A big raise provides significant boosts in happiness even at household incomes of $500,000, according to a new research report.

A wealth of research has long shown that more money makes a big difference to people with low pay, moving them from insecurity to stability. Above that level, the effect is often assumed to be much smaller.

But according to a paper by Matt Killingsworth , a senior fellow at the University of Pennsylvania’s Wharton School, the bonuses and leaps in income high earners reap are so large that they keep adding to well-being in the same way that smaller pay bumps do at lower tiers of earnings.

“I think of this as a ladder across society. The rungs are separated by more and more dollars, but exactly the same amount of happiness,” said Killingsworth, who published his report on his Happiness Science website.

An academic paper in 2010 popularised $75,000 as the salary threshold beyond which earning more money didn’t make people any happier. More recent research indicates that there is no such plateau.

Killingsworth and other researchers stress that many things influence human happiness, including your relationships, your job and the country you live in.

“No single factor, including money, dominates the equation,” Killingsworth said.

Previous studies on money and happiness have consistently demonstrated two things: that richer people are happier, and that it takes progressively more money to keep generating a well-being boost of a given size.

Killingsworth says that many people draw the wrong conclusion from that latter finding. They assume that money makes the biggest difference on Americans’ happiness at lower levels of income.

His paper suggests this assumption is wrong. That is because earnings surge exponentially across the income distribution, offsetting money’s diminishing returns on happiness even at the high end.

The lowest-earning 20% of U.S. households on average brought in about $23,000 before taxes in 2021, and the middle 20% earned about $87,000, according to the latest data from the Congressional Budget Office. The top 20% averaged roughly $418,000, with the very highest earners making significantly more than that.

“It could be entirely reasonable for an individual to continue aspiring to climb one more rung in the income ladder” to pursue happiness, Killingsworth writes in his paper.

Even Americans earning a lot of money wish they could do just that. Last year, survey respondents with incomes of $200,000 or more said that the median income they would need to be happy and less stressed was $350,000, according to data from the financial-services company Empower.

More money doesn’t guarantee more happiness. The side effects vary. Some who receive big raises later report big letdowns. Others who voluntarily take a pay cut say they are glad they did.

Falling interest rates and recovering real wages will help drive a slight pickup in global economic growth this year and next, while recent falls in oil prices could aid the final push to tame inflation, the Organization for Economic Cooperation and Development said Wednesday.

However, the Paris-based research body warned that “comparatively benign” projections may not come to pass, with uncertainties remaining about how large an impact high interest rates will have on demand in the months ahead, while an escalation of the conflicts in the Middle East could push oil prices sharply higher.

In its quarterly report on the economic outlook, the OECD said it now expects global output to increase by 3.2% in 2024 and again in 2025, having grown by 3.1% last year. That was a slight upgrade from the 3.1% growth it forecast in May, and a sizable revision from the 2.7% expansion it expected to see when it published forecasts at the end of 2023.

The U.S. is largely responsible for that better performance, but India and Brazil are also growing more rapidly than expected, as is the U.K. By contrast, Germany and Japan have disappointed, with the former now forecast to hover on the brink of stagnation this year, and the latter to experience a small contraction.

However, despite the improved outlook for growth, and inflation rates that the OECD expects to fall to central-bank targets by the end of next year, consumer confidence has yet to pick up significantly, which would give a further boost to growth.

The OECD said that persistent dissatisfaction with economic performance, which is not limited to the U.S., is likely linked to the fact that food prices remain well above their pre-pandemic levels.

“There is a disconnect between how the economy is perceived and how the economy is doing,” said Alvaro Pereira , the OECD’s chief economist. “For people who go to the supermarket, food prices relative to wages are still higher.”

In the U.S., the gap between food-price and wage inflation between the end of 2019 and the second quarter of this year was roughly four percentage points. But that gap was much wider in large European economies, and above 15 percentage points in Germany. In South Africa, it was above 20 points.

