Last year, Sam earned a base salary of about $200,000 (£159,000), in addition to a bonus of close to $100,000, working in the finance industry at a private-equity firm.
The 34-year-old lives in New York City, where the median household income hovers around $70,000 (£55,500). His apartment is in the Tribeca neighbourhood of Manhattan, which is frequently at or near the top of the most-expensive areas in the city. Sam takes trips with friends several times a year; he eats at restaurants many times a week; and all the while, he manages to save some of his monthly paycheque.
By his own admission, his salary is “high”. But for Sam, whose last name is being withheld to protect his job security, it somehow never feels high enough. “I understand that – relative to the whole country – I’m obviously part of the upper crust in terms of income, and I appreciate that I’m very privileged. But at the same time, I can’t ever imagine not wanting to make more than I’m getting,” he explains. “I’d imagine it’s just human nature.”
Sam may be onto something. Yes, employers are kicking up wages amid current economic conditions, including inflation and a tough job market. Yet some experts say pay boosts may never be enough to satiate some workers, especially those in knowledge-work positions, who simply want to keep climbing. Indeed, academics say that many people who already earn within the top few percentiles of the average national income are unlikely to ever feel fully satisfied with how much money they’re making.
One explanation for why individuals like Sam can’t seem to be content with the comparably high level of pay he’s currently pocketing is that humans are inherently conditioned to compare themselves with others. And those others usually belong to a small select group with whom they interact daily.
“We only compare ourselves to our immediate reference group, not to the broader population. So, just because someone might be in the top 1% of earners, if all their close friends or close professional colleagues are in the same income bracket as them, they compare their wealth to those individuals only,” explains Danna Greenberg, professor of organisational behaviour at Babson College in Massachusetts. “In this comparison group, there is always someone who has more, is earning more, and that drives an individual to feel the need to earn more.”
Greenberg says that another factor at play is ego. “Many individuals, particularly in the United States, and men more than women, equate their earnings as indicative of their self-worth and their self-importance,” she says. “If your reference group is only other high earners, then you feel less important relative to your reference group if you believe you earn less. An individual’s ego will drive them to want to be equal to or better than their peers which will drive their need to earn more,” she says.
Sam agrees. “When I hang out with people I went to high school with, who generally work in jobs that pay less than mine, I definitely feel better about my salary,” he explains. “But then as soon as I’m back work, or back hanging out with people who I work with, that changes.”
What’s exacerbating both the factors Greenberg mentions, explains Tessa West, a professor of psychology at New York University, is that talking about salary has historically been taboo. And even though a culture of pay secrecy is still prevalent in many organisations, an increasing number of workers are now comfortable having very candid conversations about compensation, she explains. “New norms around pay transparency have infiltrated the workplace, and that’s definitely a good thing – but it also makes it easier for people to compare themselves.”
An endorphin hit
Brendan, who works in Manhattan, also doesn’t think he’ll ever be happy with how much money he makes. Last year, he earned about $150,000 working for a bank. “Sure, pay rises are nice, but will I ever get to a point where I can categorically say, ‘yes, I’m super happy with the money I earn and don’t want to be making more'? Probably not,” says the 32-year-old.
He says getting a pay raise tends to make him hungrier for the next salary bump, because he’s seen what’s possible. “You definitely get a little – or sometimes big – endorphin hit from getting a raise or a promotion, and I suppose it’s just sort of addictive.”
Sam agrees, and also acknowledges that getting a raise one year and not the next – or getting a raise one year, then a much smaller subsequent one – is particularly tough. “I think that’s probably because in that situation, you’re not only comparing yourself to others, but you’re also comparing yourself to last year’s you, and that can be pretty unpleasant if you feel like you’ve somehow regressed.”
Largely, he says that he thinks the reason why he always wants to make more is likely because he tends to consider the dollar amount on his paycheques to be a direct gauge of personal success. “I think I believe that you’re just meant to be more and more successful as you progress through your career – you’re meant to amass success, so to speak – and perhaps I’m just equating the size of my income to that success.”
Tessa West also explains that the desire to always earn more can be understood in terms of lifestyle creep, where additional income leads to increasingly expensive lifestyle choices and preferences. Ultimately, says West, it may just be the case that workers will always be restless about their salaries. And with every pay rise, they may get used to a more expensive lifestyle, which will trigger a desire to earn even more.