Salary Negotiation: A Reason to have Paid Attention in Algebra Class

Remember math word problems in high school? “Why do we need to figure out when two trains will meet each other?” asked many a high school student.  Quickly followed by the ever popular lament,  “I’ll never use Algebra in real life.”  Well, we were wrong.  One place to use Algebra is salary negotiation.  We need it to figure out what salary we should target; what salary we should ask for; and what salary will be the rock bottom.

Here is our word problem of the day.  Lilly has been offered a job as a Civil Engineer in Dallas, TX.    The job offer includes a starting salary of $80,000.  What salary should Lilly state as her counter-offer?

Unlike in high school, this is a word problem that does not include all the information.  You will need to do some research on your own.  The first thing is to find out about the salaries for civil engineers in Dallas, TX.  A quick search on and we find that there are many levels of Civil Engineers.

For this example, we have selected Civil Engineer III as the appropriate level.  According to the median salary is $78,480.  At first glance an offer of $80,000 seems good.

Remember here at our goal is to negotiate a salary that is on par with what the boys make.  To do this we will need to consider exactly what the median salary means.   Consider these two facts:

  1. Approximately 50% of the US population is male (49.2%) and female (50.8%) according to the US 2010 Census
  2. American women earn 23% less then men according to the US Dept of Commerce.  This would equal 77 cents to each dollar a man earns.

That would mean that the median (50% of Civil Engineers in Dallas make less and 50% of Civil Engineers in Dallas make more than $78,480) would not be an accurate depiction of the amount men make in the field.

When you do not know the ratio of men to women working in a field, I recommend using the following calculations to determine the median by sex. This will assume the 50/50 split in population carries to any particular field.

M = 0.885X

Median for All = M

Median for Men = X

Median for Women = 0.77 X

50/50 split in population

$78,480 = 0.5 X + (0.5) 0.77X

$78,480 = 0.5X + 0.385 X

$78,480 = 0.885 X

$78,480/0.885 = X

$88,677.97 = X = Median Salary for Men

(.77) $88,677.97 = $68,282.03 = Median Salary for Women

The $80,000 offer that at first glance seemed very accurate now seems too low by more then $8,600.    Based on this information, I would counter with a salary near the 95% range of  $94,000.  We need to ask for more than what we want so $94,000 will give room for additional negotiations if necessary.  Then again, this is all based on getting the median salary assuming Lilly is the typical civil engineer with the typical experience.

When you do know the ratio of men to women working in a field, I recommend incorporating that ratio to get more accurate data for your negotiations.  I have found one source that cites that women make up 10.8% of civil engineers.

Thus the formula needs to be adjusted.

M = (% of men in field) X + (% of women in field) 0.77X

Median for All = M

Median for Men = X

Median for Women = 0.77 X

89.2/10.8 split in population

$78,480 = 0.892X + (0.108) 0.77X

$78,480 =0 .892X +0.0832X

$78,480 = 0.975X

$78,480/ 0.975 = X

$80,492 = X = Median Salary for Men

(.77) $80,492 = $61,978.84 = Median Salary for Women

Knowing the make up of the field does change perspective.  The $80,000 salary once again looks acceptable yet we still want to counter the offer.  Remember the first salary offer is like the sticker price of a car.  There is typically if not always room for improvement.  My counter would be in the range of the 75% ($86K) to 90% ($94K).  What would your’s be?

© Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited

Earn More Girl, The Mobile App

screenshot ipad 3I am thrilled to announce a new tool for your salary research.  It’s the Earn More Girl mobile app for iPhone and iPad.  Some time ago I wrote a blog post about salary research and how the results set us up to aim too low.  How could that be you ask?  Well, we want salaries similar to men but the classic salary range results incorporate men and women’s salaries.  The resulting target salary you select such as the median will be lower than the median salary for men working in the job.

Target the Salary Men Earn

Here’s a little math word problem for you:  if the median salary for a project manager in Dallas, TX is $85,575 what would be the median salary for men working in Dallas, TX as project managers?  Earn More Girl will tell you!  Simply enter your target salary and select the job.  Earn More Girl uses the job categories that the US Dept. of Labor uses.  All jobs are categorized under five main groups:

  1. Management, Professional, and Related Occupations
  2. Service Occupations
  3. Sales and Office Occupations
  4. Natural Resources, Construction, and Maintenance Occupations
  5. Production, Transportation, & Material Moving Occupation

Using Earn More Girl Mobile App

Start by entering your target salary then select one of the five categories from above and drilldown to your specific job.  There are 135 jobs and job categories included in Earn More Girl.    To get the most accurate results select the closest category if you are unable to find your specific job or keep at the default if you are unsure of the best option.

The answer to the question above is $94,610.  So if you think you are average (which you are not) and you want to earn the median salary for the job instead of targeting $85,575 you should target $94,610.  That’s $9,000 more than you would have using just conventional salary research tools.  Aim higher and that gender salary gap will start to shrink.

How does Earn More Girl do it?  The gender pay gap continues to be stalled at 77% overall but it differs for various jobs according to Dept. of Labor stats.  Earn More Girl uses the gender pay gap for the occupation and the breakdown of men and women who work in that job to calculate your true target salary.

Personal Pay Gap

You can check out your personal pay gap as well.  Enter you current salary and select your job.  Earn More Girl will tell you what you probably would be making if you were a man based on the gender pay gap for your job.

Earn More Girl is free and will calculate your Personal Pay Gap.   Earn More Girl Pro will calculate your Personal Pay Gap and True Target Salary.  Earn More Girl Pro costs $1.99. Both versions are for jobs in the US and are currently available.

I look forward to getting your feedback on the app.