Bil Browning

Open thread: $50k or $100k?

Filed By Bil Browning | September 27, 2009 1:00 PM | comments

Filed in: Living
Tags: open thread, psychology question

Here's an interesting question overheard on the radio last night.

Which job would you rather have?

  • A job where you make $50k/year and everyone else makes $20k/year
  • A job where you make $100k/year and everyone else makes $200k/year

Me? Easy question. I'd take the $100k job. It's twice as much money as the other one plus I know that before long I'd be making $250k; I tend to advance through the ranks quickly in corporate settings.

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That's a trick question. It depends on current market conditions for your skillset.

If your skillset is worth 50k and you're being paid 50k for it while everyone else is making 20k, it means you're going to get laid off because you're being paid too much and you overvalue the worth of your skillset.

If your skillset is worth 100k and everyone else is being paid 250k, your company will go bankrupt because it's overpaying the current market price.

Either way, you're screwed.

it all depends, of course. But if "everyone" means really everyone, I'd rather be paid 50K b/c then I'd have a standard of living 2.5x greater than everyone else.

um... actually, its a moot question to me.
My real life question was:

A job that would pay $250k for 6 months that would finance SRS and everything else. But the prior 3 people who had the job also had an average life expectancy of 3 weeks. (sandbox work)


A job that pays only $60k a year, but its work that I love doing.

Its better for me to be alive, then I can save up and get SRS when I can. Being dead doesn't pay.

It's a big fish/small pond scenario. you would technically have a higher standard of living with $100K but you would be worse off relative to everyone else. Generally, people are happier when they are better off compared to those around them. If all of your friends are rich, you feel poor for not having a second house. If your friends are poor, you feel rich for having a house instead of a trailer. This question (the way i've always interpreted it) is to see whether you value objects in themselves or relative to others. I'd take the 50,000, btw.

How about just having a job? I could care less about the pay because as long as I'm not paying them to work there then I'm still coming out better than I am now.

This question isn't about money it's about status and the way you want define yourself in society. You could substitute houses, cars, education, really anything.

It depends...

If by "everyone", you mean literally everyone, then I would want the 50K because you would have higher purchasing power. The market would be in equilibrium for the median 25K salary, so 50K would mean you basically earn what 2 people make.

Else, if "everyone" means at your place of employment, then I would take the 100K. You would have twice the purchasing power as your next best choice which would be the 50K. This is assuming the median salary is at the current level in the country you live.

Hmm, I imagine it's not possible for "everyone" to be literal. If literally everyone made $20K or $200K, then you would too -- a hypothetical I would be perfectly happy with. So assuming that there's some kind of qualification there (everyone in your field, everyone at your company, everyone in your neighborhood, etc). I'd prefer the larger amount. Even if my purchasing power in my neighborhood wasn't as much, I could still save up for a couple years then move somewhere more to my liking.

First, I'm presuming that both jobs involve doing something that is reasonably enjoyable, worthwhile and rewarding. (Inspecting septic tanks for $100K a year is not my idea of a great job, although I might do it if I were desperate enough.)

I'd take the $100K job, presuming that I could find a good mentor or two who would coach me at getting up to the $200K level. Then I'd be OK for now, with something to work toward. But if that work environment was full of people trying to keep me down, or even a cut-throat place where everyone works to get everyone else fired, then No Thanks.

By the way, do either of these jobs include a good health care plan?