The New Economics Foundation challenges one of the most fundamental tenets of conventional economics today — that the price of something can be equated to its worth. It does so by l;lloking at the worth of various jobs, and compares that worth with what people are paid to do these jobs. As it says:
How much you earn can determine your lifestyle, where you can afford to live, and your aspirations and status. But to what extent does what we get paid confer â€šÃ„Ã²worth’? Beyond a narrow notion of productivity, what impact does our work have on the rest of society, and do the financial rewards we receive correspond to this? Do those that get more contribute more to society?
Our report tells the story of six different jobs. We have chosen jobs from across the private and public sectors and deliberately chosen ones that illustrate the problem. 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. We examined the contributions they make to society, and found that, in this case, it was the lower paid jobs which involved more valuable work.
The report goes on to challenge ten of the most enduring 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 offers a series of policy recommendations that would reduce the inequality between different incomes and reconnect salaries with the value of work.
And for the record:
Determining the right amount of tax payable is a specialist skill and often requires professional support. However, some highly paid tax accountants’ sole purpose is to help rich individuals and companies to pay less tax. We found that the positive benefits to society of these activities are negligible. However, every pound that is â€šÃ„Ã²avoided’ in tax is a pound that would otherwise have gone to HM Revenue. In our model we looked at how this lost revenue could have been better spent. For a salary of between £75,000 and £200,000 tax accountants destroy £47 of value for every pound in value they generate.
I think that sums things up rather well. Now how do we price that abuse out of the market?
Disclosure: I work with NEF but had no involvement in this project