Wednesday, November 04, 2015

Sticky Expectations

'Sticky Wages' is the name for the fact that pay tends to go up, not down. We want our pay to be connected to our performance. Meritocracy and all that jazz. But actually only if the news is good. Would you like it if your boss said, 'Great year, but not as good as last year, so we are going to give you a pay cut.' Bonuses in theory allow the sticky part to be the base, and then anything else is 'extra'. Ummm. Ja. We think in relative terms, and something that excites us or makes us happy often needs to get bigger or more spectacular the next time to have the same effect.

Sticky Expectations

So enter things like redundancy. Being laid off, or not able to find work, must be one of the hardest things that can happen. Particularly if there is a sense of permanence about it. I can't fully empathise, because my close friends, the people am friendly with, and the people who just know my name are almost all employed. That is crazy considering the official unemployment rate in South Africa is 25%. In Britain it is 5%. Amongst the people who's story I know, the figure is probably closer to 0%.

If the rug gets pulled, and it isn't just a case of moaning about your boss not being fair with your raise. Things will get tough. Even if we don't have friends who have experienced running out of money, the idea is pretty frightening. We see poverty. Sometimes we have to just ignore it to be able to function. He harden ourselves. But we (most of the people reading this) don't tend to have to regularly experience cutting back. 

Poverty would be an extreme version. The idea of living on less is also something that is hard. When you are used to certain types of entertainment, driving a certain car, living in a particular area, the idea of cutting back feels daunting. Particularly if it is an independent decision where everyone else in your circle isn't doing the same thing.

By Global Poverty standards, there are virtually no people in the UK living below £10 day. The World Bank set the absolute poverty line at $1.25 (£0.81)/day. In 2013, 1.2 Billion people lived on less than this. Half of them in China and India. The UK is a very wealthy country. Even in a wealthy country, the 2013/2014 HBAI report gave median household income (2 adults) as £23,556. I don't think you are going to feel wealthy earning that. Particularly if you are living in London. You are going to be surrounded by things you can't afford. Things you can't do. In global terms, you have more than enough.

So answering the question 'How much is enough?' is an interesting one. If you are comparing to your last years self. The answer is probably 'more'. If you are reading this, and you are comparing to most other people in the world, the answer is probably 'less than you think'. But only if you can do the mental and emotional acrobatics required to ditch the stickiness.
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