An interesting thing came up in my news feed today.
And I say ‘news’ in the modern sense of the word:
News (n.) – anything we think is interesting enough to make you want to click on our website, including but not limited to cats and ageing celebrities.
And the item on my ‘news’ feed was about something some guy put on his facebook page, and a bunch of people liked it.
(What do they teach people at journalism school these days?)
Anyway, it caught my eye because it was an American paramedic responding the recent wage case in New York that awarded fast-food workers a minimum wage of $15/hr.
And I’m thinking, that sounds about right. That’s what I’d expect an unskilled uni student at McDonalds to earn.
But then I find out that that’s exactly what an ambulance driver in New York earns.
And so this guy has a rant about what it means for paramedics and burger flippers to be earning the same amount.
“Fast food workers in NY just won a $15/hr wage.
I'm a paramedic. My job requires a broad set of skills: interpersonal, medical, and technical skills, as well as the crucial skill of performing under pressure. I often make decisions on my own, in seconds, under chaotic circumstances, that impact people's health and lives. I make $15/hr.
And these burger flippers think they deserve as much as me?
Good for them.
Look, if any job is going to take up someone's life, it deserves a living wage. If a job exists and you have to hire someone to do it, they deserve a living wage. End of story. There's a lot of talk going around my workplace along the lines of, “These guys with no education and no skills think they deserve as much as us? Screw those guys.” And elsewhere on FB: “I'm a licensed electrician, I make $13/hr, screw these burger flippers.”
And that's exactly what the bosses want! They want us fighting over who has the bigger pile of crumbs so we don't realize they made off with almost the whole damn cake. Why are you angry about fast food workers making two bucks more an hour when your CEO makes four hundred TIMES what you do? It's in the bosses' interests to keep your anger directed downward, at the poor people who are just trying to get by, like you, rather than at the rich assholes who consume almost everything we produce and give next to nothing for it.
My company, as they're so fond of telling us in boosterist emails, cleared $1.3 billion dollars last year. They expect guys supporting families on 26-27k/year to applaud that. And that's to say nothing of the techs and janitors and cashiers and bed pushers who make even less than us, but they are as absolutely crucial to making a hospital work as the damn CEO or the neurosurgeons. Can they pay us more? Absolutely. But why would they? No one's making them.
The workers in NY *made* them. They fought for and won a living wage. So how incredibly petty and counterproductive is it to fuss that their pile of crumbs is bigger than ours? Put that energy elsewhere. Organize. Fight. Win.
Off to Bolivia to join the revolutionaries!
Look, I get where this guy’s coming from. And it’s great that he can lift his eyes from his own narrow sphere of self-interest and take a look at the bigger picture.
And I think there is a real problem, in America and also here. And that’s a sense that executive salaries have disconnected from reality. I don’t think people mind people at the helm getting paid more, but when you hear about people earning $8,000/hour, it does start to sound like they’re taking the piss.
And when someone on $22m a year tells their workers they can’t afford a minimum wage, it sticks in the throat. Our ‘Fair Go’ button starts flashing red.
But there needs to be some difference in wages or they lose their motivating power (until humans become less selfish, and I don’t see that happening anytime soon.)
Take what happened to Dan Price – CEO of Gravity Payments.
Three months ago he became the poster-boy of the do-gooder movement when he announced a minimum wage for his company of $70K, slashing his own $1m pay check to pay for it.
He was celebrated as a new model of egalitarian CEO.
But it didn’t work out so well. The New York times reports that Dan’s so hard on his luck now that he’s renting out one of his rooms to help make ends meet. And two of his best employees left.
They say that newer employees, with less skill and making less of a contribution to the company, we’re earning as much as experienced and valuable employees. And they complained that the system “shackled high-performers to less motivated team members.”
They lost their motivation.
What’s the point of working hard if everyone gets the same amount anyway?
(The soviet states learnt this lesson the hard way.)
And so any wage system deal with the motivating drive of wage differentials, not squash it.
And rather than focus our energy at the bottom, why not look at the top? Why not have pay caps for CEOs? If you want to get heavy handed with the market…
Anyway, this is all by the by. But the thing that jumped out at me is that ambo’s in America earn $13-15/hr.
That’s cheap right? The average wage in Australia is $28.75/hr.
And so what’s the take-home? Australia is just an expensive country. Not just wages. Everything.
I don’t think we’d noticed how far ahead we’ve run of the rest of the world.
And this is why I’m looking abroad right now. If you take some of the wealth generated from your properties here, it can go a long, long way in a country like America – where property prices are just a fraction of what they are here.
What’s more the yields are awesome. It’s a fantastic cashflow play.
America is still a crazy place – where ambo’s earn as much as burger-flippers – but it’s still a first world country with a strong rule of law.
It’s still got a lot going for it.
