In every office, there is a group. Once or twice a week after work, they go to a nearby watering hole for "happy hour" to let off steam, talk about the boss behind his back, and maybe even plan future career moves. Do you look down on this merry group? Think twice before turning down an offer to grab a drink after work. It could hurt your finances in the long run.
A new study from The Journal of Labor Research shows that people who drink earn 10 to 14% more than those who don't drink at all. What's up? The study says that it has to do with something called "social capital." That is, the more you drink out, the more people you'll meet. The more people you meet, the more professional doors will open for you. And in business, as a general rule, it's not what you know but who you know that matters.
The study says that, in particular, people who drink at bars make more money than those who drink at home and tip the glass. It's all about social capital, which the study defines as "a person's social characteristics, such as social skills, charisma, and the size of his Rolodex, that allow him to get market and nonmarket returns from interactions with other people." People who drink in bars have a lot of it. People who drink alone have a little less, and people who don't drink have even less.
The study says that people who don't drink might avoid social events that involve drinking, and if they don't, they might hang out with other people who don't drink or people who aren't as social. People who don't drink might also think that people who don't drink are boring and might not invite them to a party at all. People who drink socially may find it easier to get a higher-paying job or strengthen relationships with coworkers or business partners, which could have a direct effect on salary. Even though the study didn't go into detail about why nondrinkers have less social capital, it is clear that drinkers make a lot more money than nondrinkers.
For example, women who drink earn 14 percent more than women who don't drink. Men who drink alcohol often make 10% more than men who stick to soft drinks.
Men who go to their favourite watering hole often will have an even better time. Men who went to a bar at least once a month made an extra 7% on top of the 10% edge. But that's not true for women who hang out in bars. There was no clear difference between the women who went to pubs often and those who didn't.
Even though the study wasn't paid for by anyone in the alcohol industry, it was done in response to recent campaigns against alcohol on college campuses, restrictions on advertising alcohol, and higher taxes on liquor. The study's authors say that since their research shows that people who drink make a lot more money than people who don't drink, trying to stop people from drinking might hurt our ability to make money.
So the next time your cubicle mate asks you to join the crew for a drink after work, think twice before you say no. Statistics show that it might be to your advantage to say, "I'll buy the first round."
