Money doesn't actually exist.
This statement might sound funny coming from the guy who is constantly urging CEOs to pay their employees more. Sure, money exists in that we can hold paper bills and silver coins in our hands, and watch the numbers on our bank statements rise and fall. But the value of money is essentially imaginary. Its only value exists in what we as a society assign to it. And, unfortunately, we tend to assign it way more than it's actually worth.
Back in 2015, when I announced that our company would be instituting a $70K minimum wage for all employees, something odd happened. While most people were thrilled by the announcement (especially those who were previously making less than $70K), two people, both of whom had been earning roughly $75K annually, quit. Even though they were previously, by all accounts, satisfied with their salaries and would see no decrease in pay or benefits under the new policy, they didn't feel it was fair for others' pay to increase while theirs remained the same. One person told me she felt like she had been "hazed" because she had to work her way up to her current salary, thereby implying she felt that her coworkers should have to be hazed as well.
These two employees weren't the only people who criticized the idea. Plenty of conservative pundits accused me of being a socialist. The fact that they used this term derisively clearly illustrates their beliefs about how salary should be calculated. To them, how much you are paid should correlate to the amount of value you contribute to society. The harder you work or the more valuable that work is, the more you deserve to be paid. In other words, money is the yardstick by which we can measure the worth of ourselves and others.
But this thinking is inherently flawed. For one thing, you could argue that the most "deserving" workers--those who work the hardest and/or those whose work benefits society the most--are rarely the highest paid and that many people get paid a lot to do relatively little. But for another, using money to measure success requires a fundamental misinterpretation of what money is.
Humans invented money because we needed a way to allocate resources efficiently. By agreeing upon an even means of exchange, the bread maker could buy shoes without having to consider whether the cobbler wanted bread. And by accepting a fungible asset in exchange for his shoes, the cobbler could then use that money to buy shoemaking supplies or steak to feed his family or beer to relax at the end of the day.
Money is only valuable because it gives us access to things, like bread or shoes that we need or want, or to having new experiences or the ability to give back. If we had ready access to everything we could possibly need, we'd have no use for money. And yet the vast majority of us pursue money as its own reward, even after we have enough to obtain the goods and services we need. And, of course, the vast majority of the world's population doesn't earn enough money to meet their most basic needs. But 82 percent of the wealth created in 2017 went to the top 1 percent of earners in the world. What real value--besides a perceived one--could this money possibly have for the richest men and women in the world?
The answer, of course, lies in human nature. When deciding whether to increase the base salary at Gravity, I chose the $70K figure after reading research by economists Daniel Kahneman and Angus Deaton that shows that one's emotional well-being does not tend to increase once they start earning $75K or more per year. This research has been widely cited, but the study also showed that, while our emotional well-being, defined by the frequency and intensity of experiences such as joy, stress, sadness, anger, and affection; what we might also call "happiness", stops increasing at this salary point, our life evaluation--meaning how we perceive the quality of our lives--continues to increase as our salary does. In other words, as we make more money, we continue to evaluate our lives more positively even though that money is not providing us any real value.
Knowing this, I begin to understand why the two Gravity employees decided to quit after the $70K decision. Suddenly they were, by their own evaluation, comparatively less better off than they were when certain coworkers were earning substantially less than they were. Although Kahneman and Deaton didn't consider comparative/relative income levels in their study, based on our own observation and experience, we know that part of how we evaluate our lives is through comparison with others. Our lives may not be perfect, but as long as someone is worse off than we are, we are doing relatively okay.
Why do we do this? Why do we, despite knowing the limitations of money, continue to use money as a barometer for our success?
It's part of human nature to want to evaluate our lives. Knowing that our time on earth is limited, we are faced with the possibility that, perhaps, our lives don't matter at all. And so we strive for meaning beyond ourselves, a reason to keep going in the face of oblivion. The Bible tells us that "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." Even outside of a Christian context, this verse holds a lesson. If "the kingdom of God" represents meaning beyond ourselves, an existence beyond the one we have on earth, we know we will never attain it if money is our sole pursuit. We must find some other way to measure ourselves beyond dollars and cents, but this is much more difficult than we care to admit. It's easy to look at a number on a pay stub and say, "I'm better off than I was last year" or "I'm doing better than my neighbor." It is far more difficult to assess ourselves using a metric that can't be so easily quantified.
We do ourselves a disservice by evaluating our lives through money and not a more complex target. We set ourselves up for a life in which we pursue something that, after a certain point, will not make our lives better and may, in some cases, even make it worse. For, as the Bible also tells us, "Money is the root of all kinds of evil," not because it is bad (it isn't), but because it distracts us from the things that really bring our life meaning. We need to challenge ourselves to value things like love, relationships, connection, justice, experience, charity, wisdom, and self-worth--things that are difficult to measure but that add real value to our lives. By doing so, we will edge out the primacy of money and direct our lives toward worthier pursuits, toward the things that actually exist.