Life may begin at 40, according to any number of Hallmark cards, but by 45, your chances of ever landing a major raise are pretty much dead.
At least, that's one of the many takeaways from a recent paper by a
group of Federal Reserve researchers in Minneapolis and New York, who
used a massive trove of Social Security Administration data dating back
to 1978 to analyze how men's earnings evolve over time.
For the rich and poor alike, the economists found that "the bulk of
earnings growth" happens in the first 10 years of work, typically
between the ages of 25 and 35. During the next decade of their career,
men can expect smaller raises overall.
After 45, those in the bottom 90 percent of lifetime earners see
their earnings decline as a group, in part because people often start
cutting back their hours around that time, especially if they do manual
labor for a living. Meanwhile, even 1 percenters only see relatively
minor pay bumps after middle age.
For the visually inclined, here are those trends graphed. On the
x-axis, you have where each man falls on the income distribution based
on his lifetime earnings. On the y-axis, you have earnings increases
during each decade of life. Again, note that most of the growth happens
during the first 10 years in the working world (the blue line).
Here's another, perhaps simpler, way of looking at the trend, from a
related paper released earlier this year based on the same dataset. For
the super-rich (0.1 percent), rich (1 percent), and the rest (99
percent), income basically plateaus after the early 40s.
Guvenen, Kaplan, and Song (2015)
Of course, we're only talking about averages. There are people out
there who have late-age renaissances and start earning like never
before. But most of us are not Louis C.K. We set up our careers by our
mid-30s, either by working up through the ranks of a company or going to
school to position ourselves for a pay bump once we have our fancy
By middle age, we pretty much are what we are, professionally. Or, as
Schopenhauer supposedly said: "The first forty years of life give us
the text; the next thirty supply the commentary."
Via the Washington Post's Danielle Paquette