A Job Pays Much More Than a Salary
When comparing two job offers, the first thought that comes to my mind is, what is the difference in pay? Out of all the features of a job, salary is the easiest one to measure and compare. However, it’s very common for humans to overvalue what is easiest to measure. This tendency even has a name: The McNamara Fallacy:
The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can't be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can't be measured easily really isn't important. This is blindness. The fourth step is to say that what can't be easily measured really doesn't exist. This is suicide.
Why is this relevant when it comes to evaluating jobs? Because a job generally involves much more than producing work in exchange for money. A job provides, among other things:
A social environment in which one spends tens of hours every week.
A common goal.
Validation and recognition.
In some cases, a physical space in which to spend time.
An identity that we can use to present ourselves to others.
Examples of these:
Suppose you can choose to work as a systems administrator. You have two job offers: a prison, and a famous film studio. In the first one you will meet security guards, interact with the warden, perhaps see inmates. In the second you will interact with film industry professionals such as writers and producers. Perhaps you will run into your favorite movie stars once in a while. How much better should the salary be for you to consider the prison? The difference is how much you value the social environment in which the job takes place.
Two different choices: software company A, in which your job will be to optimize monetization options for applications that run on your platform. They could charge users, or they could show ads. Software company B, in which you will build a product that helps millions of people breathe cleaner air in polluted cities. This product has the potential to reduce the incidence of asthma among children. It hits close to home, because your brother was one of those children. You both grew up in Bangalore, or in Mexico City. You got lucky and you didn’t develop respiratory issues, but your brother did. Even though he’s in his thirties, he was very close to dying when he caught Covid because of his comorbidity. You really believe that measuring and cleaning the air at home would have made your brother much better off, and this product matters to you. Same question as before, how much do you value the ultimate goal of your work?
Now for validation and recognition: in one case you are asked to remain anonymous. You work from home, nobody knows who you are. You get paid in cryptocurrency. Or you could choose to work for a company in which you come into the office, you are given a senior title, your colleagues respect you for your work. Of course you would sacrifice money to be around people who like you, and think you’re a good professional.
You have to choose between two offices: one is the Googleplex, with on-site massages, excellent food provided by highly paid chefs, a modern gym with every workout machine you may want. Your office has windows, you see a sunny courtyard outside with trees and a soccer field where employees sometimes play. Your other choice is a poorly lit room in a nondescript downtown building. It’s a no-brainer, you could even rationalize the fact that the second office is bad for your health. Throw a commute in there, you can even calculate the life expectancy lost.
You can choose to be the CEO of a startup in Silicon Valley. You have enough funding to pay yourself a livable salary, nothing spectacular. However, your family is proud to tell everyone they know that their child is an entrepreneur, playing in the top league of the world. You go to parties, love telling everyone about how you are the founder of Shmoolky Labs, and how you just closed your seed round of 12M dollars led by Incommensurable Ventures. Or you could choose to make five times as much money working for a porn site. Or for a mortuary. “So, what do you do?” “I’m the… VP of Business Development at Fisher & Sons. We are the third-largest… funeral home chain in the US.”
Why did I write this post? When I sold my last company over a decade ago, it was clear that I no longer needed to make money. However, I was not sure what to do next. Over the subsequent years I tried a number of activities, including some that I would call traditional jobs. Because money wasn’t a real consideration, I had to evaluate the other aspects I mentioned. So if there is anything I want to convey is, don’t be a victim of the McNamara Effect. The opportunity cost of accepting the wrong job is horrendous, because it’s not like a pair of shoes that you can return after a week. You are probably stuck there for a few months, perhaps a year. Hope this helped, and happy job hunting.