They Chose to Take a Pay Cut—and Say They’re Happier


When Daisy Almaguer took a $50,000 pay cut, she celebrated with martinis. 

The 33-year-old left a job in tech making $150,000 a year because she was burned out from working 12-hour days. Switching to a job that was less intense at a different tech company last year freed her up to do more cooking, exercising, and relaxing with her fiancé and their dog. 
“When I was making that money, I didn’t have time to spend it,” said Almaguer, who lives in New York. “I really am happy because I got my time back.”
Daisy Almaguer says she doesn’t regret taking a less-stressful job that paid $50,000 less than her previous one. PHOTO: BARRY BLASCHKE
Americans quit their jobs at relatively high rates during the past few years. Many chose less work for less money. Careers became less central to people’s lives and identities during the pandemic, and some say taking a pay cut gave them a raise in other areas, such as time and autonomy over their days. They also pursued work that brought them more fulfillment.
With some hindsight, many who could afford the financial sacrifice now say it was worth it.
Paychecks, on average, have been growing at a faster pace than usual, and the pandemic brought a rare opportunity for big pay bumps when switching jobs. But 15% of workers who switched jobs between late 2020 and 2022 said that their pay and benefits decreased, according to survey data from the Federal Reserve.

Off the hamster wheel

A smaller paycheck can be an adjustment, and not just financially. When Roger Sarkis traded a demanding career in tech for lower-paying work in state government in 2021, the loss of pay and prestige sent him into a months-long depression. 
“I have become functionally worth less to society,” said Sarkis, a 38-year-old in Provo, Utah. “At one point, my skills and background were valued at $120,000 a year. Now they’re valued at $50,000 a year.” 
He recovered from the depression through therapy and ketamine treatments.
Sarkis had left his job in tech because it stressed him out and required him to be constantly reachable, sometimes in the middle of the night. He said his wife’s pay later increased, which eased the transition.
Roger Sarkis initially struggled with the idea of making less money, but is now grateful he switched to more fulfilling work. PHOTO: MERCEDEE WILDS
He said he is much happier now, and more fulfilled by his work. He currently teaches courses at a local university and runs a small business.
One recent weekday, he took a break in a sauna. “I sat in there for 45 minutes. Nobody’s texting me. Nobody’s emailing,” he said. “I have nobody to answer to.”
Though pay cuts are often unpleasant, 40% of workers who took jobs with lower pay and benefits between late 2020 and 2022 said that their new job was better than their last one, according to a research paper by federal government economists published last month. 
Of job-switchers whose pay fell during that rough time frame, many were laid off. But 42% said they opted for better work-life balance, work they are more interested in, or employers that better embody their values, according to a Prudential Financial survey.
Amelia Noël, a career coach in New York City, said that when clients in industries like tech and finance consider a switch to a lower-paid and less-intense job, she has them first try what they can to feel less miserable in their current role.
For example, she helps them rewrite mental narratives that can fuel stress and overwork, such as feeling like they aren’t productive enough or aren’t as competent as their co-workers. About half of clients conclude that they can be happy in their current job after doing exercises like these, she said. The other half determines it is time to bail, even if there are financial consequences. 
“When you remove that drive to chase that bigger paycheck, you learn to be more satisfied with what you have,” said David Nitchman, a 55-year-old in West Newbury, Mass. He took a pay cut in 2018 when he left a career in marketing to follow his dream of teaching high school.
Helping his economics students master tricky concepts they had been struggling with, he said, has given him a sense of purpose that hitting corporate benchmarks never did. 

Living with less

When clients consider a lower-paying job, Noël has them add up the costs of the lifestyle they want to be able to afford. She said many find that they don’t need as much money as they thought. 
Some pay-cutters dip into savings while making the transition and then find ways to cut their budget.
Deciding to take a 30% pay cut led Dustin Stapp, a 39-year-old engineering manager at an electric utility, to hold off replacing his 12-year-old Chevy Volt.
He and his wife, who live in Tempe, Ariz., also started buying less cashews and other items during 
 runs. “Some of these are actually more healthy for me,” said Stapp, who stopped having an energy drink on most workdays.
Dustin Stapp is happy he traded some of his pay for more time with his family. PHOTO: DUSTIN STAPP
The couple also saved about $2,500 annually after shopping around for new providers for home insurance, car insurance, and cell service. Stapp was less happy about reducing his 401(k) contributions.
Stapp said the budget cuts have been worth it for a less stressful job. He recently took a long lunch break to watch his daughter in a parade at her preschool, something he couldn’t have done in his last role.
Roughly half of American workers say that they would be willing to take a 20% pay cut if it let them better prioritize their quality of life, according to a 2023 survey commissioned by 
Ford Motor
On average, they say that the ability to work from home two or three days a week is worth 8% of their pay, according to the Survey of Working Arrangements and Attitudes.
Of course, a lower-paying job isn’t necessarily a more stable one. 
Almaguer, in New York, ended up getting laid off from the less-intense tech job she took in 2023. However, she said that the pay cut still helped her advance in her professional life.
After losing her job in January, she launched an online furniture store with a friend. It has been a success so far.
“I’m my own boss now,” she said. “It’s, like, the dream.”

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