There is a view that those who work in higher paying jobs contribute more to New Zealand than those in low-end jobs. I see it on this blog sometimes. I’ve been reading some research debunking that and some of the other myths around pay and work.
Some of you may have caught the interview on Checkpoint recently about the research from the New Economics Foundation, (a UK think-tank) called “A Bit Rich? – calculating the real value to society of different professions.”
A Bit Rich looks at whether those that get more contribute more to society. A number of professions were chosen from across the private and public sectors. Three are low paid – a hospital cleaner, a recycling plant worker and a childcare worker. The others are highly paid – a City banker, an advertising executive and a tax accountant.
The research examined the contributions these jobs make to society, and found that it was the lower paid jobs which involved more valuable work. For example, for for every £1 bankers make, they destroy £7 of social value. Whereas for every £1 childcare workers are paid, they generate between and £9.50 worth of benefits to society. For every £1 a hospital cleaner is paid they generate over £10 in social value, but an advertising executive destroys £11 for every £1 in value they generate.
The report goes on to challenge ten of the most popular myths surrounding pay and work. People who earn more don’t necessarily work harder than those who earn less. The private sector is not necessarily more efficient than the public sector. And high salaries don’t necessarily reflect talent.
The report concludes with a series of policy recommendations that would reduce the inequality between different incomes and reconnect pay with the value of work. These include what they call “ending the policy silence on high pay” and advocating a national maximum pay differential – a recommendation that’s bound to get some people going!
Have a read, and while you’re at it, check out their other research on economics and the planet.
It’s a real jungle out there! Yay for cleaners
Just stand on a corner of Quay st in Auckland at 5:15 Pm on a week night to see the BMWs and Range Rovers roar past on the way to the eastern suburbs would dispel any myths about the high earners working late ( they start late as well ). Sure the CEOs of public companies , as hired guns they have to set the tone, put in the hours but the owners of medium and small businesses are out the door pronto
“There is a view that those who work in higher paying jobs contribute more to New Zealand than those in low-end jobs. I see it on this blog sometimes.” Where? I’ve never seen it before…..
Without taking away from the great work they do, cleaners always have the option of getting further skills through training and education to better their chances of securing a higher paying job. I can’t see any right-thinking business paying someone on the perceived social value of their job.
I slogged my guts out to pay for my uni degree without a student loan, and naturally I expect to get a decent remuneration level in return to reflect the effort I put in and skills I got out of it. Of course I could have just been a cleaner, which requires a negligble level of skills.
I also don’t think everything is fair, and concede there are many people who don’t deserve the pay they get, but overall I do think if you put the effort in, you get something in return.
@Kiwireader
You might have been through Uni (And well done by the way)
I just wanted to point out that childcare workers also have to go through Uni for 3 or more years, why don’t can’t their pay reflect how much effort they have put put in?
@mother – thanks for pointing that out. Talk about assumptions.
@nOexit – you should search back through comments on low pay – they are there.
@Kiwiread –
The research addresses this in Myth 2 : Low paid jobs create a ladder for people to work their way up – opportunities to advance are open to all –
“For the ablest children of our recyling plant workers to climb the ladder, an equivalent number of City bankers’ children would have to move down. Those with high incomes can protect their position and that of their children by buying assets and advantage. This means that the ladder offering opportunity to others is effectively kicked away…….“
I agree with you Darien that the research is worth reading as it does challenge a whole lot of myths about the relative value of work, some of which are reflected in the comments to your blog.
Well done for picking this up and for alerting readers to the Checkpoint interview as well.
@ kiwireader
The cleaners are putting the effort in – they’re just not being paid what they’re worth.
The selection bias in the method robs the study of any validity. Instead of a hospital cleaner and a childcare worker they could have picked a fast-food cook and a telemarketer, instead of a banker and ad executive they could have picked a cardiac surgeon and director of a recycling company. Then you’d have ‘proved’ that well paid people are more valuable to society than low-income workers.
Well said Darien. Obviously, opportunities to advance can’t be open to all – you cannot have a society that is made up entirely of highly paid professionals. It is a variation on the claim that anyone can be the president of the US – anyone, yes, but not everyone. And I have often thought that society would be better off if certain well-paid jobs were not done at all – radio-talk-back host just for starters, and most of PR, most of advertising could go without causing much grief. But cleaning and rubbish collection could not be removed without everyone feeling it.
@Danyl. The given examples do what they set out to do – they show that the amount of pay does not necessarily reflect the contribution a job makes to society. The person offering the argument can take your examples on board without changing their conclusion, since you are showing instances in which pay does seem to reflect the value of the occupation, but are not eliminating instances in which it does not.
Danyl – but this report doesn’t ‘prove’ that ALL low paid workers are more valuable than ALL high paid workers. It only shows that your value to society is not necessarily related to your pay, and this can be done with a few examples of where it is not the case. And from there it encourages us to think about whether our society is currently doing a good job of properly rewarding people who deserve it, or not.
I see you guys will believe anything so long as someone claims to have done research on it.
I must ask how does a profession such as baking ‘Destroy social value’?
How do they determine what social value there is in a job, how do they determine a monetary value for it?
I would suggest they had decided their outcome and defined their variables, measurements etc to get the outcome they wanted.
Anyone can write a report, but the only credible research is that which meets recognised academic standards, and those standards would be framed to eliminate suggestions of bias. There is an overall political bias evident throughout this report for example.
I must ask how does a profession such as baking ‘Destroy social value’?
It does, if and only if you ignore the counterfactual; what would happen to all those small businesses (especially the ones in NZ!) if they didn’t have access to bank funding.