The Case of the Golden Handcuffs
This week on Threads, I had a viral post about the case of the Golden Handcuffs. This concept paralyzes American families and, honestly, families across the world.
Source: Threads @aleksvoinov
What is the case of the golden handcuffs?
It's unclear when the term "golden handcuffs" was first used. I read a Harvard Business Review article from 1973 that referred to the term, but the widely accepted year is 1976.
Golden handcuffs are the financial incentives and opportunities presented to employees that enable them to stay at their workplace. The theory is that the economic incentives coupled with the human need to want more will keep you locked into a job you would rather have. Why? Because this job funds your lifestyle, exiting the job will severely dent your lifestyle if you cannot find an equal or greater paying position.
The key reasons behind using golden handcuffs include:
To reduce the risk that top employees leave the organization prematurely, which would negatively impact business operations and profitability
To entice top employees to create long-term company growth
To keep top talent away from competitors
(Source: CFI)
So, how does this impact children? Let me start by saying this is my opinion, but I can see how the long-term impacts will affect a child. The golden handcuff theory has been linked to professional unhappiness. I've spoken to many adults who feel they cannot pivot due to children and ensuring their advancement in the world.
In the case of the golden handcuffs, employees get in trouble when it is paired with lifestyle creep. Lifestyle creep happens when you start making more money and your standard of living and income rise. (Source: Investopedia) With each promotion, they find themselves acquiring a new liability. This pair may distort a child's understanding of their own financial story, if not explained. So to further the conversation, I came up with these questions to consider:
💡 Ask a child (or an adult): What would you choose, more fun or stuff? Or both?
🗣️ Discussion starter: Will more things bring you more happiness?
There are no wrong answers. Just a start to a conversation.
Remember, golden handcuffs can seem like shiny rewards, but they may keep us from living a balanced and fulfilling life. It’s all about defining what success means for you, valuing our time, and teaching our kids that freedom is more valuable than things.