Economics for Life Real World Financial Literacy Chapter 2 Flourishing in Your Job and Well-Being in Your Life

. Flourishing in Your Job and in Your Life How to Behave the First Week on the Job Since this is a book about financial literacy , this is likely your first or second job , and you will need to learn some of the fundamentals . First , you should remember that ajob is immersed in a social setting . You have to get along with your boss and coworkers ! Unfortunately , there is no manual for how to do this . Instead , you have to use your people skills . Listen to your supervisor and do what they direct you to do . Do not question a supervisor orders you will need to earn their trust before you can do that . With your coworkers , be willing to listen and to not be so vocal with your opinions . In the beginning , you are there to learn about the organization and build trust . A will not be trusted . Gossip at Work RI . Dunbar states that Analyses of freely forming conversations indicate that approximately two thirds of conversation time is devoted to social topics , most of which can be given the generic label gossip ( 2004 ) This gossip is what you need to get connected to in your workplace , and you can find it by making friends at . Take out to lunch or , better yet , go for drinks after work . When you are with your , you should listen more than you talk . Your can tell you things like which bosses are mean , which workers will stab you in the back , and which men are sexual . This gossip will also tell you who has power in the organization . For example , often a personal assistant controls access to the President , so it is important to be kind to them . More than just providing gossip , friends at work also increase your .

Remember that work is not just about doing your job but getting along with your coworkers . Modern organizations are built around teamwork , but more importantly , people who report that they consider a coworker their best friend are much more likely to also report that they love theirjob . Insights from Give and Take by and Houser You not only need friends , though you also need networks , both inside and outside of work . Adam Grant , a professor of Industrial Psychology at the University of Pennsylvania , talks about the importance of networks in his book , Give and Take By developing a strong network , people can gain invaluable access to knowledge , expertise , and influence . Extensive research demonstrates that people with rich networks achieve higher performance ratings , get promoted faster , and earn more money . 2013 ) Interacting in networks ( or teams ) involves giving and taking , and Grant states that there are three different styles of reciprocity giving , taking and matching . Each of these has a different type of network . A taker likes to get more than they give to a network or relationship . A giver ( admittedly a rare breed in the workplace ) prefers to give more than they get , and a matcher strives to preserve an equal balance and getting . Our personality is 50 the result of nature ( or evolution , which equals genetics ) and 50 the result of nurture ( or the interaction of our genetics with our environment ) However , where Grant takes these types as a given , and Houser used experiments to establish that evolution has created a relatively stable mix of these three reciprocity styles ( 2005 ) According to and Houser , this is the breakdown

Table . and Houser Reciprocity Styles Type Name Percent Grant Type Name 17 ive 63 Cheaters ( Free Riders ) 20 Takers Not Classified I do not think I can stress enough how important and Houser work is to how we can understand and develop professional networks . For example , if you have to work on a randomly assembled team , you will encounter a mix of , and cheaters . Grant reports that each of these reciprocity types deal with their networks in different ways give a lot more than they receive . This is a key point takers and also give in the context of networks , but they tend to give strategically , with an expected personal return that exceeds or equals their contributions . When takers and network , they tend to focus on who can help them in the near future , and this dictates what , where , and how they give . Their actions tend to exploit a common practice in nearly all societies around the world , in which people typically subscribe to a norm of reciprocity you scratch my back , I scratch yours . 2013 ) However , Grant reports that even though takers and get ahead , givers end up creating the widest network and become the most successful ( as long as they do not end up as for takers ) If you are a giver , gossip once again comes in handy and other givers do not appreciate takers and will share this information widely among their . Unfortunately , takers are fakers , and that can make them hard to identify . Everyone talks like they are a good member of the team so be sure to watch closely and remember that being agreeable is not the same as contributing . Of course , sometimes you can not avoid working with a taker . To help you understand what strategy you should use , we need to acquaint you with some economic game theory , specifically a strategy called tit for tat . This is usually a matcher strategy , as it requires you to match what the other player does . It will maximize your gains if you are dealing with a giver or matcher and minimize your losses ifyou are dealing with a taker . Thus , it is a strategy .

