SCRIPT

We’ve all heard the old adage that money can’t buy happiness, but according to a Princeton
University study that looked at 450,000 surveys from 1,000 US residents, that might not be
true.

Nobel prize-winning scientists Deaton and Kahneman looked at two measures of happiness:
‘life evaluation’ and ’emotional well-being.’

When people were asked to evaluate their life as a whole on a scale of 1 to 10, people who
earned more scored their lives higher. More money equals more happiness seems like a
reasonable conclusion, but this big picture view of happiness according to life evaluation isn’t
the full story.

The second measure of happiness that the Princeton scientists looked at is ’emotional well-
being,’ which is how we feel on a day to day basis. People were asked to evaluate their
emotions of the previous day using words like stress, joy, anger, sadness, excitement.
Kahneman and Deaton found that just like the ‘life evaluation’ score, ‘emotional well-being’
also increased the more money people made, but only up to a certain point. That magic
number is $75,000. Any more money than that had no effect on a person’s happiness.

Some people dispute that emotional well-being is more important to happiness than life
evaluation. Others say that $75,000 may or may not be enough depending on where in the US
you live. Later research showed that happiness peaks at just $42,000 in Atlanta compared to
$105,000 in New York City and Los Angeles.

When company CEO Dan Price heard about the Princeton study, he was moved to take action.
He decided to raise the minimum salary to $70,000. That meant a doubling of the old starting
salary at his company and a significant pay raise for the majority of his 120 employees. Price
himself took a massive pay cut from 1.1 million to the same minimum $70,000. Many of his
employees were ecstatic, but the across the board pay bump didn’t sit well with everyone. A
few of his higher-paid employees felt undervalued and jumped ship. Some criticized Price for
being a foolish businessman, but his experiment has been paying off. His business has grown,
and he says his employees work harder. Five years ago, many of them could barely make ends
meet, but now they are buying houses. Price said, “It’s way better for me to be part of a
system where people are having their needs being met, even if I have less.”