Whenever the public becomes aware of some new example of huge salaries and huge payouts to the chief executives of big companies the response from economists (and the politicians who believe in economists) is as swift as it is predictable. Market forces they say to the tv cameras. Pay peanuts and you get monkeys. International comparisons. Value for money. Have to compete with other companies to attract good people. And so on.
You've all heard it. Strangely though when it comes to nurses and teachers there is a quite different script. Problems are obvious in the size of classes, the closure of beds in public hospitals, the waiting times in emergency areas, the relative lack of male primary teachers, the mistakes made by tired and overworked nursing staff. The same politicians will come up with all kinds of suggestions to address teacher and nurse shortage. But none of them seem to involve market forces or paying them what they are worth or having to compete with other occupations.
The public in general wants to say - just pay them more, we really value the contribution that teachers and nurses make, pay them more. But no one is listening. When questions are raised about the salaries of footballers or film stars, the economists shrug their shoulders and say - well, you can't argue with market forces, if that is what the clubs or studios are willing to pay then that is what they are worth. No point in complaining - market forces can't be argued with. Bigger salaries and high superannuation payouts and other retirement benefits for politicians? Have to pay them we are told to attract the best people into politics.
Well, okay, I will become a believer in market forces. Teachers and nurses are voting with their feet, leaving their professions, not enough money, and also the low salaries are a sign that the government doesn't value their professions highly. Market forces are the problem and the solution - pay them more. I know this is such a radical suggestion that I had better repeat it in case you missed it - pay them more. Perhaps some of these retired CEOs could donate some of their packages to the cause. Not many of us would say the CEOs should be paid more - do any of you think nurses and teachers and other public employees shouldn't be?
It is yet another case of the total failure of market forces in the real world that people doing jobs of little or no value to society, or even that actively damage our society and the world we live in, are paid huge salaries, while people who do essential jobs for the benefit of society are paid next to nothing. The ideal functioning of the pure market, do you think?
I would like to believe, with Logan Pearsall Smith, that "There is more felicity on the far side of baldness than young men can possibly imagine", but I don't think I have reached that happy state yet even on The Watermelon Blog.