To understand how this strategy works , we can talk in terms of cooperating with or not cooperating with your teammate . The strategy works like this . In the first round you presume good will and cooperate with your teammate . You see ifyour teammate by cooperating in the first round . teammate does not cooperate in the first round , you stop cooperating until the teammate cooperates . Then you return to cooperating . If the teammate again does not cooperate in any round , you then do not cooperate in the next round . Another way to look at this is that you ( assuming you are a giver or matcher ) begin by cooperating and then copy your teammate ( strategy from the previous round . Here is how it might look in a series of rounds Table . Tit for Tat Strategy Cooperate Not cooperate Not cooperate Not cooperate Not cooperate Not cooperate Not cooperate Cooperate Cooperate Cooperate Cooperate Not cooperate Not cooperate Cooperate How does this translate to the real world of work ?

Well , imagine that a fellow worker comes to you to ask for advice or help with a project . You are a giver or a matcher and you help them . Then , you need help yourself and that person has excuses or does not answer your emails . Obviously , your natural tendency is to not help them the next time they ask . We can also humanize the strategy to make it feel more familiar

. Tit for tat is generous in that it starts out cooperating in the first round . Tit for tat has a strong sense of fairness in that it punishes the teammate by not cooperating in a subsequent round if the teammate does not return favors . Tit for tat is forgiving because if the teammate starts to cooperate , you will return to cooperating . Tit for tat is because by cooperating , both of you are gaining and you are not competing and striving to get ahead ofyour teammate . Are these not characteristics you want your children to have ?

There also a good chance that many of us already use this in our personal interactions . However , tit for tat is not the only strategy . Grant reminds us that givers are the most successful people in the workplace , since they develop the widest and strongest networks . Citing Martin book , Super Grant says that the best strategy for givers ( or wannabe givers ) is the generous tit for tat . This is because found that it is more advantageous to alternate between giving and matching in personal interactions As with , you begin by cooperating , assuming good will on the part of your teammates . If your partner does not cooperate but rather competes , you continue to cooperate . Specifically , you want to cooperate once every three complete rounds . In other words , for every three times your teammate competes , you compete two of the times in response and cooperate one time in response . Another way to put it is that instead of competing every time the other player competes , you compete only of the time . According to , Generous tit for tat can easily wipe out tit for tat and defend being exploited by defectors ( 2011 ) It achieves the desired goal givers and punishing takers , but it is not too punitive . It can also be called a Trust but verify strategy . According to Grant Generous tit for tat achieves a powerful balance of rewarding giving and discouraging taking , without being overly punitive . It comes with a risk generous tit for tat encourages most people to act like givers , which opens the door for takers to rise up again by competing when everyone else is cooperating . But in a world where relationships and reputations are visible , it increasingly difficult for takers to take advantage of givers ( 2013 )

Promotions Promotions are the way to get salary increases that are above just a raise . The concept in human resources is that a more complex job deserves a higher salary . The best way to get a promotion is to do an excellent job in your current position . Also , volunteer for extra work if your boss asks . You are proving that you are a team player and an engaged employee and your boss will trust you with increasing responsibilities . Women at Work In 2020 women made up 47 of the US labor force . However , analyses of women compensation and place in the organizational hierarchy reveal ongoing imbalances when compared with their male counterparts . At the highest level , in 2021 only ofthe Fortune 500 , or , were women . The gender wage gap is a recognized phenomenon that has been widely studied . In 2019 women were making cents for every dollar of men earnings . Although it has narrowed significantly since 1979 , when it was , the gender wage gap remained relatively stable through the . This is true when examined across and occupational categories ( highlights of women earnings in 2020 ) Among the many causal factors , researchers have identified a motherhood wage penalty that is variously attributed to productivity differences and discrimination ( De Leonard , 2020 , 2018 , 2007 ) For women in the early phase oftheir careers , there are several considerations that may lead to more positive salary and promotional outcomes . According to Adam Grant ( 2013 ) women are not as willing as men to advocate for more money during salary negotiations . Understanding this tendency may help to resist the urge to accept the first offer . It is often prudent to step back , take an objective perspective , and get some advice from a trusted colleague before responding to a salary offer . Early career promotions to management are a second factor that women should pay attention to . In a Wall Street Journal article largely based on the influential study Women in the Workplace , reporter Vanessa explains that it is early in women careers , not later , when they fall dramatically behind

