It is an underappreciated fact that the compensation you receive from a job is not only monetary. It’s easy to be surprised when you learn the modest amounts people make for otherwise prestigious jobs. What should actually surprise you is that there is a direct connection between these two things.
The Joy of Work
Consider the work you do. If you love your job, and particularly if you love that type of work more than anyone else you work with, would you keep doing it for a modest pay cut? Really think about the answer to this question. I’ll wait.
For most people who love their jobs, the answer to that question is yes.
If you hate your job, consider an alternative line of work. Consider the job that you would do if you could no longer do your current work, or the job that would bring the most delight to your daily life. Does that job pay less? For most people, the answer to that question is also yes.
The reason for both of these is because delightfulness is part of what you are being paid. And when you aren’t paid in delight, you are instead being paid more money for your misery.
Relatedly, rather than being paid in joy, sometimes people will be paid in social prestige. Many jobs that people perceive as prestigious achieved that halo because they are either socially laudable (e.g. teachers) or highly compensated (e.g. lawyers or dentists). In reality, jobs that provide a lot of prestige would have to pay more if they were less prestigious. By paying people prestige, you can pay them less money.
A recently popular reddit post asked the simple question what’s a job that pays way less than most people think? Let’s review a hastily cherry-picked selection of the top comments to understand the phenomenon I’m pointing at:
Chefs / Pastry Chefs (Delightful): Lots of people love cooking or baking (including me!) and they think that means that it would be a good career. Unfortunately, based on the basic principles of supply and demand, this leads to more people wanting to be chefs than one would see if it didn’t look so fun. Too many cooks spoil the market for restaurant labor.
“99% of jobs on film and TV” (Prestigious, Delightful): Jobs in the entertainment industry fulfill fundamental desires that people form at a young age, where they think that they may get the prestige of the most famous actors. Other people are more artistic in nature and they love to exercise their creativity. Either of these things can act as a form of non-monetary compensation, thus lowering the amount of money you can expect to make in these careers.
Pilots (Delightful): Flying a plane is objectively fun, and a lot of people have piloting as a dream job. People pay money to get to fly planes outside of their careers. Because it’s fun and fulfills childhood dreams, you don’t have to pay someone as much to fly a plane as you do to service your port-a-potty.
“Green Rush” Jobs in Colorado (Delightful): Many people desire to work in an industry whose labors they are already enjoying. At first this was a lucrative field when the marijuana industry in Colorado was new and the market had not yet reached equilibrium. But now the people who would love to make their “hobby” a career have created a glut of available labor, lowering the non-monetary compensation available for marijuana growers.
State Park Ranger (Delightful): Who wouldn’t want to work in the forest? Nature lovers, er… love nature, so of course they are attracted to jobs that allow them to spend all their time in the forest. If you had to pay someone who hated nature to be a park ranger, it would cost more than someone who would already love being outdoors.
Cancer Researchers and Professors (Prestigious, Delightful): Many people enjoy doing research that benefits humanity, because it allows them to form a compelling and positive narrative about their life. They may also enjoy the puzzle-like aspects of pure research and the ecstasy of solving completely unsolved problems. Because of this we have people pursuing careers as professors even as we have a crisis of oversupply for PhDs in almost all fields.
Now you, dear reader, appreciate that jobs can be paid in different forms of currency: money, flexibility, power, prestige, fun, and more. What are the concrete actions you should take based on this new-found knowledge, particularly if you are a Silicon Valley technologist?
- If you can program, don’t get a job working for a game company. I mean, it should have been obvious, but just pointing it out.
- If you decide to work remotely, you probably won’t get as much monetary compensation (although structural efficiencies can still net out positive).
- Founders are paid partially in personal-narrative-satisfaction, so don’t expect to, on a risk-adjusted basis, benefit from being a startup founder.
- Don’t invest in your friend’s restaurant or café, and don’t start one yourself. Classic mistake.
Footnotes
Besides those categories discussed, there is another category of examples that were mentioned on reddit as surprisingly poorly compensated. These are jobs which have requirements which are surprisingly low. These jobs require little to no education but have significant or the appearance of significant responsibility. Examples of this include armored car drivers, the guy who mixes Adderall for Shire Plc., or bank tellers. They require only on-the-job training, but based on the description they seem to have access to, or to be protecting, something of great value. This is really a misunderstanding of job requirements and not related to labor economics.
