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It's not about what you're worth or how long you've worked there. It's about what you can negotiate and what your perceived worth might be. If you don't like what you're paid, get another job. You'll find out right away what your boss THINKS you're worth. If he offers you more to keep you, obviously he thinks you're worth it. If he won't pay you more, you might be better off taking the other job.

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It is the option of the company to do this. Doesn't always make sense in terms of morale, though. Also, sometimes this imbalance happens because you might not have had a review or your boss doesn't see the value of your expertise and experience. You can arrange a meeting, but base the discussion on the value you bring to what you are doing and see if he can help you set goals to reach the next pay level. If you decide to leave, do so with notice. In the long run, staying for pay that is offered once you are leaving doesn't work out. Neither does an ultimatum.

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Q: If you worked for 2 years making 10 dollars an hour can new hire come in at 12 dollars an hour making more than you?
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