men in promotions Though women and men enter the workforce in roughly equal numbers , men outnumber women tol when they reach that first step that are the bridge to more senior leadership roles . Although companies advance women already in management positions , there is not a similar effort to promote women to that first management position . As , a labor economist at the global human resource consulting firm Mercer explains , companies need to position women and minorities to succeed in the roles that are likely to lead to positions ( 2019 ) Senior partner at and contributor to Women in the Workplace , Yee comments that ew efforts are likely to remedy the problem as much as tackling the gender imbalance in initial promotions to management ( 2019 ) In early career employment searches , women can choose to seek out companies with a positive record of advancing women . Once employed , they should be proactive in understanding the expectations for promotion into management . man , 440 an aim saw 350 229 am saw . 250 20 lean was 199 1995 2000 was Shaded Source mean of ran Figure . US Bureau of Labor Statistics , Employed full time Median usual weekly real Wage and salary workers 76 and over Men and Women and , retrieved from FRED , Federal Reserve Bank of St Louis , September 30 , 2027

Employment Discrimination Contemporary employment discrimination law developed mainly out of the Civil Rights Act of 1964 , which prohibits employment discrimination based on race , religion , national origin , and sex . Subsequent legislation and legal interpretations have extended employment discrimination to include age , disability , pregnancy , and other categories . On June 15 , 2020 , the Supreme Court ruled that Title also extends protection to employees . The Equal Employment Opportunity Commission ( is the agency responsible for the enforcement of federal discrimination laws . These laws also protect those who report discrimination from retaliation . States have laws prohibiting employment discrimination that are similar to and sometimes more expansive than federal laws ( 2018 ) These state agencies are referred to as fair employment practice agencies ( Sexual harassment is a form of employment discrimination that can occur in a variety of ways . The victim , as well as the harasser , may be a woman or a man . The victim may be ofthe same or opposite sex . The harasser may be the victim supervisor , an agent of the employer , a supervisor in another area , a er or a , such as a vendor or customer . The victim does not have to be the person harassed but can be anyone affected by the offensive conduct . The harasser conduct must be unwelcome . If you report sexual harassment , whether to your supervisor or someone in , legally they must investigate the harassment and , if found credible , take prompt action to try to stop the behavior . Ideally , it is best to understand your rights and responsibilities regarding employment discrimination before encountering a problem . Familiarize yourself with your company policies on discrimination and the procedures of the and relevant state . If you feel you have been the subject of workplace discrimination , the website is a good place to begin figuring 241

out the most appropriate way to respond . There you can find the relevant laws , the role of enforcement agencies in interpreting and administering the laws , and how to file charges . It is important to note that , with the exception of violations of the Equal Pay Act ( ERA ) you can only file a job discrimination lawsuit under federal law after you have filed charges with the . There are a number of resources that will help you identify companies that are committed to diversity and inclusion , as well as resources to consult if you have been the subject of harassment or discrimination in the workplace . Several are listed here . How to identify companies that value diversity , equity , and inclusion How to Tell If a Company Truly Values Diversity and Inclusion for Is Just All How to Tell Ifa Values and Inclusion How to identify bias in listing Great Job Boards for Diverse Professionals Gender Decoder Tool How to Identify Gender Bias in a Job Listing TOD and Inclusion Job Board Sites Knowing your rights as on employee 13 Things Your Boss Ca Do Practical Guide to Requesting and Negotiating Reasonable Accommodation Under the ADA National Labor Relations Board Employee Rights

