New Zealand rugby players come in all ages, shapes and sizes, and both sexes. Players vary greatly as regards their skill levels, commitment and training schedules. Rewards for players are extraordinarily unequal, as most actually pay to play while a very few are paid hundreds of thousands of dollars.
Is this fair or unfair? Should the Labour Party, the Greens or the Occupy Auckland movement campaign for more-equal payment of rugby players? Should the “greedy” All Blacks be forced to hand over some of their colossal income to the more impoverished fellow players? Should the Government intervene to reduce this glaring disparity in rewards?
New Zealand is an unequal society, just like every human society, just like every family. An equal society is impossible, an unworkable nightmare involving zero incentives and gross unfairness. Why should a cleaner be paid the same as a surgeon? It’s a ridiculous idea.
So, I don’t think anyone, anywhere argues that surgeons should be paid as much as cleaners. The labour market for surgeons and cleaners seems to be working pretty well. If anything we’re not paying our surgeons enough, and they’re all moving overseas.
The argument about equality is mostly centred around company executives and the finance industry. And again, I don’t think many people dispute that if you’re the executive of a large, successful company that you shouldn’t be handsomely paid, in proportion to your value to the company.
The issue is that executive and finance sector pay continues to increase at rates that are completely disproportionate. CEOs get massive pay increases and huge bonuses irrespective of profits, performance – anything related to value or wealth creation. They don’t get huge pay increases because they’re adding value to their companies, they get them because something in the current corporate model is broken, and unable to prevent executives transferring wealth out of their companies and into their own bank accounts. I have yet to see anyone justify or explain the explosion in executive remuneration – I doubt anyone can, which is why we get people like Robinson making their absurd ‘cleaners vs surgeons’ arguments.
And where does that money come from? Profits are stagnant or down, so executives lay off their workers in order to fund their salary increases. That’s why the incomes of the majority of New Zealanders have remained stagnant in real terms over the last few decades – the benefits of our anaemic economic growth all aggregate to this tiny handful of people. We’re not ‘growing the pie’, we’re gradually transferring more and more slices to the people that already have the most.
The analogy isn’t exact, but it’s close enough to the situation trade unions found themselves in in the early 1970’s. They were able to use their monopoly on labour to extract income from employers that was disproportionate to their value. It sparked a public and political backlash and crippled the power of the unions, and – with luck – something similar will happen to our executive and financial class.