How to put a value on work?
Auckland University economics professor and labour market expert Sholeh Maani says wages have changed with how we produce things and what industries matter.
We’ve moved from agriculture, to industry to manufacturing, and now to an economy based on services. Wage rates depend on the uniqueness of your skill and the demand for that expertise, Maani says.
‘‘When we look at distribution of wages, we notice it’s become skewed. So in the past 2-3 decades, the earnings for high-skilled workers have increased much faster than the increase to wages for the lower end of the wage distribution due to market forces. This has caused income differences that have become wider and wider across the Western World.’’
Rosenberg says services used to be seen as ‘‘the leech on the real economy’’. But that view has changed.
But the value of lawyers and accountants charging out at hundreds of dollars an hour, and especially of the burgeoning finance sector, is more controversial, he says.
An attempt by British think tank New Economics Foundation to value the contribution of different occupations to society estimated investment bankers earning between £500,000 and £10 million destroyed £7 of social value for every £1 of value they created. Tax accountants came out worst, destroying £47 of value for every £1 in value they generated, because they used their skills to help rich people avoid tax.
The researchers estimated hospital cleaners, on the other hand, created more than £10 of social value for every £1 they were paid.
Maani says the increased complexity of regulations and international trade means we probably do need more lawyers and accountants.
But other factors have further skewed wage relativities, she argues. Few would dispute the value of nurses and teachers. But, unlike accountants, they can’t play one employer off against another to get the best price.
Maani is a big fan of the market, which she rates as up there with the invention of the wheel. But it can be cruel.
‘‘The experience of the pandemic has shown us how important these essential workers are to our wellbeing, to our lives. We have identified that we can’t live without their contribution.
‘‘Then it would seem very hypocritical that once this pandemic is over we forget about it completely and leave the market to decide if these wages are low or whether they’re sufficient for a reasonable standard of living based on fulltime work.
‘‘There is nothing in the market structure that can decide or correct inequalities. The market is wonderful for helping us resolve a number of other economic problems, such as what to produce, what price to set, how to distribute it, but an equitable outcome is something beyond the capabilities of the market, so maybe we have come to rely on it too much.’’
Auckland University economics professor Tim Hazledine’s big bugbear is the rise and rise of managers’ pay. When Hazledine started at Auckland University 28 years ago the vice-chancellor took home less than double what the professors earned. Now he earns four times their wage.
‘‘The big gap is between working and middle classes and the top people – that’s where it’s really stretched out.
‘‘In America about 30 or 40 years ago, the ratio of CEO to shop floor worker used to be 30 to 1, now it’s 300 to 1. I think that’s the big one.
‘‘It’s not just a few tens of thousands of chief executive officers. In their train they drag up the next level and the next level and the next level. In my research I find it’s the bulking up both of numbers and of pay of managerial jobs. That’s the most striking thing that’s changed.’’
On the outer
The life of 50 intermediate school kids is worth less than the pristine state of our kiwifruit crop. At least that’s what Bob Bowkett’s pay packet would tell you.
For $21 an hour, the 76-year-old ferries around the young and old of Tauranga. His wife earns ‘‘a damn sight more’’ working in kiwifruit quality control. Which is just as well, as Bowkett can’t see how bus drivers – especially those with children – survive on one wage. Some moonlight as taxi or courier drivers just to pay the bills.
‘‘A truck driver, who has no passengers and only takes cargo, ends up with $25 or $28 an hour. A tanker driver is on about $32 an hour. It just shows you the discrepancy. We’re taking the nation’s children around and we get paid a pittance against the other drivers.’’
There’s also risk. While some passengers bring Christmas presents, others deliver unwelcome surprises. A young guy once yanked him off his seat, trying to pinch his cash tin.
Bowkett reckons drivers were better off in the ’80s, when they got extra for weekends and overtime and public holidays. Now some drivers work 13-hour split shifts, with four hours in the lunchroom.
He blames the competitive tendering process that sees bus companies bidding against each other. ‘‘That’s killed drivers being able to get a decent wage. Because the companies go in at such a low tender to get it, the only way they can keep their head above water is to cut wages or maintenance.’’
It’s contracting out that is also hurting Barry. In district health boards that employ security guards directly, they earn between $20.20 and $24.58 an hour, depending on qualifications and experience. At weekends, they get up to $36.87. But where the job is contracted, as at Barry’s DHB, they can earn as little as the minimum wage of $18.90.
That, says E Tu¯ director of organising Sam Jones, is ‘‘diabolical’’, given a review of 13 DHBs identified more than 5000 security incidents in 12 months, including 230 reported assaults. Guards have been stabbed, bashed with oxygen cylinders and suffered injuries requiring more than a year of recovery.
‘‘There’s this really essential frontline workforce in a situation where there’s increasing violence and incidents and an increasing need for them . . . It’s a pretty dire situation.’’
Barry thinks DHBs should pay contractors more so they can lift guards’ pay to at least the living wage of $22.10. ‘‘We’re just asking for a wage which we can live on properly, without stress and worry. Because stress and worry is another thing that gets to everyone really really big.’’
* Names changed to prevent recriminations for speaking out.