The recent fall in oil prices may help offset some of that dissatisfaction, and boost a global fight to tame inflation that appears to be in its final stages. The OECD estimated that the 10% decline since July would knock half a percentage point off the global rate of inflation, if it were to be sustained. But it is far from certain that it will be.

“If the conflict in the Middle East escalates, this will have an impact on energy prices,” Pereira said.

Should escalation be avoided, the OECD said further falls in oil prices could allow for a faster reduction in central-bank interest rates than it currently expects, and boost growth in countries that don’t produce oil.

With inflation rates set to fall further, the OECD said central banks should lower their key interest rates, but in a manner that is “carefully judged” to ensure price rises continue to slow. It expects the Federal Reserve’s key rate to fall by a further 1.5 percentage points by the end of 2025, while the European Central Bank’s key rate is forecast to fall by 1.25 percentage points.

The Paris-based body said the interest-rate rises that central banks announced in 2022 and 2023 to counter a surge in inflation continue to weigh on growth, although with diminishing force.

But it noted that many households and businesses continue to see the interest rates they pay rise as their debts mature and they enter into new contracts. The OECD estimated that almost a third of rich-country corporate debt is due to mature in 2026, with new debt issued to replace it likely paying a higher rate of interest.

The OECD left its forecast for U.S. growth in 2024 unchanged at 2.6%, and also retained its 4.9% projection for China. Pereira said the package of stimulus measures announced by the Chinese government Tuesday could lead to a “slight” upward revision when the OECD next releases growth forecasts in early December.

To get what you want, try closing your mouth.

A well-deployed silence can radiate confidence and connection. The trouble is, so many of us are awful at it.

We struggle to sit in silence with others, and rush to fill the void during a pause in conversation. We want to prove we’re smart or get people to like us, solve the problem or just stop that deafening, awkward sound of nothing.

The noise of social media and constant opinions have us convinced we must be louder to be heard. But do we?

“I should just shut up,” Joan Moreno , an administrative assistant in Spring, Texas, often thinks while hearing herself talk.

Still, she barrels on, giving job candidates at the hospital where she works a full history of the building and parking logistics. She slips into a monologue during arguments with her husband, even when there’s nothing good left to say. She tries to determine, via a torrent of texts, if her son is giving her the silent treatment. (Turns out he just had a cold.)

“I should have just held it in,” she thinks afterward.

We often talk ourselves out of a win. Our need to have the last word can make the business deal implode or the friend retreat, pushing us further from people we love and things we want.

“Let your breath be the first word,” advises Jefferson Fisher , a Texas trial lawyer who shares communication tips on social media.

The beauty of silence, he says, is that it can never be misquoted. Instead, it can act as a wet blanket, tamping down the heat of a dispute. Or it can be a mirror, forcing the other person to reflect on what they just said.

In court, he’ll pause for 10 seconds to let a witness’s insistence that she’s never texted while driving hang in the air. Sure enough, he says, she’ll fill the void, giving roundabout explanations and excuses before finally admitting, yes, she was on her phone.

For a mediation session, he trained a client to respond in a subdued manner if the other party said something to rile him up. When an insult was lobbed, the client sat quietly, then slowly asked his adversary to repeat the comment. No emotional reaction, just implicit power.

“You’re the one who’s in control,” Fisher says.

Acing negotiations

To be the boss, “you gotta be quiet,” says Daniel Hamburger , who spent years as the chief executive of education and healthcare technology firms.

He once sat across the negotiating table from an executive who was convinced his company was worth far more than Hamburger wanted to pay to acquire it. What Hamburger desperately wanted to do was explain all the reasons behind his math. What he actually did was throw out a number and then shut his mouth.

Soon they were shaking on a deal.

Hamburger, who retired last year and now sits on three corporate boards, also deployed strategic silence when running meetings or leading teams. If the boss chimes in first, he says, some people won’t speak up with valuable insights.

Days into one CEO job, Hamburger was confronted with two options for rewriting a piece of the company’s software. He didn’t answer, and instead turned the question back on the tech team.