US . Labor Laws and Issues What to do ifyou have been discriminated against How to File a Charge of Discrimination . Equal Commission Guidance of . Equal ment Opportunity Commission Guidance on Sexual Harassment How to recognize and respond to workplace stressors or Black Women Talk About Workplace Stress and How They Cope How To Handle in the Workplace Minimizing and addressing in the workplace Recognizing and Responding to at Work In 2010 , Ben gave a commencement address in which he described the the ultimate purpose of economics It is to understand and promote the enhancement of wellbeing . Economic measurement accordingly must encompass measures of wellbeing and its , income and wealth do contribute to happiness , but the relationship is more complex and conte than standard utility theory would suggest . Other important contributors to individuals life satisfaction are a strong sense of support from belonging to a family or core group and a broader community , a sense of control over one life , a feeling of confidence or optimism about the future , and an ability to adapt to changing circumstances Psychological wellness , the level of education ,

physical health and safety , community vitality and the strength and social ties , and time spent in leisure activities . That is a pretty large list of things that determine your . You will recognize some from traditional economics , while others are from this new view on economics . We can put them in a list to make them a little clearer of Gross domestic product per capita Personal consumption expenditures Household income Household wealth Changes in the distribution of income , wealth , or consumption Degree of upward mobility in material measures of wellbeing Indications of job security and confidence about future employment prospects Households liquidity buffers or other measures of their ability to absorb financial shocks A strong sense of support from belonging to a family or core group and a broader community A sense of control over one life A feeling of confidence or optimism about the future An ability to adapt to changing circumstances Psychological wellness The level of education Physical health and safety Community vitality and the strength of family and social ties

Time spent in leisure activities Additionally , the Organization of Economic Cooperation and Development ( an association composed of developed nations ) has created a Better Life Index comprised of elements that increase . Better Life Index Housing Income Jobs Community Education Environment Civic Engagement Health Life Satisfaction Safety Worl Balance What makes you happy ?

Hierarchy of Needs ) People often conflate happiness with life According to , researchers define happiness as a transitory emotion that is influenced significantly by your current circumstances , including the weather and even the time of day ( 2010 ) On the other hand , they use life satisfaction to refer to a state of contentment and . Psychologist Abraham captures the conditions that give humans life satisfaction in his Hierarchy of Needs ( 1943 ) These are usually portrayed as a pyramid ( though

did not initially present it this way ) in order to represent contention that each level must be achieved before progressing to the next level . For example , if a person does not have their physiological needs met , they will be focused on those before pursuing safety needs , which is the next step on the pyramid . While most of the needs might seem pretty obvious , I want to point out that the need can include things like partner acquisition , parenting , pursuing goals , and utilizing and developing talents and abilities . It should also be noted that would later revise and expand his Hierarchy of Needs to include Cognitive needs Aesthetic needs Transcendence For , transcendence included the need to help others and to seek spiritual transcendence . Other researchers have added two significant ideas to Hierarchy . The first is that the steps are fluid , and the pursuit of various goals can overlap at different stages in our lives . Second , you can achieve high levels of actualization , but if the lower needs have not been met , you will be forever trying to find them . The news is filled with stories of stars with wealth and fame who missed the needs lower on the pyramid and had tragic ends to their lives .

needs needs Safety needs security , safety Bade needs Figure . Hierarchy of Needs by is used under a 40 License . What makes you happy ?

Ben ) I find it pretty amazing that Ben , Chair of the Federal Reserve bastion of give a commencement address on the economics of happiness . In fact , did just that at the University of South Carolina on May ( 2010 ) This is exactly the kind of advice that you are looking for in this book ! opened his addressed by saying , As you might guess , when thinking about the sources of psychological , economists have tended to focus on the material things of life This traditional economist perspective on happiness is not as narrow and as you might think at first . There is now a field of study , complete with doctoral dissertations and , called

