Perpetual Consumption: Work/Life Balance Gone Wrong

Are you addicted to spending? You may not think so, but here's how you might be.

For those of you who have taken an economics class, you may recall what an opportunity cost is. For those who haven’t, an opportunity cost is the best alternative we did not choose. For every choice we make, we could have chosen something else, and that ‘something else’ was the opportunity cost of choosing what we did. For example, if we chose to have cake, then the opportunity cost might be ice cream. It is a concept that is used to help us decide between two or more options, helping us choose the option that is of highest value or utility to us.

Theoretically, understanding opportunity costs should help us choose the best options possible, leaving us the most satisfied with our decisions. However, when you consider the money we spend to pay for those choices (in the case of purchasing decisions), an interesting dynamic arises that causes some of us to be caught in perpetual spending patterns. Let me explain.

For simplicity's sake, let's assume there are two types of income-producing workers: workers who enjoy their work and workers who do not (regardless of the actual wage they earn). Comparing these two workers, the one who enjoys their work is getting the utility (or relative satisfaction) of their wage plus the utility of doing their work, while the one who does not enjoy their work, is getting the utility of their wage minus the utility of their work. People who derive satisfaction from their work may be willing to be paid a lesser rate compared to those jobs that are not satisfying, but have a higher wage. Workers in Fort McMurray for instance have higher costs of living but are compensated by higher wages.

So how does this philosophy hold up? Who is better off?

To answer this, we need to consider how satisfaction is derived and how money is spent. Satisfaction from the experience of working is an immediate feeling whereas any satisfaction from a pay cheque is delayed until pay day and usually only felt when that money is spent.

For every dollar we spend, we receive some utility for the products or services we get from that dollar. So can money buy happiness? It depends on how that money was earned.

If we internalize the utility of how we produced that dollar for each time we decide to spend a dollar, then we can see the real dynamics of our consumer decisions. If our two workers are paid the same hourly wage, the dissatisfied worker will have to consume more to reach the same overall utility as the satisfied worker. (Think of the times someone you know buys a nice big gift for themselves after working really hard and feeling deprived... and then ask why should even feel deprived from work in the first place!) Even if the dissatisfied worker is paid more per hour, their dissatisfaction from working will lead to a higher rate of consumption to compensate (and they will use their increased earnings to pay for it).

The ugly truth to this dynamic is that those who are motivated to work for financial reasons and benefit less from work satisfaction, feel more inclined to spend their hard-earned money to gain satisfaction. Worse off, if they consume more, upward pressure is put on the need to earn more money, and since earning that money is done in a dissatisfying manner, more consumption is needed to offset the negative utility; thus, creating a never-ending cycle of work... spend... work. I refer to this as perpetual consumption, a condition where no amount of consumption is ever satisfying.

This seems rather unsustainable, given human desire for upward mobility. Taking this further, let's assume the worker who does not enjoy their work is trapped in a career they can't escape (at least temporarily without some re-training). This would mean that there is a good chance they will work more often to pay for all the material things they have bought that supposedly makes them happy.

How many times have you encountered that situation, where you promise to work extra shifts to pay off that brand new TV you bought? Working more often means less time at home with family or volunteering in the community, which are strong social indicators for a healthy vibrant society.

When we ignore intangibles such as worker satisfaction, quality of work/life balance, and transferable skills training, we contribute to the erosion of a society's ability to sustain itself.

In fact, Albertans spend more time working than the rest of the country (39 hours/week compared to the national average of 36.8 hours/week, Statistics Canada, 2008) and not surprisingly, have the highest retail spending per-capita of all the provinces in Canada.

It is not easy to be comfortable with what we have, as many of us feel like we need to ‘climb the corporate ladder’, ‘join the rat race’ and ‘move on up’. We have a social stigma that tells us that more is better. Corporations, public institutions and even entire economies set goals and objectives that reward continual growth, rather than the status quo. However, if we really want to pursue a sustainable society rather than one that continually just grows larger, then we need to look at ourselves first. We need to find jobs that mean more to us than just financial reward and that are personally satisfying. If your job is simply a pay cheque, then you become susceptible to perpetual consumption.

We also need to disconnect how we make money from how we spend it. Resist the temptation to work more simply to have more means to buy things, and instead, be comfortable with what you have based on the type of work/life balance you want. Be okay with sacrificing that new TV if it means your work/life balance will be negatively affected. Your time is not equivalent to a dollar figure (or an hourly wage amount). It is in fact, worth a lot more than that, most of which can’t be monetized nor should it be.