So who is worth more to society: someone who cleans hospitals for a living or someone who runs a bank?
The answer to that question might seem subjective. Someone flat on their back in a hospital room might have pretty strong opinions.
But Britain’s New Economics Forum (NEF) has produced some pretty thought provoking work on this subject. In A Bit Rich: Calculating the real value to society of different professions, published last month, they find with respect to hospital cleaners:
For every £1 we pay them they generate over £10 in social value. This is likely to be an underestimation, as the entire functioning of the hospital relies on them.
The NEF compares this to high paid London bankers who are some of the best paid people in the UK. They estimate that senior partners in major finance houses make between £5 million and £10 million a year while portfolio managers and traders get by on £500,000 annually. Given the economic crisis largely generated by bankers the NEF says:
Our analysis found that for every £1 in value created, £7 worth of value is destroyed by highly paid City bankers.
The report also looks at childcare workers, advertising executives, tax accountants and waste recycling workers.
Eilís Lawlor, Head of the Valuing What Matters team at NEF said:
This report is not about targeting individuals in highly paid jobs.Neither is it simply suggesting that people in low-paid jobs should be paid more.The point we are making is more fundamental – that there should be a relationship between what we are paid and the value our work generates for society.
Tom Kertes // Jan 11, 2010 at 11:54 pm
We should also keep in mind that when to work we give up time, which is a measure of a person’s worth (the worth of their time alive). Since all people are of equal worth, we should also factor this into how much we pay people, and differences in pay. This is not to say that all workers should be paid the same, just that one factor should include the equal value of our time alive, or the equal value of each and every person as a human being.
vantown // Jan 12, 2010 at 10:47 am
Tom, that is a very helpful way of looking at it. I don’t think that every person should be paid the same or even very close to the same — but every person’s work should be paid at a reasonable minimum that recognizes their fundamental worth, regardless of the job they perform. The current minimum wages are far from adequate against this test. And in fact they actually devalue a person’s time or fundamental worth — many people in the low wage workforce have to work so many hours (two, even three jobs) just to make ends meet that they struggle with exhaustion and stress and do not have adequate time to spend with their families.
Iglika Ivanova // Jan 12, 2010 at 11:21 am
Even if you subscribe to the notion that people should be paid based on the value of their contribution to their employer or client, it’s hard to argue that one person’s contribution is 100 times more valuable than another’s. Yet, these are the kinds of disparities we see in pay structure in many large corporations.