The Surprising Aftermath of a Big Raise
Up and down the income ladder, people say more money would make them happier. When they actually get it, that isn’t always the case. Some people who have gotten big raises recently say the money hasn’t changed their day-to-day life or hasn’t provided them as much joy as the things in their life that have nothing to do with money.
Others were hoping for a bigger raise or felt conflicted about making more money. Jess Tapia, a 28-year-old accountant in Hoffman Estates, Ill., thought for years that $90,000 was a salary that would make her happy. When a raise of about $20,000 pushed her pay to that level last February, it did—at first.
To celebrate, Tapia booked a vacation to Germany the next month. The good vibes soon wore off. “By the time I came back from that trip, it kind of fell flat for me because it was just back to normal, back to the routine," she said.
The past few years have been good ones for workers seeking higher pay. Median year-over-year wage growth hit a recent peak of 6.7% in summer 2022, after mostly staying below 4% for more than a decade before 2021, according to the Atlanta Federal Reserve. Many of those who switched jobs, or threatened to, made substantial salary gains.
And people with higher incomes do tend to be happier, many studies show. Research looking at lotteries and random cash giveaways indicates that additional money can make people happier for months or even years. But moving up the income scale, it takes more money to generate the same good feelings, said Jan-Emmanuel De Neve, an economics professor at Saïd Business School at the University of Oxford who studies well-being.
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