“People were like, ‘Really? Are you really asking?’” he says. By morning, he had a 50-page deck from the team outlining the plan they’d long thought was best. He left them to it, and the project was done in record time, he says.

A day without speaking

Staying mum can feel like going against biology. Humans are social animals, says Robert N. Kraft , a professor emeritus of cognitive psychology at Otterbein University, in Ohio.

“Our method of connecting—and we crave it—is talking,” he says, adding that it excites us, raising our blood pressure, adrenaline and cortisol.

For years, Kraft assigned his students a day without words. No talking, no texting. Some of the students’ friends reported later that they’d been unnerved. After all, silence can be a weapon.

Many students also found that when forced to listen, they bonded better with their peers.

When we spend conversations plotting what to say next, we’re focused on ourselves. Those on the receiving end often don’t want to hear our advice or semi related anecdotes anyway. They just want someone to listen as they work through things on their own.

The question mark trick

Without pauses, we’re generally worse speakers , swerving into tangents or stumbling over sounds.

Michael Chad Hoeppner , a former actor who now runs a communications training firm, recommends an exercise to get used to taking a beat. Ask one question out loud, then draw a big question mark in the air with your finger—silently.

“That question mark is there to help you live through that fraught moment of, ‘I really should keep talking,’” Hoeppner says.

At a cocktail party or in the boardroom, you can subtly trace a question mark by your side or in your pocket to force a pause.

Sell with silence

Fresh out of college, Kyler Spencer struggled through meetings with potential clients. Some sessions stretched to two hours and still didn’t end in a yes.

The financial adviser, based in Nashville, Ill., realised he was rambling for 15-minute stretches, spouting off random economic facts in an attempt to sound savvy and experienced.

“I basically just bulldozed the meeting,” says Spencer, now 27.

He started meditating and doing breathing exercises to calm his nerves before meetings. He now makes sure to stop talking after a minute or two. The other person will jump in, sharing about their life, fears and goals. It’s information Spencer can use to build trust and pitch the right products.

His client list soon started filling up, and happy customers now send referrals his way.

“It’s amazing,” he says, “what you learn when you’re not the one talking.”

The art market is grinding through a rough patch, and no one is feeling the pain more than Sotheby’s.

The sales downturn, driven in part by China’s economic slowdown, wars and volatile U.S. elections, has hit at a crunchtime for the auction house’s highly leveraged billionaire owner, Patrick Drahi , who is fighting fires amid restructuring in his broader telecom empire, Altice .

Sotheby’s had been riding a rollicking art market wave in recent years, bringing in at least $7 billion in sales annually and setting record-level prices for trophies by Gustav Klimt and René Magritte.

Now, amid signs cash is running low, it is pushing off payments to its art shippers and conservators by as much as six months. Several former and current employees said Sotheby’s this spring gave senior staffers IOUs instead of their incentive pay. And at a meeting this month of higher-ranking executives, some executives expressed worries about whether the company would be able to keep paying its employees on time, according to a person familiar with the discussion.

Drahi has at the same time been under pressure to slash the crushing debt of roughly $60 billion at Altice. The conglomerate’s French arm is now going through restructuring talks with creditors, with the U.S. arm expected to enter restructuring talks later. Some Wall Street analysts had hoped Drahi might sell part of Sotheby’s to help bolster Altice.

Sotheby’s itself carries $1.8 billion in debt, almost double the level it had before the Franco-Israeli billionaire purchased it in 2019. The value of its bonds swooned in the first half of the year as investors worried that declining sales and higher interest rates would choke off the company’s cash flow.

The auction house received a lifeline with a $1 billion deal to sell a stake to Abu Dhabi sovereign-wealth fund ADQ , announced Aug. 9 but not expected to close until later this year. At the time, Drahi said he would contribute an undisclosed amount as part of the deal.

As it awaits the funds, Sotheby’s is toeing a high-wire act with an uncertain outcome.

