In a world increasingly marked by wealth concentration, discussions around executive compensation and economic disparity are gaining prominence. Recent headlines highlight Tesla’s Elon Musk potentially heading towards becoming the world’s first trillionaire, following a proposed US$1 trillion compensation plan contingent on meeting ambitious growth targets.
In stark contrast, Australian corporate pay scales, while not reaching these extraordinary heights, are still eye-catching. Former Virgin CEO Jayne Hrdlicka is set to exit with nearly $50 million in shares and cash benefits, provoking conversations about the fairness of such compensations.
Public perception of executive pay often skews significantly from reality. Research from the United States indicates that people believe the average CEO earns approximately ten times more than the average worker, preferring a ratio closer to five times. However, the stark reality in the US shows that CEOs now earn an astonishing 265 to 300 times more than the average worker. In Australia, the perception is somewhat more modest, with citizens estimating CEOs earn seven times more and ideally wanting that figure reduced to three times. Yet, the ongoing study reveals that, in reality, the CEOs of top 100 Australian companies earned 55 times more than their average counterparts last financial year.
This raises critical questions about the notion of ‘how much money is enough?’. This question has echoed through history, with ancient philosophers like Aristotle offering nuanced insights. Aristotle spoke of eudaimonia, suggesting that a life of virtue and character cultivates genuine well-being more than the sheer accumulation of wealth.
Modern research points to a complex relationship between money and well-being. A significant study from 2010 suggested that well-being levels off around a household income of US$75,000, or about US$111,000 when adjusted for inflation in today’s terms. However, this figure can vary significantly based on cost of living and individual circumstances.
Further findings indicate that while growing wealth may continually contribute to well-being, the increase in happiness feels less significant when moving from $1 million to $10 million compared to the leap from poverty to middle class. A 2022 experiment involving individuals from various countries, including Australia, found that those in lower-income nations exhibited happiness gains three times larger than those in wealthier countries. Interestingly, this experiment revealed that participants generously donated more than two-thirds of the US$10,000 they received, displaying a strong inclination toward sharing and community support.
The detrimental effects of materialism on well-being, driven by a relentless pursuit of wealth for status and image, are supported by decades of research. This often stems from swings in self-esteem and toxic comparison, creating a never-ending cycle of desire for more. This ‘hedonic treadmill’ phenomenon leaves individuals longing for greater wealth in pursuit of happiness, ignoring the often deeper connections tied to time spent with loved ones and personal fulfillment.
Research spanning generations emphasizes the importance of meaningful relationships for overall health and happiness. These findings echo the principles articulated by psychologist Abraham Maslow in his hierarchy of needs, requiring basic financial stability as a foundation for self-actualization.
Alongside financial considerations, trends in ‘time affluence’—the idea of maximizing free time by outsourcing tasks—highlight the non-material factors contributing to well-being. Engaging in experiences, whether through meals out, vacations, or skill-building activities, proves beneficial for nurturing relationships and creating timeless memories.
Economic inequality remains a growing concern in Australia, particularly impacting younger generations facing escalating housing costs without commensurate wage growth. Recent data indicates that the wealth gap continues to widen, raising questions about the implications for social cohesion and public health.
Bureau of Statistics figures from 2019-20 reveal a striking statistic: the richest 20% of Australians owned about 62% of the nation’s wealth. As inequality deepens, research from the UK underscores the potential social fallout, leading to heightened issues such as crime, substance abuse, anxiety derived from food insecurity, and declining social trust.
In this context, the pursuit of wealth becomes tainted by irony. Those striving for greater financial accumulation find themselves potentially deprived of the very happiness and fulfillment they seek.
As society grapples with these disparities, a pivotal question emerges: In an ideal Australia, how much wealth should the richest 20% own? As dialogues around wealth and its impact on life quality continue, it becomes clear that collective well-being might be best served through efforts to bridge the gap between the wealthy and the rest.
In summary, the narrative surrounding wealth is more than just numbers; it’s intertwined with societal values, personal fulfillment, and the profound question of what constitutes a satisfying life.
image source from：theconversation
