 In the 1970s, CEOs were paid well, but not obscenely so (around 36 times as much as the average worker)¹. Compensation was high, but it wasn’t outrageous. Pay packages were opaque, boardrooms benchmarked internally, and the public wasn’t aware of the numbers. By 1993, however, CEO pay was beginning to balloon, averaging about 131 times as much as the average worker². That year, in an attempt to stop the rise in executive pay, federal securities regulators required firms to begin disclosing this information publicly³. The idea was that once executive compensation was public, boards would be reluctant to give executives outrageous salaries and benefits out of fear of stoking outrage. What happened next was the complete opposite. Once newspapers began publishing “highest-paid CEO” lists, every executive in the country could see how they were ranked. Nobody wants to be last on the compensation list in relation to their peers, and no companies wanted to admit they were underpaying “their” leader. In turn, compensation committees began targeting the 75th percentile of peer pay⁴. The result? CEO pay turned into an arms race, exploding to over 300 times the typical workers salary by 2000. Since 1978, it has risen by more than 1,200 percent, far outpacing worker pay, which has barely kept up with inflation¹.  *Data: Economic Policy Institute (Mishel & Kandra, 2023); AFL-CIO Executive Paywatch. Behavioral economist Dan Ariely once pointed to this same phenomenon in his book Predictably Irrational, highlighting how public disclosure reshaped how CEOs viewed their relative success⁵. CEOs who once felt rich at a few million a year suddenly felt underpaid once they saw their peers earning more. Their frame of reference changed, and contentment turned into envy. This is not an argument about whether CEOs are paid too much. The point is about the psychology of comparison. The same dynamic plays out in our lives today on social media. We compare our own lives against endless highlight reels on Instagram, TikTok, and YouTube. The feeling of financial inadequacy has become a daily struggle for many of us, not because anything changed in reality, but because our relative reference point has shifted. The Supercharged Comparison Engine Social comparison is not new; humans have always measured themselves against others⁶. But the scope of those comparisons used to be narrower: your neighbor’s car, your coworker’s promotion, your cousin’s new house. What happens when the comparison becomes constant, curated, and amplified by algorithms designed to maximize our engagement? Research suggests we experience relative deprivation: a subjective feeling of having less or being in a worse position than others who serve as our comparison group, leading to discontent or dissatisfaction. In a recent study, participants who were exposed to images of wealth on social media (luxury cars, designer goods, exotic vacations) reported significantly higher levels of relative deprivation compared to control groups. This was not just correlation; the study demonstrated a causal relationship⁷. The mechanism? That uncomfortable feeling of looking up at those who seem to have more. A particularly striking observation is that these feelings of relative deprivation do not emerge from actual financial hardship. Instead, they arise from the perceived gap between what we have and what we see others displaying. For example, you might feel completely comfortable with your finances. Your bills are paid, your savings are growing, and life feels stable. Then you scroll past an old friend from college announcing a new home or see photos of their Maldives vacation. Nothing about your situation has worsened, but suddenly it feels like you’re falling behind. This same mechanism explains why even people in the top one percent of wealth can feel financially insecure. When your reference group consists of other high earners, comparison never stops, it just scales up. Ex–Goldman Sachs CEO Lloyd Blankfein once said he doesn’t consider himself “rich,” only “well-off.” ⁸ That isn’t false modesty; it’s relative deprivation in action. No matter where you sit on the ladder, someone higher up always becomes the new benchmark. Social media has essentially turned our comparison standards into a lightning rod. Unlike passing a neighbor’s new car or hearing about a colleague’s promotion, digital platforms deliver an endless stream of perceived success. The Materialism Feedback Loop The relationship between social media, comparison, and spending creates a troubling feedback loop. Research on materialism in social media shows that platforms cultivate not only feelings of deprivation, but also stronger material values and status-seeking behaviors⁹. The desire to “keep up” drives both psychological distress and potentially harmful financial decisions (a.k.a. “excessive lifestyle