Why people are willing to earn less money to do more meaningful work.
“Meaning is the new money”.
It was a statement by the Harvard Business Review back in 2011, and it’s all the more true now. A wealth of studies have I been conducted on the American worker. The substantiations point to the average worker expecting something more profound from their job than just a paycheck. Since 2005, the importance of meaning has grown as a driving factor in job selection. But this is nothing new; the importance of purpose is ingrained in humanity.
In 1974, Studs Terkel’s Working highlighted this very ingraining. Terkel’s position on meaning was that it was an equal counter-part to financial compensation for motivating the average worker. Of the “happy few” workers he met, they all had the common attribute of meaning in their job. This historical piece of literature highlighted what would become a trend, the search for meaning in the workplace.
It brings us to the importance of freelancing. As a member of the gig economy, you’re in control of what service you provide. Even if you were forced into freelancing, the service you chose likely reflects both your skill-set and passion. It’s a lot easier to find meaning when your job revolves around your love, even if you earn less.
Earn Less, Gain More
It’s relatively common for people to get into freelancing on the side to earn a bit of extra income. But it’s not uncommon for the same people to then quit their cruddy jobs to pursue their freelancing. Once your side-hustle brings you financial stability, it’s an easy – yet scary – choice to make.
You are likely to earn less as a freelancer than you would of if you had kept your full-time job. You’re also not going to receive paid-leave or dentistry or whatever other benefits your job came with. But considering the Harvard Business Review’s latest find, it might not be such a crazy switch:
“More than 9 out of 10 employees are willing to trade a percentage of their lifetime earnings for greater meaning at work. Across age and salary groups, workers want meaningful work badly enough that they’re willing to pay for it.”
You may earn less when you start freelancing. But you are likely to gain more out of life once you do.
The 20% Paradox
Let’s say you earn 20% less in your first year or so of freelancing (compared to when you were employed). That would still put you better off – proportionally – when considering these following alarming statistics.
In HBR’s study of the importance of job-meaning, they also found this:
On average, the American worker would sacrifice 23% of their lifetime earnings in replacement for a job that was meaningful. At The Conference for Women, the HBR also found something alarming. 80% of the attendees would prefer a boss who cared about them finding meaning, rather than a 20% pay increase.
The prominence of 20% here is unignorable. You may earn 20% less when you start freelancing. But across the board, you’ll find disgruntled workers hoping to lose around 20% just for a job with meaning. As you pick the service you provide as a freelancer, you are actively participating in this rule and sacrificing 20% of your income for a job with meaning.
You are also becoming your boss when you’re a freelancer. Hence you have an interest in your success. You’ve chosen this over a 20% higher income, just as the attendees of the Conference for Women did.
Especially when you consider that the average American spends 21% of their income on housing, we can establish that meaning is more important than a roof over your head. The HBR concludes with “the 21st-century list of essentials might be due for an update: “food, clothing, shelter — and meaningful work.“
I also have an article on how jobs can negatively impact your mental health; you can check it out here: Jobs: The Antagonist of Mental Health.