Work, Productivity & Pay
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Work, Productivity and Pay

Wanjiru Njoya, PhD (Cantab.) MA (Oxon.) LLM (Hull) LLB (Nairobi) PCAP (Exeter)
​Fellow of the UK Higher Education Academy

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Prosperity and abundance

2/5/2017

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Picture

Nobody wants to save hard and finally be able to afford a modest house in a nice corner of their village, only to find that the desirable people they hoped to be neighbours with have moved on, and now the new desirable area is beyond their modest budget. The premise is, that in order to enjoy your home you must be surrounded by affluent homes, otherwise how can you live a happy and contended life proud of your little corner of the world? 

​A similar premise applies to jobs and wages. Your modest job becomes meaningless when you discover that the CEO earns 350 times your wage. Thus it will not surprise you to learn that employees do not feel better off at work just because of overall rising economic prosperity: as prosperity and abundance rise, so does income inequality. This makes rising prosperity seem to be completely meaningless for those whose measure of happiness is defined by what other people around them are earning.

​The people of Britain were more than 70 per cent richer in 2004 than they were in 1980, as conventionally measured by gross domestic product per head. But did Britain’s employees feel any better off at work after this substantial period of economic growth?

Green and Whitfield, ‘Employees’ experience of work’ (The evolution of the modern workplace: Cambridge, 2009).
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Did they feel any better off at work? The answer is obvious. While it is true that they are getting richer, unfortunately the rich are getting richer too! This totally ruins any joy that workers might have derived from their rising wages. According to the Guardian: ​

it’s not just about how much you have, nor even how much you have relative to everyone else, but also how much the top 1% has. With that level of income accumulation, even if you are a member of the relatively well-to-do middle class some things start getting priced beyond your reach, such as housing.
​

In that situation you can afford modest housing with average local schools nearby, but you can't afford housing in the most desirable area where all the above-average schools are. At that point, let's face it - you might as well be homeless.
​

At first, rising wages seems like good news:

Beginning with the material side of work, there is no doubt that workers in Britain in all categories are substantially better off for wages than they were a quarter of a century ago. Between 1985 and 2002, real wages rose by 37 per cent in private businesses. The advance has been sustained and even increased in the last decade, with real private (public) sector wages rising by an average of 2.75 per cent (2.25 per cent) per year over 1995 to 2005.

Thus, taken on average, workers in Britain were at least gaining a portion of the increased affluence generated by rising productivity.

Green and Whitfield, ‘Employees’ experience of work’ 
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But what’s the point of wages rising, and workers gaining increased affluence from rising productivity, if rich people are also getting richer? It’s all for naught, because the rich folk will just keep shifting the goal posts thereby defeating the reasonable expectations of those who were trying to catch up. This makes people understandably very angry, almost angry enough to go on a protest march against rich people (depending on how nice the weather is outdoors). The only way we shall ever be happy, is if we know that there’s literally nobody out there who is richer than we are. A little bit richer, fine, but not 350 times richer because that’s just intolerable. Nobody can rest easy in those conditions.

If you listen to what the poor rich people 
in the City of London are saying you can't help feeling their pain. They earn only hundreds of thousands of pounds, in appalling conditions where they work with people whose net worth is in the millions of pounds. This inequality of wealth is intolerable. £100,000 a year is meaningless if someone else earns £10,000,000. With such inequality rampant, it's hardly worth getting out of bed in the morning and you might as well be unemployed:

"It’s difficult to kind of contextualize...I mean what defines the top 1 percent, it’s like £100,000 income which does not feel that great.

I think there is a much greater distinction between those with asset wealth; income wealth is very different to asset wealth. My kids are at school, in a very nice school in [a prestigious area in London]. I feel like I’m fairly well off, and I earn multiples of the hundred thousand. But, I feel very poor in the context of the classmates that [my kids] have.

