The farmer is separating his farm from his parents’ farm. To say this has been a summer full of drama would be a total understatement. I would say that the drama has gone from his larger family, to our little family, and now, to the economics of the farm.

This is probably where the drama should be: The Farmer is essentially starting a new business. I have always thought he would do a great job on his own and it’s been fun to watch him.

He is experimenting, trying to figure out what he wants. This summer, for example, he let the pigs graze in our field of sweet corn after the season was done.

It’s hard for me to understand how revolutionary this is. Knowing very little about pigs or sweet corn, it seems logical to me that the pigs are next to the field, so why not let them eat what they want? But the Farmer keeps telling me that other farmers would think he’s crazy.

Then I think, “What? More crazy than you living out here with me and the kids?”

The Farmer will earn less money farming his smaller farm instead of combining it with his parents’ farm. But it’s a no-brainer. The pay cut is a small price to pay to get emotional independence.

To me and the Farmer it’s obvious that he’s making a good move for himself. Yet I see lots of other people in this situation: start over and take a pay cut or keep finances stable. The majority of people choose stability, even thought they shouldn’t.

So this post is about when it’s okay to take a pay cut.

If you want to change careers. Look, you are stopping doing something that you know how to do, and you are going to start doing something you have not done before. Why would you think you will not take a pay cut? Don’t be a brat. Take the cut.

If you are over 40 years old. Pay peaks about age 40 for everyone except surgeons and lawyers. So if you are 40 and job hunting, take a pay cut. It’s not going to kill you, but holding out for a raise might lead to fears of starvation.

If you have been unemployed for six months. Statistically speaking, you will have to take a pay cut to re-enter the workforce. So instead of holding out to be a superhero of job hunts, just take a job. So much of our self-worth comes from working that ditching unemployment far outweighs avoiding a pay cut.

If you’re relocating back to family. Research from Nattavudh Powdthavee of the University of London shows that to make up for the decrease in happiness that you experience when you leave family and friends, you would need to make $133,000 more than you were earning before the relocation. So it stands to reason that you can take a substantial pay cut to move closer to family and still gain a net happiness benefit because close relationships are so important to one’s happiness.

If you will get a great boss. When it comes to the job hunt, getting a boss who will be a great mentor matters more than the job you’ll be doing for that boss. The number-one factor that determines your earning power is your schooling. The number-two factor is the quality of mentoring you get. Since most of you are out of school, mentoring should be your number-one concern, and you’ll more than make up for a pay cut by gaining a good mentor.

If you are having mental health problems from not working. Work provides a lot of things: a sense of belonging, sense of purpose, structure and balance to a day, as well as financial security. You can get all these things by short-circuiting your job hunt and taking a lower-paying job. Wondering if you are having problems big enough to qualify for this one? Are you gaining weight during unemployment? That’s a sign that you’re masking new emotional problems. Get a job.

If you need better insurance. Taking a pay cut to get better insurance is like buying peace of mind. And at a bargain rate, really. If all you need to do is take a pay cut to know that you will not go bankrupt from medical bills (the most common cause of bankruptcy, by the way) then it’s worth it. Also, I often contemplate becoming a customer service rep at Microsoft so I can get to their amazing health coverage for kids with Autism. (Asperger’s is genetic, and Microsoft knows their employee pool, you’ve gotta give them that.)

Okay. Look. Can you tell by now that a pay cut is always fine? Really, the only exception would be when you have a job you love. Because we are all looking for a career that provides stability, engagement and a way to support us financially, and often that comes in the form of a pay cut.

You are not your salary. You are not worth less in the world because you are paid less in your job. Get your self-worth from a wide range of things and a pay cut won’t matter to you. Focus on the components of a good job: learning, personal growth, friends at work, and a good family life. All those things are worth a lot more than a pay cut.


