Really? Workers Gladly Forgo Wages?

The Perils of Benchmarking Job Conditions and Benefits Against Employee Pay. (Good jobs and good pay aren't mutually exclusive.)

Have you noticed business media banging the drum about workers’ willingness to accept less pay in exchange for certain benefits?

• News outlets trumpeted a poll that found workers will take an 18% pay cut to continue working from home or, as CBS put it, “for the privilege of skipping the office.” A Business Insider headline advised that 55% of workers would accept a lower-paying job to maintain remote work, though the WaPo poll it was recapping emphasized, “Pay is still a top priority.”

• In the UK, all corporate eyes were on survey results showing that two-thirds of British workers would fork over nearly 10% of their pay for more flexibility and a shortened workweek.

• In small print, a 2019 MetLife survey whitepaper noted: “3 in 10 employees… would actually be willing to trade a higher salary for better benefits.” The Ladder reframed this with the jubilant headline, “Study: 30% of Employees Would Take Less Salary for Better Benefits.”

• A Harvard Business Review article, citing a coaching company’s data, raised the table stakes: “On average, our pool of American workers said they’d be willing to forego 23% of their entire future lifetime earnings in order to have a job that was always meaningful.”

I expect this kind of logic from B2B marketers. Shhh!… A benefits administration company’s blog post said the quiet part out loud:

“18 Affordable Benefits to Offer Instead of a Raise.”

Their list includes potlucks, trivia nights, and birthday celebrations. You’ll need those workplace birthday celebrations once you’ve been evicted because you traded your “entire future lifetime earnings” for a job that’s always meaningful.

“Hell No”

Undoubtedly, some workers would accept less pay in exchange for a better job situation, especially for work-from-home arrangements and shortened workweeks.

I've been struck, however, by the frequency of interactions with workers who say, “Hell no. I’m not taking a pay cut for anything!”

Indeed, in sharp contrast to the notion that workers are itching to sacrifice pay, reports suggest that 62% of Americans live paycheck-to-paycheck. If that’s the case, or if we can’t come up with $400 to make an emergency payment (a stat that’s consistently exaggerated, but undeniably many people don’t have an emergency fund), how can we possibly be so willing to give rebates to our employers?

A Trade-Off Between Benefits and Wages?

Is pay the topmost priority for workers, or is it — as many would have us believe — just a random bargaining chip in the compensation pie? Clues are found in Cornell’s Labor Action Tracker, which identifies the leading causes of work stoppages…

That’s pay at the top of the list… by a wide margin, far above even scheduling and job security.

As a conversation starter, I ran rough-hewn polls on LinkedIn and in an online forum of restaurant servers (waitpersons and bartenders) to assess pay as topmost priority:

Why do business media, and the world-of-work influencers who follow them, insist on benchmarking favorable job conditions against worker pay, as if the two are mutually exclusive?

It’s tempting to conclude that zero-sum is the only language business understands: “If we improve work-life balance, we have to pay workers less.” In my experience embedded in HR departments of large profitable organizations, however, I found this is not how decisions are made.

Though employers’ allegiance to “win-wins” rings hollow, work-from-home arrangements (apart from regional cost-of-living considerations), shortened workweeks, meaningful work, and better benefits aren’t usually counterposed to wage reductions — even in cases like job security/layoffs, where perhaps they should be.

(In the US, employer-sponsored health insurance may be an exception, with mixed evidence showing a complex relationship between medical benefits and wages. Inarguably, workers do, one way or another, bear the burden of rising health care costs.)

A Twisted Conclusion

Sure, a trade-off between benefits and wages may surface for workers in a position to consider new employment.

One of the few rigorous studies examining how we assign monetary value to job conditions and benefits was first published by the National Bureau of Economic Research in 2018¹. The researchers argued that measuring willingness-to-pay for specific job benefits and conditions — like schedule flexibility, remote work, physical demands, pace of work, autonomy, paid time off, teamwork, learning-and-development opportunities, and meaningfulness — delivers actionable insights.

The study was complex, delving into theory and data extrapolations to better understand how job compensation, now often called total rewards, is distributed across various populations. But these intricacies didn’t stop Bloomberg from summing it up with the simplistic headline, “Americans Are Willing to Forgo a 56% Pay Raise for Best Job Perks.” Alert readers will immediately call bullsh*t, if for no other reason than because no Americans are being offered 56% raises.

While it sometimes makes sense to measure benefits in dollars, providing relatable context to both employees and employers, insisting that “workers will accept this pay cut for that benefit” is twisted.

Julian Barling, an icon of scholarship on employee wellbeing and leadership, and Nick Turner recently wrote “Beyond the Paycheck: The Key to Building a Thriving Workplace Goes Beyond Salaries,” explaining how conventional salary structures rooted in pay-for-performance, secrecy, disparity, and time-is-money ideology hinder business outcomes and employee wellbeing.

They write:

As business scholar and organizational consultant Ed Lawler noted almost 30 years ago — a situation that remains largely unchanged today — many organizations invest significant time in giving minimum financial rewards to employees in hopes of improving performance. However, Lawler found this approach rarely yields substantial positive outcomes.

The business world’s insistence that satisfying jobs can only come at a financial cost to workers serves primarily to defend and reinforce a flawed system designed to provide employees with as little as possible. Talking up how much pay (real or imagined) workers are willing to sacrifice essentially is tantamount to talking down wages.

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1. Maestas, Nicole, Kathleen J. Mullen, David Powell, Till von Wachter, and Jeffrey B. Wenger. 2023. "The Value of Working Conditions in the United States and the Implications for the Structure of Wages." American Economic Review, 113 (7): 2007-47