Why some people are never satisfied salaries – 05/28/2023 – Market

Sam works in finance at a private equity firm. Last year, he received a base salary of around US$200,000 (about R$1 million, or R$83,000 a month), plus a bonus close to US$100,000 (about R$500,000). .

Sam’s last name is kept confidential for professional security reasons. He is 34 years old and lives in New York, in the United States.

There, the average household income is around US$70,000/year (about R$350,000, or R$29,000 per month). His apartment is in Manhattan’s Tribeca neighborhood, often listed among the most expensive areas in the city.

He travels with friends several times a year, eats out at restaurants several days a week, and still manages to save part of his monthly salary. He himself admits that his salary is “high”.

But for Sam, for some reason, it never seems to be enough.

“I understand that — relative to the country as a whole — I’m obviously part of the upper crust, income-wise, and I recognize that I’m very privileged,” he explains. “But at the same time, I can never imagine not wanting to earn more than I already do. I guess it’s just human nature.”

Sam may have his share of the point.

Yes, companies are raising wages amid current economic conditions such as inflation and labor market difficulties. But experts say pay increases may never be enough to satisfy certain professionals — especially knowledge workers (those who primarily use their knowledge, information and intelligence to do their jobs). They simply always want to earn more.

Indeed, scholars argue that many people who already earn salaries in the upper reaches of the national median income are unlikely to ever be fully satisfied with the money they are earning.

relative question

One explanation why individuals like Sam don’t seem to be satisfied with the comparatively high salary they currently pocket is the fact that human beings are inherently conditioned to compare themselves to others. And the others usually belong to a small, select group with whom they interact on a daily basis.

“We only compare ourselves to our immediate reference group, not the general population. So even if a person is in the top 1% of incomes, if all of their close friends or professional colleagues are in the same range of income, she only compares her wealth with these individuals”, explains Danna Greenberg, professor of corporate behavior at Babson College in Massachusetts, in the United States.

“In this comparison group, there is always someone who has more, who earns more and who makes the individual feel the need to earn more,” she says.

Greenberg points out that another factor at play is ego. “Many individuals, particularly in the United States, more men than women, consider their earnings an indication of their own worth and their own importance,” she says.

“If your reference group is just other high-earning people, you feel less important in relation to your reference group if you believe you earn less,” continues Greenberg. “The individual’s ego will lead him to want to be better or equal to his partners, which will lead him to need to earn more.”

Sam agrees. “When I hang out with my old high school classmates who usually work jobs that pay less than mine, I certainly feel better about my salary,” he explains. “But as soon as I get back to work or hanging out with my co-workers, that changes.”

What exacerbates the two factors Greenberg mentions is that talking about salary has historically been taboo, according to New York University psychology professor Tessa West. She says that while the culture of salary secrecy still prevails in many companies, more and more professionals are quietly having very frank conversations about their salaries.

“New pay transparency standards have crept into the workplace, and that’s certainly a good thing,” says West, “but it also makes it easier for people to compare.”

endorphin injection

Brendan works in Manhattan and he doesn’t think he’ll ever be happy with the money he makes either.

He is 32 years old and, in 2022, earned around US$150,000 (about R$750,000, or R$62,500 per month) working in a bank.

“Certainly, pay raises are great, but will I ever get to the point where I can categorically say ‘yeah, I’m super happy with the money I’m making and I don’t want to earn more? Probably not.”

He claims that getting a pay raise makes him look forward to the next leap, because he’s already seen that it’s possible.

“You really get a little — sometimes a big — endorphin rush when you get a raise or a promotion, and I think that’s kind of addictive,” explains Brendan.

Sam agrees, and also acknowledges that getting a raise one year and not the year after—or getting a raise one year and a much smaller one after that—is particularly difficult.

“I think it’s probably because I’m in that situation, not only are you comparing yourself to others, you’re also comparing yourself to the year before, and it can be quite unpleasant if you feel like you’ve regressed in some way,” he explains.

He thinks that, in large part, the reason he always wants to earn more is probably because he tends to look to the value of his payslip as a direct measure of his personal success.

“I believe that you simply must be more and more successful as you progress through your career,” he explains. “You must accumulate success, so to speak — and perhaps I am simply equating my income level with that success.”

Tessa West also explains that the desire to always earn more can be understood in terms of lifestyle improvement, with rising income bringing increasingly expensive lifestyle choices and preferences.

For her, perhaps the impatience of professionals with their salaries is permanent — and, with each salary increase, they get used to a more expensive lifestyle, which will bring the desire to earn even more.

This text was originally published here.