A new NBER working paper forced over a million real tradeoffs across 126 dimensions of life from 3,300 respondents. When people can’t just endorse everything, when they actually have to choose, a clear hierarchy emerges. Family well-being, financial security, and health dominate. Children’s health alone carries marginal utility 67 times the average dimension. Happiness and life satisfaction, the twin pillars of modern well-being science, rank 35th and 36th. Status, prosocial virtues, meaning-at-work, the things people readily cite in surveys, collapse toward the bottom when they have to be traded against something real.
The paper is careful about what this means. High marginal utility for something could reflect how deeply you value it, or how little of it you have. Deprivation drives up the value of each additional unit. The paper distinguishes between these interpretations carefully, and for financial security and health specifically, the data points toward deprivation. People aren’t ranking these things because of what they believe. They’re ranking them because of what they lack.
Pause there for a moment.
What that means, precisely, is that the workers in the organizations these managers lead are ranking financial security, alongside things like children’s health, which carries 67 times the average marginal utility, not as an expression of their values but as a direct measure of how much of it they don’t have. The survey isn’t capturing preferences. It’s capturing the shape of a gap. And the gap has an address.
The Federal Reserve has been confirming this for years. More than a third of American adults cannot cover a $400 emergency using cash or its equivalent. Between 1979 and 2024, US productivity rose 80.9% while hourly pay for workers grew only 29.4%. Upper-income households now hold 48% of total US household income, up from 29% in 1970. In 2024 alone, S&P 500 companies returned $942.5 billion in share buybacks, a new annual record, plus $657 billion in dividends. Over the last five years, buybacks alone are $4.1 trillion.1
The national food budget shortfall (the actual dollar gap between what food-insecure Americans have and what they need) is $32 billion a year. Closing it entirely, for all five of those years, would have cost $160 billion. The five-year buyback total is more than 25 times that figure.
Buybacks are not irrational. Capital returned to investors moves somewhere. The question the arithmetic raises isn’t whether the mechanism is efficient. It’s whether the aggregate pattern of those decisions, sustained across decades, has produced consequences that the mechanism itself doesn’t account for, and whether calling it efficient settles anything about those consequences.
Buybacks were not always a defining feature of American corporate finance. The SEC’s adoption of Rule 10b-18 in 1982 created a legal safe harbor for share repurchases. What followed was not inevitable. It was a specific revisable decision about where surplus goes. No single firm can step outside its competitive labor market unilaterally. However, the pattern that no single firm produced alone is nonetheless the pattern all of them are operating inside. Individual constraint and collective consequence are both real. Acknowledging one doesn’t dissolve the other.
The management writing industry has spent this same period building an elaborate architecture of purpose, meaning, and psychological safety. Most of the people who built it, and most of the people who bought it, are not cynics. They were trying to do something real. But there is a particular kind of self-deception available to people who are genuinely trying, the kind that lets you attend the psychological safety workshop in the afternoon without connecting it to the capital allocation meeting in the morning. The kind that lets you hold both realities in the same week without feeling their weight against each other.
This is not an argument about tax policy or labor law, though both matter. It’s an argument addressed to managers: people whose decisions about compensation, staffing, and resource allocation are neither purely personal nor purely systemic. They are something in between, which is precisely where agency lives. The question of what falls within that space is not answered by pointing to what falls outside it.
The research doesn’t adjudicate between purpose and pay. It sequences them. When people must choose, the material floor comes first, not as a preference but as a need. Everything else is built on top of it. An organization that has not secured that floor for its people, while demonstrably holding the resources to do so, is not facing an engagement problem.
It is facing the question it has been avoiding.
1 Annual S&P 500 buyback totals: 2020— $519.8B; 2021— $881.7B; 2022— $922.7B; 2023— $795.2B; 2024— $942.5B. Total: $4.06 trillion. For context, Germany’s nominal GDP in 2024 was approximately $4.66 trillion. The five-year buyback total represents roughly 88% of that figure.
Sources
NBER Working Paper
Benjamin, D.J., Cooper, K., Heffetz, O., Kimball, M.S., & Kundu, T. (2025). What Do People Want? NBER Working Paper No. 33846. nber.org/papers/w33846
Federal Reserve — $400 Emergency Expense
Board of Governors of the Federal Reserve System. (2025). Economic Well-Being of U.S. Households in 2024. federalreserve.gov
Wage Growth vs. Productivity
Mishel, L., and Kandra, J. (2026). The Productivity-Pay Gap. Economic Policy Institute. epi.org/productivity-pay-gap
U.S. Bureau of Labor Statistics. Labor Productivity and Costs, Nonfarm Business Sector. bls.gov/lpc
Pew Research Center. (2018). For most US workers, real wages have barely budged for decades. pewresearch.org
Distribution of Economic Gains
Pew Research Center. (2015). The American Middle Class is Losing Ground. pewresearch.org
Stock Buybacks
S&P Dow Jones Indices. (March 2025). S&P 500 Q4 2024 Buybacks Increase 7.4% and 2024 Expenditure Sets New Record. prnewswire.com
S&P Dow Jones Indices. (March 2022). S&P 500 Buybacks Set Quarterly and Annual Record. prnewswire.com
Rule 10b-18
U.S. Securities and Exchange Commission. (1982). Rule 10b-18. 17 CFR § 240.10b-18. sec.gov
Food Budget Shortfall
Feeding America. (2025). Map the Meal Gap 2025. feedingamerica.org
Two-Income Households
Bureau of Labor Statistics. (April 2025). Employment Characteristics of Families — 2024. bls.gov
Child Food Insecurity
USDA Economic Research Service. (December 2025). Household Food Security in the United States in 2024. ers.usda.gov
Germany GDP
World Bank National Accounts Data. GDP (current US$) — Germany, 2024. data.worldbank.org
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photo by Joss Woodhead