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  1. David Pittelli
    David Pittelli says:

    “medical bills (the most common cause of bankruptcy, by the way”

    You have been bamboozled by the misleading Harvard study which “indicates that this is the biggest cause of bankruptcy, representing 62% of all personal bankruptcies.” To qualify as a “medical bankruptcy” in this study, all one had to do was spend at least $1,000 on medical expenses in the prior two tears. But no one declares bankruptcy because of $1,000; at worst one might consider this a contributing factor. Further, I’d venture that close to 62% of all households have spent at least $1,000 on medical expenses over two years, meaning there is almost no correlation between this stated factor and bankruptcy. Finally, medical insurance itself certainly costs over $1,000 for two years of coverage. One could just as well say that most bankruptcies are due to medical insurance. (Or for that matter that most bankruptcies are caused by eating in restaurants.)

    But that’s not all. Even people who did not spend anything out of pocket for “medical bills” were counted as “medical bankruptcies” if they lost at least two weeks of paid work due to illness. But missing work is not covered by health insurance, it would be covered by disability insurance. Despite this the study prominently implicated lack of lack of health insurance as the cause of these bankruptcies.

    Why did they want to inflate this figure, to engage in results-oriented social science just as the governing classes were renewing the debate for socialized medicine? The question answers itself, does it not?

    See the Harvard study if you doubt me:

  2. Sean Thomason
    Sean Thomason says:

    Great article!!  I am an avid reader of your site and all the articles here. Thanks for contributing such good advice to so many readers and career aspirants.I recently happened to read a fantastic book titled “The Career Journey” by Ram Iyer in which the topic of job hopping and horizontal moves is discussed with a lot of detail. I think after reading your article and the book, there is a lot more clarity around what I should be doing next. Thanks!!

  3. Banking Analyst
    Banking Analyst says:

    I’m 29 so I found this blog post a bit distressing:
    “If you are over 40 years old. Pay peaks about age 40
    for everyone except surgeons and lawyers. So if you are 40 and job
    hunting, take a pay cut. It’s not going to kill you, but holding out for
    a raise might lead to fears of starvation.”

    I think the exceptions list is bigger here than you suggest. Accounting and financial professionals likely continue to grow in earnings. My goal is to reach $100,000 or more in base salary by the time I’m 40 (currently at $60k, 1 year in the work force).

  4. rich
    rich says:

    I am one of the few lawyers around with a foot in both publishing and food and ag, so I’d love to hear of your adventures in keeping the royalty and your husband’s adventures with pigs in sweet corn.

  5. Kelsey
    Kelsey says:

    I’m 28 and trying to go back to school to get my MSc (Zoology), and follow what I had thought were pretty solid dreams (research). I am in a job I don’t like right now (data consulting in an environmental consulting company)… Making okay money. I have no children and don’t want them. I like my life, my money, traveling, my hobbies and my passions better. Unfortunately, I will never make the kind of money I want to make (100k) with the job I would love to do (research predators/carnivores and teach at a college/university level). I am extremely ambitious, driven, intelligent and confident. But I have no attraction to working in business like those on this comment form who ARE making 100+k. I wish with all my heart I would find those positions fulfilling, but I would be sawing my wrists every night with golden razor blades (that I bought with my 100k) thinking about going back to work in the morning …
    It just won’t happen.

    How do you resolve those two polar opposite perspectives? I am taking a pay-cut for the rest of my life by following my passion and pursuing something I would find deep meaning and pride in. But I won’t earn the money I really want to earn…

    A true test of what my passion or natural-drive is would be what I would do if I won the lottery:
    I would write music, and go back to school for my PhD, complete research, teach at college and uni-level (those jobs don’t pay well).

    It’s really disheartening… tbh.

  6. Susan
    Susan says:

    Thanks. I took a drastic paycut- almost half my salary-because I was one of 1000 employees being laid off last year. I accepted a job in field.
    Yet, I’m struggling financially and still looking for a better job. Your last paragraph very thought provoking.

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