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In recent times you might have noticed that traditional jobs are disappearing faster and faster? There are plenty of low income skill jobs vs high income skill jobs in the market. Have you seen the news about technology and robots replacing more and more workers? Did you know that fewer and fewer workers can secure full-time jobs? The old ways of working are disappearing.
In the past, you could graduate from college, land a secure job, work with the same company at the same job for forty years, and then retire from there only. That’s no longer the case, and you might already know that. Maybe there’s no way you’ll be staying at one company for forty years, or perhaps you’ve had to switch careers multiple times already, or maybe you know someone laid off recently and had to face the unforgiving job market.
Skill Economy
The old “job economy” is steadily disappearing, and a new economy is emerging; it’s called the Skill Economy.
- Fewer full-time jobs are available in the job market.
- The available full-time positions are way too expensive for companies to keep.
Let’s talk about the first one: there are fewer full-time jobs available than in the past. Have you seen the kiosks that are replacing cashiers at McDonald’s? Most of the time you get recorded answers with lot of options when you called into a call center? Haven’t you heard the stories about companies going through “corporate downsizing”- basically where they fire many people?
The world is changing. Regular full-time jobs are becoming less and less available. Companies are only keeping high-level executives and high-touch members as full-time staff—everything else can be automated, outsourced, or contracted. Not only that, but the full-time jobs that do remain are becoming too expensive for companies to keep. At each and every step of the corporate ladder, people can be replaced. It can be their call or company call.
Now, if you were running a company, would you pay 20-30 percent more for an employee who does the same amount of work as another employee? Think about it in terms of your life. If you were buying a car, and two dealers offered you the same car—same brand, same model, same condition—and one dealer quotes you $20,000 while the other quotes you $26,000, which would you choose? Of course, you’d go with the $20,000 car, the less expensive option. This is the same decision many companies are now making.
With full-time jobs disappearing, contract work and freelance work are emerging, fueling the Skill Economy. People are being paid more and more based on their skills, not their credentials, experience, or job position. However, not all skills are created equal—some reward you better than others.
Low and High Income Skills
You’re probably familiar with the concept of “supply and demand”—when there is high demand and low supply for something, it is more valuable; when there is low demand and high supply for something, it is less valuable.
It works the same way with skills. The principle of supply and demand divides skills into two categories: Low Income Skills and High Income Skills. Low Income Skills are high in supply and low in demand—that is why they will give you low pay. They are a commodity, and there are many more people out there who have these skills than there is a demand for them.
As an example, imagine a person working as a cashier. The wage of this person will be less but he or she had to work long tough hours. His or her income (paychecks) didn’t reflect their efforts. Why was that? It’s because working as a cashier is a Low Income Skill. No matter how good or fast they are in their work but they could always be replaced by anyone on the street.
In contrast to Low Income Skills, High Income Skills are low in supply and high in demand—that’s why they will give you higher pay. If you have a High Income Skill, people will fight to hire you, because you can deliver high value. Plus, if you have a High Income Skill, the work you get will offer you much more compensation, flexibility, and happiness. In addition, you’ll get the ability to control your finances, the time you work, and the location of your work. These are all crucial factors in deciding your happiness at work.
High Income Skills are low in supply and high in demand; this means low-level skills like grocery shopping, mopping floors, and driving are NOT High Income Skills. That’s why people who work as delivery boys on food-based apps or working as a driver of rental taxi apps won’t likely make a very high income per month. There is nothing wrong with being in that profession. It’s great for many people. It gives them flexibility and to earn outside of regular work hours. However, these people likely won’t make a high income because they are replaceable. If one driver or delivery boy isn’t available, there were dozens waiting around the corner.
Avoid This Mistake While Developing High Income Skill
A few years ago, Charlie Rose interviewed Will Smith and asked about his secret to success. Here’s what he replied:
“You don’t set out to build a wall. You don’t say, ‘I’m going to build the biggest, baddest, greatest wall that’s ever been built.’ You don’t start there. You say, ‘I’m going to lay this brick as perfectly as a brick can be laid.’”
Will Smith perfectly described how to stack your High-Income Skills: succeed with one High-Income Skill first, then move on to the next. This way, you’ll build a High-Income Skill stack. Most people develop High-Income Skills in the wrong direction. They will try one skill for a while, and then jump to the next, and then jump to the next before even developing slight competency with their current skill. Instead of building a wall like Will Smith described, they are making a brick pile.
You may go through times that are tough when developing your High-Income Skill. Maybe you’ll reach a plateau, or perhaps you’ll struggle with finding people who will pay for your skill. The mistake people make too often is abandoning the High Income Skill they have been working on when results don’t come quickly. Dan Lok’s advice for people who want to change course: be patient. Wait until you can earn $10,000 a month with your first High Income Skill before moving to the next. (Article is inspired from “Unlock It: The Master Key to Wealth, Success, and Significance” by Dan Lok)