​Their parents can spend a lot more time with them, because none of them really work, or some of them work but it’s working on their own terms, they might run a hedge fund, but they can take the kids to school. I’d say nine or ten of [their] classmates’ parents have over £100 million, and that I think is just... differentiating. That to me feels wealthy, but earning a hundred thousand just doesn’t feel particularly wealthy. And I think that’s where we see the kind of big change...there are a lot more people within London who have a £100 million [assets]."
​
Katharina Hecht, A Relational Analysis of Top Incomes and Wealth, LSE Working Paper No 11, May 2017.


Aw, diddums. I almost feel sorry for them. The reality is that everyone in society is able to point to someone else who is richer than them, and this inequality is tearing us apart. We just can't cope with such harsh realities.

It gets worse with immigration from poor countries when recent arrivals look around and all they can say is 'OMG everyone here is richer than me! That's intolerable!'

Not long ago immigrants said something more like 'hand me a broom, I'll sweep your floor for pittance wages' or 'please sir, is there a bus somewhere, that needs someone to drive it?' Forget that! That's for the birds! Now we live in enlightened times, when everyone is too dignified to work for a wage less than the CEO's, and in fact nobody has to earn their own living unless they really want to, so if they bother to show up at work they should get equal earnings with everyone else.

This becomes really clear if you look at the top end of the scale where all the worst travesties are occurring. Prepare to be wound up by these appalling facts:

​In recent years, high-level managers and performers in the United Kingdom appeared to reap especially large rises in earnings: the differential between the 95th and 90th percentile of the pay distribution was rising by 0.5 percentage points a year during 2000 to 2004.


Green and Whitfield, ‘Employees’ experience of work’ 
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‘Especially large rises’ for the bosses. This is why the public focus is now on monitoring the pay of anyone who earns more than we do.

Every night, you have to toss and turn in your modest bed in your modest digs, wondering how the world could ever have become so unfair that there are people out there with bigger houses than yours. It's intolerable. 

​But what about the poor, you ask?

Well, what about them? The poor are not the problem. The real problem is the rich people at the top. If there weren’t any rich people at the top, there would be no poor people. That’s modern enlightened logic. The more rich people there are, the more poor people there must be. Something to do with cronyism, old boy networks, and rich people stealing the economic pie.

According to this logic, it follows that if we get rid of the rich people there’ll be no more global poverty! Without rich people in Britain, there'll be no poor countries in Africa! So there'll be no poor people getting into overcrowded leaky boats trying to make their way across the sea to the land of riches and free stuff, drowning in the process and upsetting everyone. Get rid of the rich people and you'll fix the inequality problem, the unhappiness problem, and the illegal immigration problem! Three for the price of one!

That’s why those who are concerned about income inequality must focus all their attention and efforts on high wage earners. Forget the poor! In the quest for prosperity and abundance it’s the rich we need to target. Luckily, it's easy to target them because development artists like Oxfam constantly publish exposés of all the rich fat cats, how much they earn, and the offshore locations where they stash the wealth. Oxfam reports that:
​

The richest 1% now have more wealth than the rest of the world combined. Power and privilege is being used to skew the economic system to increase the gap between the richest and the rest. A global network of tax havens further enables the richest individuals to hide $7.6 trillion.
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$ 7.6 trillion! Suddenly that modest pay rise you got at work the other day is starting to look a bit pathetic, isn't it, especially since you'll have to pay tax on it. No tax havens for you, my friend, as the employer docks the correct tax (plus a bit extra, just in case) from your wages before handing you your cheque. Nobody can find any sense of pride or satisfaction in these conditions.

Are you angry yet? It's ok to be angry - it's not for yourself and how cross you are at being priced out of the best school district, of course not. No, it's for the world's poor, the starving children, and of course for fairness and justice and equality. This makes yours a special and entirely justified case of righteous anger. It's almost worth staging a riot, in fact, especially if it's August and the sun is shining and there's nothing worth watching on the telly.
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    Wanjiru Njoya

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