This hedonic treadmill is particularly dangerous in lean economic times. It is hard to achieve new and more complex aspirations for the future if the economy is shaky. For example, a person might wish to live in a home that they have purchased. They work hard and save, and finally buy that house. At first, they are happy enough living in the house, but eventually, that house becomes their baseline situation. They no longer compare their situation back to the cramped apartment where they used to live. At that point, a bigger and more luxurious home becomes the aspiration. But in an economy like this one, people will have difficulty achieving a bigger house. In fact, many people will have to take a step backward, moving against the hedonic treadmill. These backward steps will create a lot of anxiety and sadness, because people will see their aspirations slipping away.

As second problem that the current economy brings to light is the schemas or expectations that people have for employment. Most of us assume that we will start working on the ‘ground floor' of our operation. For example, as a professor, I started out as a graduate student making about $7000 a year in stipends. Then, I moved up to a postdoctoral position, an assistant professorship, and associate professorship, and finally to a professorship. This path followed the usual schema of advancement and promotion as well as increases in salary and benefits. Most of us expect an increase in salary and benefits throughout out careers.

Oddly enough, though, this schema for our salary and benefits does not map that well onto our economic needs. Early in our careers, we often need more money than we make, particularly if we are starting a family. By mid-career if we are lucky, our incomes begin to match our needs, as our children get older. Late in our career, however, we expect to be making the most money, even though we may be in a stage of our lives where the majority of our expenses for family life are over. In a successful economy, this schema is fine. Older workers are paid for their loyalty and experience. In a lean economy, though, older workers become candidates for layoffs. Younger workers are cheaper, and so they save companies money on the salary scale.

It is hard to pare down the salaries of older workers, however. Each of these individuals is on the hedonic treadmill, and so each has an expectation of achieving new goals. Furthermore, we all make plans for the future based on the schema of increasing wages. In order to change the way that people are paid, companies will have to fight against both the treadmill and these expectations to pay older workers a fair wage that will also allow them to remain employed in a weak economy.

Unfortunately, while I think it is straightforward to characterize the psychological mechanisms that are part of the problem, it is beyond the abilities of this psychologist to suggest how to implement these changes. However, part of the solution will clearly require psychologists to work together with economists and business leaders to find ways to create new business structures that will allow people's jobs to survive the difficult economic road ahead.

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Tags: apartment, aspirations, corporations, decision making, decline, economic conditions, economic crisis, economic times, experimental work, financial markets, hedonic treadmill, human decision, new goals, nobel prize in economics, older workers, recession, schema, schemas