The Psychological Price of Unfair Pay

The Huffington Post:

It’s going to be a gloomy Labor Day for many this year. The national unemployment rate, now 9.1 percent, won’t seem to budge, and many states are doing worse than that. The unemployment rate in California exceeds 12 percent, with some communities registering staggering rates of more than 30 percent.

Yet jobs go begging. I see jobs advertised in store windows of my hometown, Washington, D.C., where 1 in 10 workers is out of work. Many working Americans find this perplexing. Isn’t it simple economics that the unemployed would take these jobs — indeed, welcome any job — when times are rough?

That’s the utilitarian point of view, which says that we are rational, calculating machines that do whatever serves our economic self-interest. But many psychological scientists have in recent years moved away from this purely utilitarian view, dismissing it as too simplistic. Instead, they argue, personal financial decisions are often influenced, irrationally, by feelings, including an innate sense of fairness.

Read the whole story: The Huffington Post