Here’s a seemingly simple question: Are high-paying jobs desirable?

It seems like the answer here is an obvious “yes.” But there’s more to the story; otherwise, this would probably set a record for the shortest blog post on this website. So, what are the subtleties here?

The reason the answer might seem like an obvious “yes” is that it’s easy to respond by answering a slightly different question: Does higher pay make a job more desirable? That is almost certainly an obvious “yes” for almost everyone. All else being equal, the higher pay a job offers, the more desirable that job will seem.

However, frustratingly, all else is rarely equal. And while a job being higher-paying makes that job more desirable than it otherwise would be, it doesn’t follow that higher-paying jobs are intrinsically more desirable. Pay is, after all, compensation. Frequently, jobs that are widely considered undesirable must offer very high pay to compensate for the unpleasant nature of the job. So, in many cases, a job’s high pay can be a signal that the job is actually very undesirable.

It works in the opposite direction as well. Low wages can be a sign that a job is highly desirable. The desirability of that job is itself something that drives down the wages of the job. People don’t require as much compensation to be willing to do something they find pleasant and enjoyable. The idea here is what economists call compensating differentials. A job being more desirable lowers that job’s pay, all else being equal, and the undesirability of a job increases its pay, all else being equal.

Two things I’ve recently read brought this idea to mind. One was in the book The Economic Consequences of U.S. Mobilization for the Second World War by Alexander Field. There were many kinds of shortages throughout the economy during the war, and one major shortage was for labor. This shortage was, itself, in part a result of the draft. That’s partly because everyone drafted into the military was not available to other industries, of course. But that’s not the whole story. Field also notes that “defense plants faced an exodus of workers” as huge amounts of the labor force moved “to farm employments, not because those jobs paid more, but because such workers enjoyed an immunity from military service” and were thus exempt from the draft. This exemption, Field writes, “reflected the power of the farm bloc” and as a result “agricultural workers were passing up the higher wages in defense plants for fear of losing their deferment.” Draft exemption was a huge compensating differential that, for many, more than offset the lower wages of agricultural work. So we would be wrong to infer that the lower wages of agricultural work were a sign those jobs were undesirable – in this case, the opposite is true. The jobs could be lower paying precisely because they were, to many, much more desirable.

The second thing that reminded me of this idea was my surprise at learning the salary range for astronauts. Apparently, the yearly pay range for astronauts is between about $66,000 on the low end and upwards of $160,000 on the high end. Now, it’s not exactly as though being an astronaut pays poverty wages – particularly at the high end. But at the same time, being an astronaut is very difficult and demanding work, both mentally and physically. The dangers associated with the job are obvious and significant. Even a yearly salary of $161k seemed surprisingly low to me, given the demands and risks of the job.

At least, that’s how it seemed until I thought of the compensating differentials. Becoming an astronaut isn’t a career you sort of stumble into. It’s a job that people dream of from their childhood and put years of focused and dedicated effort into pursuing. I’m willing to bet that being selected to become an astronaut is, in each and every instance, the fulfillment of a lifelong dream – and how many people, upon finally reaching that threshold, will say, “Actually, given the demands of this job, the pay seems a bit low, so I think I’ll pass”? Not many, I suspect. Plus, whenever you are met with the question “So, what do you do for a living?”, you’re almost guaranteed to have the respect of anyone you answer. The high social status of the job and the dream fulfillment it represents are compensating differentials that explain why the wages aren’t higher despite the danger and physical and mental demands of the job.

The upshot – we should resist the urge to see people in high-paying jobs as inherently in an enviable situation or seeing people in low-paying jobs as being in unfortunate situations. Some people are in stressful, unpleasant jobs they truly dislike but put up with it anyway because the job pays so well. And other people make relatively little money but spend their time doing something they find fulfilling and rewarding. Compensating differentials are not all there is to the story, of course, but the idea can remind us that we shouldn’t confuse how well a job pays with how desirable it is – and that often, the fact that a job pays well is a clear sign that it’s not a desirable job at all.