raquel’s situation is looking at is it is. Get in, see what you think, and then decide if it’s worth trying to claw your way up into the ugly middle of this. Nice article from Megan McArdle on this topic:
    http://meganmcardle.theatlantic.com/archives/2009/10/the_media_death_spiral.php

  14. If she wants to stay in journalism, she should take the job. It’s impossible to break into positions like this! Especially in this environment, where newspapers and magazines are folding and no one wants to hire new employees.

    Bethany, writers don’t get paid much – especially for local and regional publications. It’s all about combining quantity and quality to earn a decent hourly rate, and to stay busy enough to pay the bills. It’s hard work, but I think it’s worth it! If you have a good reputation as a writer, the work will follow. The big bucks won’t. :-)

  15. The pay is definitely weirdly low for the position, especially considering the stress that will come with it. It’s just kind of unsettling, like, don’t you want to invest more in the person in charge?

    BUT $25K a year is pretty standard for a starting journalism job right now. Of the 100 or so jobs I applied for, I only saw a few that offered anything higher. Most of those were in big cities where it would be impossible to live on that. The other offers I had were for $25K or less.

    I only make a little more than that (about 75 cents an hour, haha!), though, and I’ll say that while I’m not going to be buying a house anytime soon, I wouldn’t describe my life as paycheck-to-paycheck. There is money in case of a (minor) emergency. If you live in a state like Indiana or the one where “Raquel” (haha) is considering a job (housing is reasonable), if you are frugal, you can live on $25K and have a little extra.

    You are right, though, about waitressing. I took a pay cut leaving my waitressing job for the one I have now. But there’s no such thing as raises in waitressing, not to mention I work much better hours now in a much better work environment.

  16. We make about $28,000 a year for a family of three, and we don’t have health insurance! I’m thinking she’ll be more than fine for one person on $25,000. You can live well with a simple life. :-)
    .-= Rachel´s last blog ..Check out my sweet deals!! =-.

  17. If that is all she can find and she desperately needs a job, I would say take it. But wow, that is crazy underpaid. What a slap in the face! She deserves much more than 25,000. I agree that she could probably make more as a waitress. Sheesh!

    However, this may present better opportunities down the road, so that’s another reason I’d consider taking the job.

    Good luck Raquel… I mean, Rachel. :)
    .-= Cassie´s last blog ..I like Sunday’s. For now. =-.

  18. Take the job. You can always learn som and keep looking for something that pays more later. :)

  19. Thanks for commenting, everyone! It was nice to hear from some of my old journalism pals who are still in the business. I miss you guys!

  20. This is a REALLY tough situation, you mention todays economy and all, my husband has been laid off for just shy of a year (6 weeks shy of a year to be precise) and I am disabled, he has looked everywhere, including base jobs, there is Nothing available in his field or others, he is going back to college and his degree should pay about $50k a year, but where we live its paying less than $12 an hour and requires 5+ years experience, so I would take any job that will offer that step ladder of experience because its proving to be more important in the modern economy. Remember though to use it as a stepping stone and continue to look for a better job as your experience increases.
    .-= Charlotte´s last blog ..I don’t feel good =-.

  21. Thanks, all. I’m heading there this week to negotiate an increase and to check out the town.

    -Raquel

  22. Raquel, absolutely take it! I would work as a janitor in McDonald’s if I had to. There’s no underpay/overpay/pride in working. Work is work.

    Do a great job for them and everything will fall in place. You can ask for a raise, or leave next year bc your work will shine in front of competitors who will gladly pay you “market rate”.

    Best of luck!

  23. This is exciting! I hope “Raquel” reports back and lets us know what decision she makes! I think she should take the job, too. My current job I actually volunteered for eight hours a week (2 four hour days) for one year before I asked them to hire me. By then they felt I was so valuable they paid me what I asked for, and I’d asked for $5 higher an hour than I would have liked to be paid! I hope she can get them to go up a little higher, and maybe she can find a roommate situation so she can get by on the low income. Good luck!
    .-= Mrs. Accountability´s last blog ..NuRide – Earn Points for Carpooling, Biking & Telecommuting =-.

  24. Dear all,

    After spending time visiting the publication, the company and I have both decided that we are not as good of a match as they had initially hoped–money or no money–and I have graciously turned down the job. It turns out, leaving my hometown of Chicago is worth a lot more than 25k and sacrificing my own happiness. They picked up on this.

    I read each comment sincerely and afterward, I really wanted to want this job, but I guess some things aren’t meant to be. I have another interview next week in Chicago. Wish me luck and hopefully a bigger paycheck!

    Thanks so much for your help!

    “Raquel”

  25. Thanks for letting us know how it went! I’m sorry this one didn’t work out, because it’s gotta be a relief to just have a job and be done with the search. Still, I’m confident in you and your skills and I’m hopeful that your interview will go well. Good luck!

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

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