the economics of The idea is that by measuring the reported happiness of people around the world , and then correlating those results with economic , social , and personal characteristics and behavior , we can learn directly what factors contribute to happiness ( 2010 ) What gives people life satisfaction is notjust material wealth . In fact , although rich people in developed nations that they are somewhat happier than poor people in those nations , people in poor nations report that they are pretty much just as satisfied with their lives as those in rich nations . As a matter of fact , in the United States , real per capita income has almost tripled over the time period 1946 to 1991 but average happiness has not changed at all . This finding is called the Paradox , named after the researcher who discovered it . Similarly , also found that as countries around the world get richer ( economists measure this as Gross Domestic Product per capita ) people do not report being happier . And in comparing rich countries to poor countries , also found that once you get above a certain amount of income that satisfies basic material needs , people in rich countries do not report being much happier than people in poor countries ( 1974 ) Additional research on the Paradox has shown that even though people in rich countries may be more satisfied than people in poor countries , the increase in happiness due to greater wealth is moderate ( 2010 ) Do not forget that rich countries have more leisure time , better health care , often less corruption and other benefits . The explanation for the Paradox , according to , is that relative wealth is much more important than absolute wealth . A behavioral economic phenomenon called hedonic adaptation is also at work here ( Frederick and 1999 ) Humans are adaptable , and , like lottery winners who seem to return to their base level of happiness within six months , adaptation to any additional income causes us to return to our base level of . Finally , relates what the economics of happiness tells us will give us life satisfaction . Here are some of the highlights from his 2010 address Happy people tend to spend time with friends and family and put emphasis on social and community '

Another factor in happiness , perhaps less obvious , is based on the concept of When you are working , studying , or pursuing a hobby , do you sometimes become so engrossed in what you are doing that you totally lose track of time ?

That feeling is called Another finding is that happy people feel in control of their own lives . A sense of control can be obtained by actively setting goals that are both challenging and this is one of the most intriguing can be promoted by fighting the natural human tendency to become entirely adapted to your circumstances . One interesting practical suggestion is to keep a gratitude journal , in which you routinely list experiences and circumstances for which you are You will no doubt see some parallels to Hierarchy of Needs . spent a lot of time studying exceptional people such as Albert Einstein to see what made them feel fulfilled . His Hierarchy of Needs is a prescription for what will make humans an academic study in developmental psychology . What makes you happy ?

Authentic Happiness ) When Martin was elected President of the American Psychological Association in 1998 , he promoted an initiative in psychology to study what makes people happy along with the traditional subject of what makes people sick . This field of study became known as Positive Psychology . In his book , Flourish , presents his theory ofwhat makes people happy ( 2011 ) It consists of five practices that are memorialized by the pneumonic Positive Emotions Cultivate positive emotions . Pursue activities that bring you happiness and life satisfaction . We talked about these activities above in the sections on

and . It also means doing gratitude exercises , such as listing three things you are grateful for each day before you go to sleep . Engagement Deep engagement in an activity is known as flow . In his 2011 book , provides a series of questions so that you can determine ifyou were in a flow Did time stop for you ?

Were you completely absorbed by the task ?

Did you lose ?

According to the principles of Positive Psychology , the way to become engaged in your work is to find a career that uses your signature character strengths ( see Chapter ) You can find your Signature Character Strengths by taking the questionnaire VIA Survey of Character Strengths on the Authentic Happiness website . Relationships Specifically , we should focus on positive relationships . As said , friends and family give us the greatest life satisfaction , and you can practice daily reminders that you are grateful for friends and family . However , it is not just what your friends and family can do to make you happy . revised hierarchy places transcendence at the top . Transcendence is achieved by activities that focus on helping others reach life satisfaction and on pursuing your spiritual virtues . According to , positive relationships require both the capacity to love and the capacity to be loved . Meaning Meaning is belonging to and serving something bigger than yourself .