creep”). An extra $300 a month for that top-of-the-line SUV trim might not sound like much in the moment; but that’s $3,600 a year spent chasing a feeling of adequacy. This is a digital evolution of “keeping up with the Joneses.” But today, we’re not keeping up with our literal neighbors. Instead, we’re keeping up with the e-Joneses: a global, curated set of peers whose struggles are invisible. On social media, everyone’s wins are public, but their financial stress, career setbacks, and private doubts are hidden. That imbalance makes comparison even harder to resist, because it’s not a fair comparison to begin with. And the effects reach far beyond spending. Comparison culture now shapes career choices, lifestyle goals, and big milestones like marriage, buying a home, or having children. We don’t just compare what we own; we compare how fast we’re “getting ahead.” As a result, ambition and anxiety have become intertwined. Social media has effectively turned relative deprivation into a business model. By showing us the slightly better version of our own lives, it fuels both aspiration and dissatisfaction at once. The more we scroll, the more we compare, and the more we feel the gap between ourselves and our peers. When Context Amplifies the Wound Digital comparison doesn’t exist in a vacuum, it intermingles with everything else happening in our lives: the economy, our careers, our personal stress. When things feel stable, upward comparisons might register as mild envy or harmless motivation. The problem amplifies when uncertainty creeps in. Research shows that during times of stress or instability, we become more sensitive to upward comparison, and the emotional cost rises¹⁰. That’s when the comparison trap stops being a background hum and turns into a blaring siren. The same scroll through Instagram that might have triggered mild envy last year when you had a job could provoke acute distress this year if you’ve lost one. With technology disrupting industries and careers in real time, that context-dependence matters more than ever. Periods of transition or uncertainty make us more vulnerable to comparison, especially when the benchmarks for success are shifting beneath us. Not All Comparisons Cut Equally When it comes to understanding our feelings and emotions, the details matter. Research on social comparison processes reveals that similarity to the comparison target (say, someone the same age with a similar career background) significantly affects the emotional impact. When we compare ourselves to someone we view as “like us,” the sting of their apparent success cuts deeper¹¹. What makes this especially powerful is how social media algorithms and user behavior interact. Our feed is often filled with people seemingly just ahead of us on the money scale. Someone our age, in our field, with a slightly nicer home or a bit more visible success. That kind of “upward but attainable” comparison is the most envy-inducing of all¹². Engagement-driven algorithms naturally amplify it. The more we pause, like, or linger on aspirational posts, the more we’re shown them¹³. Over time, the system learns to feed us people just far enough ahead to make us want to close the gap¹⁴. This explains why a former colleague’s vacation home might trigger more financial anxiety than a billionaire’s yacht. Proximity breeds comparison, and social media manufactures this proximity constantly. Building Tolerance to Our Comparative Nature Not everyone experiences relative deprivation with equal intensity. Recent research points to psychological security (a stable sense of safety and confidence) as a crucial mediating factor. Those with stronger psychological security appear more resilient to the deprivation-inducing effects of social comparison¹⁵. This suggests that the solution is not just about managing social media consumption. It is also about building internal tolerance to our comparative nature: financial confidence, a secure sense of self-worth independent of material status, and clarity about personal values versus social expectations. In other words, we need a healthier relationship with our money. One grounded in perspective, not comparison. It’s certainly easier said than done, but even in a comparison-driven world, perspective is still a choice. When that perspective feels hard to hold onto, getting outside help can make all the difference. A trusted counselor or financial planner can act as a neutral soundboard when comparison distorts reality, helping you set goals that reflect who you are, instead of who the algorithm tells you to be. The Paradox: Where Social Media Actually Help Some research suggests that interpersonal communication and the social benefits it generates can actually buffer against relative deprivation under certain circumstances¹⁶. When people use platforms to maintain genuine relationships, exchange