Charles Stewart , Sotheby’s chief executive, dismissed fears about Sotheby’s financial standing as overblown, and the company disputed the meeting with higher-ranking executives occurred. Stewart said the company’s bonds, which have rebounded in price since the ADQ rescue was announced, are proof that Sotheby’s has smoothed over any worries. He said the ADQ investment will position the house for growth moving forward. “It’s a massive credit positive,” he said.

A Sotheby’s spokeswoman said: “Under Mr. Drahi’s ownership, Sotheby’s is significantly larger, more diversified and more profitable than ever before. During this period, we have invested hundreds of millions to enhance our facilities, technology and expand our offerings to clients.”

ADQ declined to comment.

The crisis at Sotheby’s comes at a time when the entire art market is reeling . Over the past year, collectors who see art as a financial asset have winced as higher interest rates and inflation made it more expensive to trade art. Contemporary art buyers have also suffered sticker shock after years of paying ever-higher prices for emerging artists—who may never pay off. Some smaller galleries, who rely on collectors to vouch for unknown artists, have shuttered, while dealers have reported lacklustre sales at art fairs.

Those factors have hurt collectors’ overall confidence. “I don’t feel like there’s a bunch of collectors waiting out there to save the day this time,” said Dallas collector Howard Rachofsky.

Growing debt load

Drahi, 61 years old, is famous for taking on a mountain of debt to build telecommunications empire Altice, which operates in the U.S. and Europe. He borrowed from Wall Street when interest rates were low, but now that rates have risen sharply, he has started selling off chunks of his companies to lower his debt burden. Last month, his Altice UK sold a 24.5% stake in its BT Group to the Indian international investment arm of Bharti Enterprises in a deal valued at roughly $4 billion.

Drahi used a similar high-debt strategy to buy Sotheby’s in 2019 for $2.7 billion. Drahi issued $1.1 billion in new bonds and loans to finance the deal, and separately also assumed some portion of Sotheby’s existing $1 billion debt.

He has since spent lavishly, including signing a deal to pay at least $100 million for New York’s Breuer building, a Madison Avenue showpiece once home to the Whitney Museum of American Art and temporarily used by both the Metropolitan Museum of Art and Frick Collection. The company is planning to move in at the end of next year and to lease out part of its current glassy headquarters closer to the East River in Manhattan. Sotheby’s has spent tens of millions more to renovate new luxury-retail-style spaces in Paris and Hong Kong.

Drahi also expanded Sotheby’s ability to auction multimillion-dollar homes by buying a chunk of real-estate seller Concierge, and added RM Sotheby’s, an entity that sells high-end cars.

At the same time, the owner has pulled funds out of the company via dividends. In total since the purchase, Sotheby’s has paid out $1.2 billion of dividends to a parent company controlled by Drahi, according to New Street Research.

The ballooning debt didn’t draw much attention during flush years when an influx of newly wealthy collectors from across China, Russia, the Middle East and even the world of cryptocurrency were clamouring after Sotheby’s offerings.

That changed when the market cooled. Sotheby’s told its bondholders the auction portion of the business had a loss of $115 million in the first half of the year, compared to a $3 million profit in the first half of 2023, according to a copy of Sotheby’s unaudited financials for the first half of the year reviewed by The Wall Street Journal.

Rival Christie’s, owned by luxury magnate François Pinault , has also taken a hit, with its auction sales dropping nearly a quarter during the first half of the year.

Sotheby’s adjusted operating free cash flow fell to $144 million in the 12 months ended June 30, a 43% decline from the same time last year, according to data from New Street Research. The figure measures whether a company is making enough money to pay its bills and turn a profit.

Credit rating firm Moody’s Investors Service in February knocked down the ratings for Sotheby’s bonds to B3, one of its lowest categories of junk debt, specifically citing the dividends paid out. “The downgrade also reflects governance considerations, particularly the company’s decision to continue dividend payments out of its credit group in 2023 despite its operating performance deterioration,” Moody’s said in its decision. S&P downgraded the debt into deep junk territory in June.

