Top 5 Factors Affecting Earning Potential

#1: Education

In many cases, there is a direct correlation between your education level and your salary potential. Data from the U.S. Bureau of Labor Statistics clearly shows an increase in salary potential with each advancing level of education. Someone with a high school diploma may expect to earn a median income of $930 per week, whereas someone with a master’s degree may earn a median income of $1,840 per week.

This correlation is often more pronounced in certain fields of study, such as finance, healthcare, or engineering. There are, of course, exceptions to this rule.

Skilled trades often have a lower educational requirement to get started and have great earning potential with on-the-job experience and an entrepreneurial spirit. Often, these skilled trade careers begin with coursework and on-the-job training or an apprenticeship. Individuals may stay with an established company or branch out to start their own business.

#2: Industry

As with education, the industry you choose to work in may have an impact on your earning potential. For example, if you choose to work in high tech you will likely earn more than if you choose to work for a non-profit or in the education space.

According to Visual Capitalist, some of the industries with the highest paying jobs include utilities, technology, mining ang logging, finance, construction, and manufacturing.

#3: Experience

Experience brings both skill mastery and leverage in salary negotiations. With greater experience comes a greater opportunity for a higher salary.

You will see this reflected in job ads — a director-level role will pay more than an entry-level role.

That said, it’s also important to ensure you are consistently learning and gaining new skills so that you stay relevant and capable of performing your job. Your career growth is dependent on continuous learning and skill development. Don’t stop learning.

#4: Skill Set

The skills you have developed will influence your earning potential. For example, a medical assistant can improve their earning potential by acquiring additional skills or certifications, such as phlebotomy or electronic health record management.

Be sure to highlight the skills and certifications you’ve earned when engaging with potential employers to showcase your value and support salary negotiations.

#5: Location

Often, salary expectations are adjusted based on the location’s cost of living. For example, someone who works in New York will likely earn more than someone who works in Alabama because the cost of living in New York is significantly higher than in Alabama.

According to Indeed, the top five highest-paying states include:

• Massachusetts
• New York
• Washington
• California
• New Jersey

Remote work has blurred some of the lines regarding location requirements, but many employers still use location-based pay scales to determine appropriate salary ranges.

So what’s your next step?

To improve your earning potential, you must invest in yourself first. Enroll in a relevant, accredited career training program, like those offered through U.S. Career Institute, to acquire the knowledge and skills you need to either get started in a new career or level up in your existing career.