Voluntary Salary Reduction

Thanks for writing this! I also voluntarily reduced my salary for several years (and lived partly off my savings) and had been meaning to write about this for some time but never got around to it. It's always been somewhat puzzling why this isn't more common. While it probably shouldn't become a norm for the reasons you outline, my sense is that more EAs should consider this option (though I may be underestimating how common it is already).

I agree with all the downsides you list but I could imagine there are also other upsides to voluntary salary reduction. For example, it can signal your commitment to both your organization and to taking altruistic ideas seriously—following the logic where it leads, even when that means doing unconventional things. This might inspire others.

I also worry that we might be biased to overestimate the downsides of voluntary salary reductions: Donating creates tangible satisfaction—the concrete act of giving, the tax receipt, the social recognition, etc. Taking a lower salary offers none of these psychological benefits and can even feel like a loss in status and recognition.

Why don't you consider the reduction as part of of your donations? Unlike taking a direct-work job (where the counterfactual and non-monetary compensation questions are complicated and any estimate will involve a lot of guesswork)^[1] your salary reduction is from a known very well-understood baseline.

I'm sympathetic overall to your desire for this not to become a norm in EA, due to the concerns you listed, but I would (and do) count it towards my donation target, and would generally advise others to do so.

1. ^{^}

   There's an argument in your case that your counterfactual salary is extremely clear. I would expect for most people taking a salary reduction, the answer is much harder. I'd estimate that half of people I've heard of leaving EtG jobs would have had a hard time being happy at that job any more, and many more people are like me where I haven't worked in industry for 7 years and so I would have to guess, which makes it a bit of a weird norm question if a peer of mine gets to claim a 50% reduction, but I have no idea if I could have made double my (reduced) salary in industry in a very distant counterfactual world.

A possible comparison is to dollar-a-year men, successful business leaders who go to work for the government for basically zero.

I suppose this is only tangential to your post, but seeing it reminded me of something I was just recently reflecting on. I wanted to look into whether anyone has written on here in support of reducing their cost of living so that they can sustain themselves on fewer work hours in order to volunteer more of their time. It seems like a variation on Earning to Give—in the sense that by lowering costs you make it easier to earn what you need so that you can give more of your time. I'm interested in reading some of the links you included because even though not directly tied to my own reflection they seem relevant in a way that I find stimulating.

Thanks for writing about this! I've thought about this as well, but there are a couple of reasons I haven't done this yet. Primarily, I've been thinking more lately about making sure my time is appropriately valued. I'm still fairly early-mid career, and as much as it shouldn't matter, taking a salary reduction now probably means reduced earnings potential in the future. This obviously matters less if you don't plan on working for a non-highly impactful non-profit in the near future or if you're later in your career, but I think this is worth thinking about even if you're financially secure.

I think the sort of people who frequent this forum tend to be a bit too keen to work for not much because they think the work is so important, kind of like an 'impact discount', and I think historically effective non-profits have been a bit too keen to offer impact discount salaries. This seems to be less of an issue in the last 3 years in my experience, maybe because EA-aligned orgs are getting better funded. 

I think taking impact discounts probably harm our impact in the longer term. It's not just about the money per se, but about the perception of value. Unfortunately, people tend to see your hourly rate as a reflection of how much value you provide. Young people should probably care about this a bit more, but granted it's a tough job market and it's probably a much lower priority than just getting a job.

It also, of course, depends on whether you think your current employer is the most effective place to be sending your counterfactual dollars. It's plausible that one might work at a highly impactful non-profit, but they think that another non-profit they could donate to is twice as effective (or whatever the ratio is based on their marginal tax rate, but it's probably not more than double).

I proposed something related to this, trying to get around some of the issues you mention above. Essentially, a way to have your employer re-purpose some of your salary towards an external charity.