In preventing wage dissatisfaction, I think it’s better to look at perceived counterfactuals. This can come from being used to a certain wage, or a certain counterfactual wage being very obvious to you. Or it can come from your peers making a certain wage.
You seem to assume something like “people don’t like to accept a wage that is lower than they can get”. I suggest replacing that with “people don’t like to accept a wage that is lower than they feel they can get”.
I know some people that are deliberately keeping their income frozen at 15k so they won’t get used to more. They reason that if they did, not only would they be psychologically attached to that wage, to a lesser extent so would their peers. In some sense they are keeping up a healthy cultural environment where it’s possible to make little and still be satisfied.
Agree looking at perceived counterfactuals can be a helpful distinction.
I don’t see freezing incomes at 15k as a sustainable or scalable solution, at least in the context of harnessing resources to work on the world’s largest problems. But I think this brings up an interesting point about loss aversion and path dependency. I’d argue (and I think you’re doing the same) that people are much more likely to freeze their income at 15k at the start of their careers, but much less likely to do so after they’ve already started earning more and would need to cut back to that level.
Using @dgjpalmer’s experience as an example, I’d guess most of their Ivy League colleagues started off in the nonprofit industry rather than transitioning to it after some time in the private sector. And this dynamic introduces biases like shortages of skills that people pick up in the private sector.
I’ve heard of some organisations that don’t have a fixed wage for a job, but a maximum. They ask their applicants “how much would you need to be satisfied”, and that’s how much they get. I’d expect that this practice, combined with a culture that doesn’t overly discuss income or flaunt wealth, would be the best way to keep everyone satisfied, compete with industry, and still keep the average wage low.
This sounds very difficult to execute well over time, and my guess is that a lot of resentment would emerge. And doesn’t solve selection bias problems, discussed more here.
To the extent that this would cause resentment, I’d interpret that as a perception of a higher counterfactual, which means that the execution wasn’t done well.
Agree looking at perceived counterfactuals can be a helpful distinction.
I don’t see freezing incomes at 15k as a sustainable or scalable solution, at least in the context of harnessing resources to work on the world’s largest problems. But I think this brings up an interesting point about loss aversion and path dependency. I’d argue (and I think you’re doing the same) that people are much more likely to freeze their income at 15k at the start of their careers, but much less likely to do so after they’ve already started earning more and would need to cut back to that level.
Using @dgjpalmer’s experience as an example, I’d guess most of their Ivy League colleagues started off in the nonprofit industry rather than transitioning to it after some time in the private sector. And this dynamic introduces biases like shortages of skills that people pick up in the private sector.
This sounds very difficult to execute well over time, and my guess is that a lot of resentment would emerge. And doesn’t solve selection bias problems, discussed more here.
To the extent that this would cause resentment, I’d interpret that as a perception of a higher counterfactual, which means that the execution wasn’t done well.