Stewart said the company’s credit rating has been lower since the Drahi purchase. He said its updates to bondholders revolve around its auction performance only and don’t include fees from the company’s real-estate holdings or financial-services arm, which Stewart said remain in the black. He declined to divulge the company’s full financial figures.

Stewart also said the dividends remain in the Sotheby’s ecosystem and aren’t being redirected to shore up Drahi or his other businesses.

Drahi’s arrival

Sotheby’s was flush with cash but lagging behind Christie’s in 2018 when Tad Smith, the auction house’s then-CEO, suggested to his board that it find a buyer. The company had been public for three decades, but Smith believed the demands for public shareholder returns hampered its ability to go toe-to-toe with the bigger and privately held Christie’s.

In early 2019, the board let Smith make overtures to prospective buyers, including an entity connected to Abu Dhabi’s royal family that expressed interest, according to a person familiar with the negotiations. Drahi moved more quickly and emerged as the winner.

At first, the art establishment didn’t know much about Drahi. The self-made billionaire was born in Morocco, educated in France and has homes in Switzerland and Israel. He was familiar to Sotheby’s staffers in their Tel Aviv office but wasn’t widely known in art circles.

At the time, he was a traditional collector of 19th- and 20th-century artists rather than trendier, contemporary ones, owning pieces by Pablo Picasso, Henri Matisse and Marc Chagall. But he didn’t sit on major museum boards or pop up regularly on the art-fair circuit.

The Sotheby’s purchase marked Drahi’s first foray into luxury. The art world wondered if he would manage a house that started off auctioning books in London in 1744 the same way he ran his broadband communications companies, where he was known for aggressively cutting costs and using debt to fuel ambitious expansions.

Drahi told Sotheby’s he saw the company as an investment for his family, regularly dismissing rumors he was teeing up Sotheby’s to be resold. In 2021, Sotheby’s promoted his son Nathan, then 26, to run Sotheby’s operations in Asia, a key market.

As part of the sale, Sotheby’s divided its various endeavours—such as its real-estate arm and its financial services arm, which lends against people’s art collections—into affiliated but separate entities from the main unit, which handles Sotheby’s auctions and private art sales.

Stewart said Drahi’s move was intended to keep each division nimble.

The art-world ecosystem noticed Drahi’s arrival in other ways. Soon after the sale, a network of smaller companies that auction houses typically enlist to conserve, frame, crate and ship its art around the world said they got word that the house would be lengthening its pay schedules, from a typical month to two or more. One conservator said payments started to arrive six months after a job was completed.

Sotheby’s also started paying sellers more slowly than its rivals. In the past, both Sotheby’s and Christie’s asked winning bidders to pay for their pieces within 30 business days of a sale, and then paid sellers five days later. Sotheby’s changed its contracts to allow it to pay sellers 15 days later, according to sellers familiar with the house’s contracts. The move allowed the house to hold the funds in its coffers longer.

Sotheby’s said its processing deadlines have been in place for many years to allow the company to adequately process payments.

Pay for top talent

When the pandemic hit, Drahi and his management team reoriented the company to sell art online, a pivot Sotheby’s is credited with embracing faster than its rivals.

Sotheby’s also started laying off staff during the lockdown, and continued to do so after the pandemic. When the ever-swirling calendar of fairs and museum openings and biennials got under way again, advisers including Philip Hoffman of the Fine Art Group said they noticed fewer Sotheby’s staffers turned up. The company would send one or two rainmakers, not a whole team.

Stewart confirmed the pandemic-related staff cuts “like many other companies” and winnowed travel were meant to make the company more efficient, though he said it remains “mission critical” to put its top specialists in front of collectors.

Drahi needed Sotheby’s key dealmakers to remain in place. High-end art deals at auction houses are wrangled primarily by a handful of executives and specialists able to cultivate an air-kiss closeness with collectors. They also must be able to discern a fake Picasso from a real one, and price it to sell well in good markets and bad.

