On compensating differentials

or, being more intentional

My favorite time to paddle is sunrise. I love putting in while you can still see the stars and being a mile into my route before the light begins to change, and to catch the first rays of the sun coming up over the water. With the days growing shorter, it’s a little more reasonable to be up in time to be on the water for sunrise. I live about a mile from my favorite boat launch, Jackson’s Landing, so if I plan ahead and have all my gear in the truck and my kayak loaded in the rack, I can be on the water in about 15 minutes from the time I walk out my door. This past Friday, sunrise was at 6:15, so I left the house at 5:30 and was on the water by about 5:45, paddling into the day’s beginning. According to the picture’s metadata, I took the above image at 6:37, looking out into Great Bay, toward Goat Island. After I took that shot, I took a leisurely paddle south into the Bay because the mist was still on the water and I was hoping to get a few more shots. I was home by about 8, and in the office by a little after 9. Of course it was a Friday, so I was basically the only one in the office. 

The road that runs parallel to the Oyster River is Route 4. It’s the road we take to get to just about anywhere. In particular, it’s the road we take to get to I-95 so we can head down to Boston. I made a lot of trips to greater Boston this summer to visit students out on their internships. One trip took me down to Norwood, MA, which is on the south side of Boston. Once you take Route 4 to Portsmouth, the trip to Norwood is pretty much all I-95, all the way around Boston. I finished my visit to the site at around 3:30 in the afternoon, thinking I might at least get a jump on rush hour. I was wrong. Without traffic, the drive should take about an hour and twenty minutes. The actual travel time was about two hours and twenty minutes because of traffic. As I crawled my way around Boston in 10 miles per hour, bumper to bumper traffic, I could feel my blood pressure spiking and had to do a lot of deep breathing and “serenity now” mantras dealing with Boston drivers who managed to be aggressive even as we were barely moving. The thing that struck me as I made my glacial way home was no one had kayak racks on their cars. No kayak racks, almost no bike racks, maybe a few ski racks. It filled me with sadness for these people around me. I cannot imagine sitting in that sort of traffic every day, and not even having the time to go paddle. Of course, when they cut me off, as Boston drivers like to do (mostly for spite, not necessity), I felt less sympathetic. But in the quieter moments, I felt profoundly the Henry David Thoreau quote,

“The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation.”

That’s not to say that everyone who lives in the Boston suburbs (or suburbs anywhere) is living a life of quiet desperation. I hear that some people are able to live fulfilling lives without ever seeing a sunrise over the bow of their kayak. I know, it’s hard to believe, but I have heard it. It’s probably on the internet somewhere. I am just saying that if I had to commute an hour each way in grinding traffic, I would die a little every day. As Thoreau also says, “The price of anything is the amount of life you exchange for it.” That would just be too high of a price for me. 

Economists use the term compensating differentials to refer to the differences in wages that arise to compensate workers for the non-monetary characteristics of different jobs. Take two jobs with roughly the same skill level: retail vs. landscaping. Which pays more? In the same labor market, probably landscaping. Why? It’s harder work. You’re outside in all kinds of weather, it’s physically demanding, and there is a greater degree of danger (lots of machines, sharp tools, etc.). Of course in retail you are potentially dealing with the occasional irate customer, but most of the time you are in a temperature-controlled environment making small talk. Other differentials might include things like how closely your time is managed. For example, TLW is a certified public accountant (CPA). She has to report her work each day in 15-minute increments so that the firm can bill (common in accounting and law). While no one is standing and watching her work, the partners she works for definitely are paying attention to those 15-minute increments. Primary care doctors I know regularly complain about the 15-minute visits they have to keep up with. Even within the same industry and same kind of job, there are differentials across organizations. Most people would be willing to work for less if they had a great boss and would need to be paid more to work for a grouchy, mean boss. 

College professors are not highly compensated. Let me just put that out there, in case you weren’t already aware. I’m not complaining - but if you are looking to get rich, this is not the vocation for you. And of course, even among college professors, pay varies depending on your specialty. Engineering professors make significantly more than English professors. That said, the median professor makes a little more than a high school teacher, a little less than an entry-level nurse or police officer despite being overeducated. And yet the competition for professor jobs is pretty fierce. Why? Well, the total compensation for the role isn’t just the wages. It’s also the freedom and flexibility. Like, I felt like going for a paddle on a Friday morning and rolling into the office mid-morning, and no one cared. In fact, I could have just decided to work from home that day, or mostly not work that day for that matter, and no one would have said anything to me (or even known). While the wages are modest, the compensating differentials associated with the role are very generous. With a few hard limits, like when my classes meet and the occasional faculty meeting, I come and go mostly when I want, I work from home when I want. I create my own research agenda within a broad set of parameters, use methods that I like. I select the textbooks I use for my classes, I choose the teaching methods and approaches. For the most part I choose what service I will take on to support the department, college, and university. In other words, I have a great deal of say over my work, unlike if I had chosen to go back to industry when I retired from the Army and become a financial analyst at a hospital or an insurance company, or joined some consulting firm like many of my former colleagues did. I would have made a lot more money, but at the cost of my freedom. 

Now, I was telling TLW about this post and how I was going to talk about all my freedom and all that. And she was like, “But you literally work every day and most nights. You are always working. You brought your laptop to London so you could work.” So don’t let me blow too much smoke. When TLW files her billable hours at the end of the day, she’s done until the next day. She likes that. She works long hours during tax season, but otherwise doesn’t work on the weekends or at night. I don’t know that I work a lot more total hours than she does, but I do spread it out because I can. Also, what qualifies as work for me is different. This post is work. In part, it is me refining my thinking about compensating differentials, a topic I teach about. But this is also fun for me. Most of my work is fun. TLW likes her work, but she doesn’t do tax returns on Sunday mornings for fun. There is a qualitative difference.

Compensating differentials is a useful concept for each of us to think about and be able to articulate. We all need to earn enough money to live the lives we want to live. Maybe that means living in the suburbs and living a kayak-less life of slogging through traffic, grinding away at an 8-5 job (or more), and having little or no freedom. Of course, those people may look at my life and feel bad for how poor I am, and how I drive a late model car, wear cheap, off-the-rack suits, and I cannot jet off to the Azures for a beach vacation on my two weeks of annual vacation. Regardless of where you sit on these choices, being able to articulate the trade-offs you are making in terms of wages and compensating differentials can help you be more intentional about your choices. Being intentional and true to yourself is what matters. What you do not want, regardless of your choices, is, as the Talking Heads sang, 

“And you may say to yourself, ‘My God, what have I done?’”