I'm Andy Temte and welcome to Money Lessons! Join me every Saturday morning for bite-sized lessons that are designed to improve financial literacy around the world. Today is October 31, 2026.
Last Saturday I promised that today we'd take up getting paid for the skills you build: raises, promotions, and changing jobs — three ways your pay grows. In the first episode of this series, we named the six jobs your money has — earn, spend, borrow, protect, grow, and give — and we said that the first job, earn, covers two things: the size of what flows in today and, just as important, how that amount increases over your working life. The last seven Saturdays have been about earn: first a year of pay, then your earning power as an asset. Today is about the day your pay rate changes, and about what you can do to make the change bigger.
Three Ways Your Pay Grows
The first way your pay grows is a raise, and there's a distinction worth clearing up at the start, because two kinds of raise get confused with each other. A merit increase is the raise many employers give once a year after a performance review, usually stated as a percentage of your current pay, and it's meant to reward your work. A cost-of-living adjustment is a raise given to everyone at the same time, in the same percentage, to keep pay up with rising prices, and it has nothing to do with how well you did your job. When a raise arrives, it's worth knowing which one you got.
Here's how the merit increase usually works. Many employers decide once a year how much money they'll spend on raises for all of their employees put together. Managers then divide that money among the people who work for them, so a merit increase is a share of money that was set aside before anyone reviewed your work. A strong review can earn you a larger share than your coworkers get, but the money set aside for raises doesn't grow to make room for it: an outsized raise for you means a smaller raise for someone else, or for a group of your coworkers, because the total was fixed before the reviews began.
The second way your pay grows is a promotion: a move to a different job at the same employer that carries a higher pay range. A pay range is the lowest and the highest amount an employer will pay for one job. The range belongs to the job, not to the person in it, so two people doing the same job can be paid different amounts and both be inside the range. When you move into a job with a higher pay range, your new pay has to fit inside that range, so at the least it rises to the bottom of the new range. That's why a promotion usually brings a larger increase than a merit increase does. A new title with the same pay range is a new title, and your pay hasn't gone anywhere.
The third way your pay grows is a new job with a new employer, and we can put numbers on it, because the Federal Reserve Bank of Atlanta measures what changing jobs pays compared with staying.
Its Wage Growth Tracker takes the Current Population Survey — the monthly survey of households that the Census Bureau runs for the Bureau of Labor Statistics — finds the same people twelve months apart, and reports the median change in their wages. The median is the person in the middle: half of workers saw more wage growth and half saw less.
The Wage Growth Tracker sorts people into two groups: job stayers, who are with the same employer and in the same kind of work they were in a year earlier, and job switchers, who aren't. Averaged over the three months ending in September 2026, the median job switcher’s wages were 4.7 percent higher than a year earlier, and the median job stayer's were 3.4 percent higher.
Before you take that gap as a rule, note that it moves, by a lot. In July 2022, the switchers’ wage growth was 8.6 percent and the stayers’ was 6.0 percent. Fun fact, in the first half of 2025 the gap closed, and for several months the people who stayed put saw slightly more wage growth than the people who changed jobs. So the extra wage growth from changing jobs is real in some years and gone in others.
The Wage Growth Tracker is updated every month, it's free, and I've put the link at the bottom of today's post, because that gap is data for a decision to change jobs.
It Never Hurts to Ask
Suppose two people start the same job, at the same employer, on the same day. One accepts the first salary offered. The other asks for $3,000 more and gets it. That $3,000 is paid every year they both stay, and because every merit increase is a percentage of current pay, it's raised every year too, so the gap between the two of them grows a little with every raise for as long as they're there.
Asking for a raise is a conversation, not a confrontation. You ask for a raise with a specific amount in mind, and you back the amount with a reason: the pay range for the job, the responsibility you've taken on, and the results you've delivered for the business.
When I was 22, I was working at Leithold Music in La Crosse while going to college full time. As I took on more responsibility at the store, I screwed up the courage to ask my mentor and boss, the late Roger Leithold, for a raise. He turned me down, and then he said something I've carried ever since: "Andy, it never hurts to ask." The raise came later, and it was larger than I expected — and I'm confident that asking made a difference in what I ultimately received.
Roger's line comes with a caveat: there are times when it does hurt to ask, and most of them are about timing — the week the business is under real stress, or the day your manager is plainly distracted or out of sorts. Situational awareness comes in handy here. So ask once, ask professionally, and pick your moment. Prudent management of your personal economy is to ask — for the starting salary and for the raise — with a specific amount and a reason.
The Posted Range
So where does the amount you ask for come from? More and more often, from the job posting itself. As of this recording, fourteen states and the District of Columbia require employers, above a minimum size in most of those states, to put the pay range in the job posting — the low and the high — rather than wait for you to ask. Minnesota's law has required it since January 1, 2025, for employers with 30 or more employees, and it says the range must be the employer's good-faith estimate of the minimum and the maximum it will pay. Illinois has required it since the same day, for employers with 15 or more employees. Wisconsin, where I live, has no such law; a bill was introduced in October 2025 and has not come out of committee.
Why does this matter? Back on August 15th we named anchoring as one of the cognitive biases, or mental shortcuts, that cost people money: the first number you see sets the frame for every number after it. In a salary conversation, the first number is usually the employer's offer, and everything you ask for gets measured against that offer. When the range is in the posting, the top of the range is a number you've seen before the conversation starts, and you can measure the offer against the top of the range instead. The anchor is still there; the posted range lets you choose which number it is. If you live in a state without a law on posting salary ranges, you can still ask for the range. The employer may decline, and you've lost nothing by asking.
What This Means for You
There are two things to focus on from today's episode.
First, your starting pay — the salary or hourly wage you accept when you join an employer — is the base. Every percentage raise you earn there is applied to it, so the moment to be careful is the moment you're offered your starting pay.
Second, of the three ways your pay grows, changing jobs is the one you can check against data before you act. Look at the Atlanta Fed's Wage Growth Tracker before you change jobs for the money. Then compare the two jobs on total compensation — the salary, the employer's share of the health premium, and the retirement plan match — because, as we said on September 26th, two jobs with the same salary can pay very different amounts.
So here's your homework this week. Find the pay range for the job you have. If your state requires the range in postings and your employer is hiring for your job, it's in the posting; if not, ask HR. Then write down the salary or hourly wage you'd ask for, and the reason you'd give.
Starting pay is the base for every raise after it. Know the range, and ask.
Next Saturday we take up how the law classifies your work: who the law counts as an employee rather than a contractor, and who it says is owed overtime.
Until next week... Grace. Dignity. Compassion.
The Atlanta Fed's Wage Growth Tracker: https://www.atlantafed.org/chcs/wage-growth-tracker