( 2011 , 17 ) It can be devotion to your family , to a cause , or a spiritual belief . Meaning has both a subjective motivation ( the feeling we get ) and an objective motivation ( that caring for others is an important virtue ) Psychologist , in his book , Man Search for Meaning , claims that our quest for meaning in our lives is one of the fundamental human aspirations ( 2006 ) According to , having meaning in our lives is so important that it can make the difference between life and death . During the Holocaust , was interned in a concentration camp . He reports in his book that among seemingly equally healthy prisoners in the camp , those who had expressed a belief in a meaning to life or belief in a higher power survived while those who did not see any meaning in life disproportionately perished ( 2006 ) Accomplishment People , according to , pursue accomplishment , achievement , success and mastery for its own sake ( 2011 ) Some only care about winning , measured by the number of defeated opponents or the amount of money in their bank account . Some , on the other hand , pursue accomplishment to feel competent or to achieve their full potential . In Hierarchy , this is reflected in the Need for Esteem and the Need for . Hopefully you see by now the common threads between , and as to what gives us happiness and . Due to hedonic adaptation , we know that it certainly is not about having more money . Instead , the most important factor for achieving is developing positive relationships and spending time with family and friends . Bad Habits and How to Change Them A fundamental tenet of economics is that individuals seek rewards . People do actions and seek to acquire goods and services that give them . English jurist , philosopher , and social reformer Jeremy ( defined utility as satisfaction . was an English jurist , philosopher , and social reformer who invented the philosophy of Utilitarianism . According to , the fundamental axiom of Utilitarianism is that it is the greatest

happiness of the greatest number that is the measure of right and wrong . More contemporary economists define utility as . The new field of contends that individuals perform actions and seek to acquire goods and services because these activities give individuals a reward of dopamine in the area ofthe brain known as the ventral tegmental area ( et al , 2010 ) In both mice and in humans , habits form by repetition of a certain activity . We do the activity because the dopamine neurons release dopamine , a neurotransmitter , thereby giving us a reward and encouraging us to repeat the action either at the time or later . As we ( or the mouse in the maze ) repeat the action , it becomes less and less mediated by the ventral tegmental area and more controlled by the basal ganglia , the most primitive part of the brain . Eventually , the basal ganglia takes over the action , and it is no longer mediated by the dopamine reward system . In essence , this is why it is so hard to change a habit , whether it is good or bad . Once an action becomes a habit , it is more closely related to an instinct in an animal than a conscious choice . So , how do we change or extinguish a bad habit ?

Cassie , in Time Magazine , reviews the actions that scientists recommend to eliminate a bad habit . Replace a bad habit with a good one . You must keep repeating the good habit , since a scientific study found that it takes an average of 66 days to form a new habit . Reduce your stress levels . A lot of bad habits ( smoking , sugar drinks ) are used to alleviate stress levels because they give a dopamine Do other things to alleviate stress like meditation or a walk . Know the cues that trigger the habitual response , as in having a cigarette after every meal . Try to interrupt the cues . Create for yourself a better reason for quitting the habit . This means creating intrinsic motivation for yourself , such as reminding yourself that you will be healthier without smoking or overeating . Set better goals than just reacting to triggers . If you eat a cookie every time you walk in the kitchen , avoid the kitchen in between meals . Like an alcoholic , you want to throw out the liquor and avoid triggers that will remind you ofthe habit ( 2018 )

We should note , though , that addiction is neurologically different from ha bit . All addictive drugs hijack the dopamine system , not the basal ganglia . It is harder to alleviate addiction than it is to break a bad habit . Unfortunately , we do not have the space here to discuss addiction in detail . Savings is One Key to In , Neal cites an annual survey ofthe Federal Reserve Bank monitor the financial and economic status of American consumers ( 2016 ) One survey question asked respondents how they would pay for an emergency expense of 400 . Almost half ( 47 ) of those taking the survey said that either hey would cover the expense by borrowing or selling something , or they would not be able to come up with the 400 at all . Many experts believe this is due the credit card debt that Americans have taken on . According to most recent data from the Survey of Consumer Finances by the US . Federal Reserve , the average credit card debt of US . households . At the same ime , people dependence on credit card debt has been pushed by banks . Last year over two billion credit card were mailed out by banks and agencies . Chapter talks about savings in great detail , but it important to know that waving emergency savings can significantly add to your personal . finance experts recommend that you have a goal of accumulating six months of expenditures ( mortgage , food , etc . in a secure bank account . In good economic times , 90 of those who are laid off find a new job within six months . Further , regular unemployment compensation typically only lasts 26 weeks and , depending on which state you live in , ranges from 235 ( Mississippi ) to 650 ( Connecticut ) This payment will likely not cover the mortgage , the utilities and food for most of us . A nest egg will dramatically reduce our stress while looking for a . 36 )