In 2021, Drahi revised the incentive pay program for these top performers. In exchange for accepting an immediate pay cut of up to 20%, employees were told they could expect a cash payout in three years based on the company’s performance and representing up to half of their total compensation.

Some powerful executives still left, dealing a blow to the auction house. Patti Wong , Sotheby’s former international chairman for Asia, now works as a private adviser, and Brooke Lampley , its former global chairman of fine art, is now a senior director at the blue-chip gallery Gagosian.

When the delayed payout came due, staff were told in conference calls—some say last fall and others say in March—that it needed to be postponed; enrollees were issued promissory notes this spring instead, according to several former and current specialists. Specialists said they now are hoping to get paid by year’s end with a portion of the Abu Dhabi funds.

The company disputed the description of the incentive program but declined to give further details.

New fees for sellers

In February, Sotheby’s shocked the art world when it fundamentally restructured the way it collects fees for works that it auctions.

Both Sotheby’s and Christie’s, in efforts to bring sellers to their doors, often waived their fees. They even shared with sellers increasingly fatter slices of the fees they charge buyers—which can add up to roughly 27% to a work’s winning price.

At the same time, buyers have bristled over the fees they pay. Rachofsky, the Dallas collector, said he has long agitated that “auction fees are unsustainably high.”

Sotheby’s new fee plan, which went live in late May, now charges buyers a flat 20% for anything it sells for $6 million or less, and 10% for anything it sells for more. For sellers, Sotheby’s charges a fee of 10% on the first $500,000 of anything it sells for $5 million or less. Terms for larger deals continue to be negotiated.

Christie’s and smaller house Phillips said they also charge an undisclosed seller’s commission, but their fee is negotiable.

Stewart said the goal is to create a system that is “simpler and fairer.”

It’s too soon to tell if Sotheby’s new fee structure will help or hamper its effort to win consignments. Sotheby’s has landed the prized estate of the season, an estimated $200 million collection amassed by Palm Beach beauty mogul Sydell Miller that includes a Claude Monet water lily scene estimated to sell for $60 million. The collection will headline the November sales.

Art adviser Anthony Grant said one of his collectors reasons that Sotheby’s might hustle harder to find bidders for each work now that they’re charging sellers a fee to do so. But Grant said he worries the change could also steer sellers of midmarket pieces to other houses who may not charge them extra for anything.

“It’s one more thing that’s gotten harder for them,” he said of Sotheby’s, where he once worked.

Asia is expected to play a crucial role in Sotheby’s prospects. In recent years, newly wealthy bidders in Asia—spanning mainland China to Seoul to Singapore—have been relied upon to mop up art at the highest levels even when collectors elsewhere held back. Now, China’s economy has slowed, sparking fears about its buyers’ willingness to splurge on blue-chip art.

Instead of scaling back, the major auction houses are all doubling down on the region. Sotheby’s and Christie’s both just opened luxurious new spaces in Hong Kong. Sotheby’s Maison space in Hong Kong’s Central neighborhood, opened in late July, said it has already had 300,000 visitors.

This month, on the eve of what was supposed to be its inaugural fall sale series in Hong Kong, the house announced it was pushing back these sales to November. Advisers who work in the region said the move left the impression that the house had failed to gather enough marquee material.

Sotheby’s said the calendar shift gives it more time to organise shows and a sale lineup, and said the delay wasn’t because the art was too tough to source. It cited its plan to sell an estimated $30 million Mark Rothko from 1954, “Untitled (Yellow and Blue),” in Hong Kong later this year.

Collector and dealer Hong Gyu Shin initially consigned an Oscar Wilde manuscript of “The Picture of Dorian Gray” to Sotheby’s to offer in its Hong Kong sales, he said, but he later changed his mind. He said he wanted the auction house to revel in the piece, which contains Wilde’s own handwritten edits, and he wanted to brainstorm the best way to position it to buyers. Instead, there was little conversation after the paperwork was signed.

“Specialists used to be so excited,” he said, “but now they just slap an estimate on it. When you have historical work, it’s a form of art to sell it.”