On Salaries: Why We Want More Money
Apr 21st, 2009 by Nut
I’ve written about the importance of salaries before and the role they play in our lives. We pretty much take it for granted that we always want more money. A higher salary is just one of those things everyone wants.
But why is that? To buy more stuff? Is it because we think it’ll make us happier?
And why do we want more money even in cases when we’re making WAY more than we thought we ever would at a certain job?
Well, right now I’m reading an interesting book that looks at how we make decisions called Predictably Irrational, and it offers up an answer: relativity.
Not the kind that made Einstein famous, but the idea that we don’t look at our salaries in a vacuum. We look at them in the context of our co-workers’ salaries. In the book, there’s an example of a guy going into the office and asking for a raise. His boss, a little miffed, asks him what he thought he was going to be making at the job when he first started. He says something like $100,000. But the dude is now making well above that, around $400,000. So the boss asks the guy why are he’s so unhappy with his salary when he’s making so much more money than he ever thought he would.
His answer? Because Ted, who sits next to him, makes $410,000. And he thinks he’s “better” than Ted.
Sound ridiculous? Think about your own job for a minute. Pick one person at your job that you think is useless. The person that drives you nuts because having that person around is like carrying around a huge sack of potatoes—it’s just a bunch of dead weight. And let’s say you somehow find out that person makes the same as you do or—gulp—even more. How would that make you feel? Compensation is how your bosses assign value to you and the job you do, so this means that, in their eyes, you and this “useless” employee are worth the same.
I don’t know about you, but I’d be pissed off. That’s why I think knowing/worrying about your co-workers’ salaries is a bad idea.
But that’s easier said than done, right? We’re human—we can’t just turn that part of our brain off and pretend it doesn’t bother us. And the book I’m reading offers up an interesting solution.
Sure, you could march into your boss’ office and demand a raise. But “I’m better than Ted” isn’t a great argument. Instead, Dan Ariely—the author of Predictably Irrational—advises us to hang out with people who make the same or less than we do. Socialize with them, chat with them, sit next to them, etc. Why? Here’s why:
If you’ve never seen this before, here’s the deal: both orange circles are the same size, they just don’t look like it because of relativity. What Ariely is trying to tell us is that one effective way of getting your salary rage under control is to be the circle on the right. And this applies to all kinds of stuff.
Make it so your circle of friends makes what you make (or less), is less attractive than you (a wingman that looks like you but uglier is ideal), and just overall makes you feel like the better person. Sound stupid? It can be, but when it comes to the salary stuff he may have a point.
You can’t change someone else’s salary—but you can pick the people you decide to hang around with, and that can make all the difference.
Photo by Lanuiop
Is that your wife? Is that how you were able to get her by giving her money to marry you?
Oh dear.
Are you seriously suggesting we make friends with people because of how much money they make? Or don’t make?
really?
oh dear.
Do people actually do that?
On the other hand, there’s a study around that says you will generally earn a salary equivalent to the average salary of your six closest friends. So by choosing friends who earn less than you, you may be willing your salary to decrease…
Mostly, I don’t know how much money my friends make. It doesn’t often come up in conversation.
Hey kazari, I don’t mean “make friends” with people based on how much money they make. I mean hang out with or even surround yourself with certain people at work instead of others.
Nice point about having your salary decrease if your friends make less, but I suspect it has more to do with you becoming close with people that make the same or less than anything else. Could you really see someone that makes double what you make becoming your close friend?
I think it’s equally likely that I’ll make friends with someone who earns twice my salary, as half of it.
I think I have friends that fit both those criteria.
I think at work, it does not make career sense to only hang out with those who earn less than you.
I think in my personal friendships, I would never choose to hang out with someone because they earnt less than me, or made me feel a better person. The whole idea gives me the willies. I hang out with people because they are good people, and we have fun together.
In response to your problem, of wanting similar salaries, I think you’ve got the question wrong. I don’t think the dollar value matters – it’s either the prestige (competition with coworkers) or lifestyle envy (competition with the neighbours).
I think the solution is to make sure the money you earn, and the money you spend, are in line with your values. Then everyone elses’ spending habits are irrelevant.
hmmph. sorry.
didn’t mean to write a novel.
I think we’re probably both on the same side of this argument. The guy in the book is throwing this idea out there as a way to use relativity for our own benefit.
And I love that you’ve got “the willies.”
Classic!
Nut, you make to much money so I do not think we could ever hang out.
I like the relativity argument. If you have mostly friends who can afford to spend a lot more than you can, it’s not hard to find yourself in a position of trying to or wanting to keep up. That can lead to dissatisfaction with your salary, your possessions, your investments…list could go on. Also potentially to high debt as you attempt to keep up. Your diagram is a good tool I think for understanding how earning and spending make us feel. Once you understand the root of your emotional issues around money you have a better chance of being in control of your money. I’m putting the book on my reading list!
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