13 April 2009

Somewhere, over the rainbow...

Thinking through my fingers touches (in "What people earn") on an issue of natural justice which also exercises me. I emphasise natural justice. Like TTMF, I have no suggestions for how it can be brought about, apart from an appeal to everyone's sense of priorities – but that doesn't make the issue any less vital.

It has always (well ... since I was about fifteen or so) seemed appalling to me that one person can earn a thousand times what another earns, while the second is below the poverty line. In a healthy world (ha!) there would be a much closer ratio and a bottom limit. For example (and only for example; I'm not nailing my colours to this particular mast): a minimum income which allows a decent life, a mean (average) income of seven times the minimum and a maximum of seven times the mean would give a total range in the UK currently of £20k-£1m.

I personally think that such a range would still be too great for natural justice. My own idea of a healthy society would have a much closer set of ratios – maybe a mean of twice the minimum and a maximum of three times the mean.

Note that I am not talking about the same thing as TTMF here. TTMF invites us to reassess the relative value we place on different occupations, and to connect that with the respect we feel for them. I've something to say on that, as well.

We take it as a given, without much thought, that such differentials are natural ... but, going back to first principles: why?

One particular institution pays me dramatically more per hour worked than the administrative staff who make it possible for me to carry out the functions for which I am paid. Where is the justice in that? If either I or they are off sick, my function equally grinds to a halt - clearly we are both equally necessary.

Answers in support of this setup commonly make reference to market forces ... but that doesn't really hold water. I was once told, during a run of this argument, that "we have to recognise the investment in education and training which a profession requires – if you pay a brain  surgeon the same as a sewage worker, why would anyone bother to train as a brain surgeon?" To which I have to ask: if I were a brain surgeon, and a sewage worker's wage was raised to match mine, would I immediately choose to go down the sewers? Of course, I would not.

People take many things into account, apart from remuneration, when they choose their work. I know people who have taken a large cut in pay for the convenience of working just around the corner from where they live, or for a job which involves a high social contact element. I know doctors and lawyers who work for little or nothing in swamps, deprived urban areas, or other contexts where they find job satisfaction rewards to be high.

Carole, the administrative colleague who most closely supports my work in the institution mentioned above, was recently involved in a staff restructuring exercise. Her biggest fear was not a drop in salary, but being put in an isolated office where she would be paid more but see nobody. If she were paid the same as I, neither of us would be attracted by the other's work; we would simply be more fairly recompensed for our equally essential contributions.

I said at the beginning that I have no suggestions for how greater equity can be brought about. And so I don't, in the real world. In an imaginary world, however, I like the following idea. Anyone earning below the designated minimum annual living wage would pay no income tax. Above that income level, tax would start at a very small figure (0.001%, perhaps) and be applied only to the first "annual income currency unit" (dollar, euro, pound, whatever - hereafter, "AICU") above that bar. From there on, every subsequent extra AICU would be taxed at a slightly higher level on a continuous, smooth, exponentially rising rate until the millionth AICU, for example, might be taxed at 99.99%. This would still allow the entrepreneurial drive to operate: those whose impetus is earning money will be stimulated by the challenge of differentiating themselves in that rarefied upper range, just as athletes compete to drive up a record by fractions of a second. I'm willing to bet that many entrepreneurs would be as attracted to a competition for maximum contribution to social good as to compensation for meaningless levels of personal reward (if you doubt this, look at the phenomenon of social entrepreneurs such as John Bird).

The extra tax income would by law be ploughed back into benefits from which everyone benefits equally, and which ensure that there can be no such thing as poverty.

But that's in a fantasy world. Apart from anything else, it would require a complete absence of fiscal jurisdiction boundaries. And from the moment it came into existence, human nature would undermine my idealistic vision of it. I find it a very agreeable and appealing fantasy, though.

1 comment:

Dr. C said...

Pithy, as always. Actually, I think you would have a better chance of your scheme in England than in the States, "level playing field" there and all. (how that idea could coexist with the idea of "Empire" would be another discussion.) However, over here in the colonies (former) I think we have been obsessed with the idea of instant riches. It was probably there before the California Gold Rush in 1849, but it has certainly been a center piece of our society since. This is epitomized in the illiterate college basketball player who goes on to make countless millions in the pros. We tend to disseminate the worst of our traits (McDonalds, drone aircraft, Brittany Spears). Incidentally, it is a major factor in our current health care "crisis" because there are some physicians who make large salaries and some who make miniscule, depending on your specialty. Once having made so much more than others humans tend to have the idea that they deserve it (just like all those bank presidents on Wall Street.)