emotional support, and build community connections, social media can enhance well-being rather than undermine it. The critical distinction appears to be between social media as a comparison tool versus social media as a communication tool. This suggests that social media platforms aren’t inherently harmful; it’s how they’re weaponized for engagement that causes the damage. A feed dominated by constant upward comparison and emotion-inducing content breeds relative deprivation. A feed centered on authentic conversation and genuine connection has the power to turn these platforms into environments that encourage contentment instead of comparison. How can we accomplish a better relationship with social media? By deliberately curating our comparison reference points. Rather than letting algorithms choose for you, make a conscious decision about whom and what you compare yourself to. The reference point shapes the emotion. Takeaways for Financial Well-Being
The Bigger Picture The relationship between social media, comparison, and financial well-being reveals something fundamental about human psychology in the digital age: our minds weren’t designed to process an endless stream of highlight reels from millions of people at once. This post isn’t about demonizing social media or romanticizing a pre-digital past. It’s about acknowledging the power current technology has on our financial psychology and making conscious choices about how we engage with it. Financial diligence in the 21st century requires more than budgeting discipline and investment knowledge. It requires mental awareness, media literacy, and intentionality. It requires actively choosing what we compare ourselves to and why. Ultimately, the goal is not to stop comparing entirely, that’s basically impossible. The goal is to compare wisely, choose our reference points consciously, and build a sense of financial well-being grounded in our actual circumstances and values rather than an algorithmically curated illusion of everyone else’s life. More Reading: Drip Pricing: How Companies Use Psychology to Make You Spend More The Comfort of Cash: What Liquidity Does for Your Mind and Money Mental Accounting: Why the Same Dollar Never Feels the Same ___________________________________________________________________ References 1. Mishel, L., & Kandra, J. (2023). CEO pay has skyrocketed 1,209% since 1978. Economic Policy Institute. 2. Frydman, C., & Jenter, D. (2010). CEO Compensation. Annual Review of Financial Economics, 2(1), 75–102. 3. Economic Policy Institute (2023). Historical data on CEO-to-worker pay ratio. 4. Bebchuk, L. A., & Fried, J. M. (2004). Pay Without Performance: The Unfulfilled Promise of Executive Compensation. Harvard University Press. 5. Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins. Festinger, L. (1954). A theory of social comparison processes. Human Relations, 7(2), 117–140. 6. Yan, Y., Fu, Y., Yang, Y., & Han, J. (2025). They shouldn’t be richer than me: How visual wealth exposure on social media increases relative deprivation. Cyberpsychology: Journal of Psychosocial Research on Cyberspace, 19(1). 7. Clifford, C. (2022, June 27). Ex-Goldman Sachs CEO Lloyd Blankfein: ‘I can’t say I’m rich, but I’m well-off’. CNBC. 8. Ozimek, P., Baier, D., & Bierhoff, H. W. (2024). Materialism in social media – More social media addiction. Current Psychology, 43, 1–14. 9. Smith, R. H., & Kim, S. H. (2007). Comprehending Envy. Psychological Bulletin, 133(1), 46–64. 10. Fardouly, J., & Vartanian, L. R. (2016). Social media and appearance comparisons: The role of social comparison orientation and algorithmic exposure. Body Image, 19, 193–201. 11. Brady, W. J., Wills, J. A., Jost, J. T., Tucker, J. A., & Van Bavel, J. J. (2021). Emotion shapes the diffusion of moralized content in social networks. Nature Human Behaviour, 5, 1295–1303. 12. Jantsch, A., König, J., & Wößmann, L. (2024). Social comparisons under pandemic stress: Income comparisons and subjective well-being during COVID-19. Journal of Happiness Studies, 25, 2013–2035. 13. Callan, M. J., Kim, H., & Matthews, W. J. (2018). Social comparison processes in the experience of personal financial deprivation. Journal of Applied Social Psychology, 48(8), 447–457. 14. Smith, R. H., & Kim, S. H. (2007). Comprehending Envy. Psychological Bulletin, 133(1), 46–64.* (for upward comparison concept reinforcement). 15. Cai, R., Liang, H., & Liu, W. (2025). The mediating and moderating roles of psychological security in the relationship between relative deprivation and subjective well-being. Frontiers in Psychology, 16, 1442. 16. Cho, J. (2014). Will social media use reduce relative deprivation? Exploring the mediating role of interpersonal communication in the social media environment. International Journal of Communication, 8, 2815–2835.
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