Should ambo’s be paid more, or burger flippers less? What about CEOs?
Steven Hambly says
I have never understood how two blokes walk into an office at 7am and both leave at 5pm. The first guy gets into his Commodore and drives to Blacktown to his 1950’s house. The second guy gets into his Maserati and drives 5 minutes to a Neutral Bay mansion. Both are 40 year old men that went to the same university and are similarly talented. The difference; first guy gets $1500.00 per week and the second guy gets $76,923.00.
Yes I have heard the argument many times, “but the guy at the top, takes on all the risk”? But does he really? And even if his role is more prone to resignation, redundancy, takeovers etc then if he is at all clever he has squirreled away 2 million in savings in under a year.
On the other hand the bloke on $1500 a week gets a payout of $20,000 after 5 hard years of work and is sent packing. He then has a few months to get another job or his family begin to starve.
I believe in capitalism but I will never agree that a CEO deserves an income equivalent to 52 (often more) of his full-time employees.
Macca says
Well said Sir. I get a real sense that all over people are seriously starting to move away from the Gordon Gekko view of the world that has prevailed for the last 35 years and ultimately led us to the collapse of Lehman Brothers and the GFC. As Jon said, people are selfish, and left unfettered that will bring capitalism – the greatest wealth generation system known to mankind – collapsing in on itself, as we saw in 07/08. If we start with paying people a decent wage for their labours, a lot of the rest takes care of itself – they spend more, pay more tax. Of course that decent wage may have to come at the expense of the boss’s third super car, but I’d say that’s a good thing.
Pete says
“Right on the money” , so to speak. No-one is worth more than 10 times “workers” wages.
Capitalism will die if those at the top don’t realise this fundamental imbalance. It is rampant on a global scale and will surely end badly, if we don’t address that imbalance. The pendulum will swing the other way.
Andrew says
What rubbish…
A person who can generate wealth for shareholders is worth what he brings to the table.
ron says
hi jon,
i really well written article. its a quagmire of self interest in usa and australia. ceos and workers..kings and the ‘people’, lords and serfs etc. someone has to be at the top..leaders. so that the systems can work. ..but..there is greed and corruption..and failure. idealism is out the window etc. so i work for myself and have for a long time now. i have failed many times…but i still have surfaced and gone on again ..and thats a life. the daily grind. it is our life…..and we look back and think…boy i wish i was there again. i might have done something different. the good old days…when we were younger. i much prefer today..thank you..so many things to enjoy. cheers, ron
NOYB says
Most people like to rubbish the Union movement, thinking that they cost jobs and don’t do much for the productivity of the country. But as Macca says to S Hambly “If we start with paying people a decent wage for their labours, a lot of the rest takes care of itself – they spend more, pay more tax”. If Australia was like America, where the Big End of Town controls most of the wealth of the country and Australia was stuck getting people who earn the least to pay most of the tax burden, then Australia would be the next Argentina of the ’80s in the 21st Century. Luckily for us Macca’s comment is exactly how the Union movement thinks.
It knows that for a country and its government to be and run a successful economy, there needs to be a broad distribution of the wealth across society, and there needs to be incentive to maintain the momentum of the economy. Different wages for different skill sets. I’m not a member of either the Labor or Liberal parties, but I do enjoy playing both of them at their own game.
Because Unions are also commercial entities, they have employees too, and when it comes to negotiating my workplace EBA for my fellow colleagues, I don’t pull my punches, I make sure that my people get the best, most up to date conditions and wages possible. I am in a most intriguing position of working for one union, and being the clerical delegate for another union in my workplace. It is a unique perspective that allows me to see all sides of the workforce / wages / enterprise equation.
And for the most part, I think the Unions have the right idea (at least on this score anyway).
And there is at least one former CEO of a bank (yes the Commonwealth Bank) who believes that no CEO is worth more than 10 times the salary of the lowest paid worker in the business that they work for. A salary cap for CEO’s is long overdue, and if the year is good then they have earned and deserve a bonus, but when the year is not so good, he should take stock and workout what went wrong, but still give bonuses to the staff as a means of encouragement to come back next year, and implement improvements for the business. Afterall the business goes nowhere without the effort of the workers.
Richard B says
A mechanic just finished rebuilding the CardioThoracic surgeon’s Merc – new valves, pistons, the works. Says to the surgeon, “Hey Doc, we do pretty much the same thing- I rebuild busted engines, you rebuild busted hearts. How come I earn 70 grand a year, and you get 1.5Million??
The surgeon thought for a minute, and then replied, “Try doing it with the motor running!!”
Inequities exist. That’s life. If you don’t like it, change trades and become a plumber – they make REAL money ?
Greta Grip says
Never Knock good money being earned for a good days work. However I do struggle to see the daily salary of some CEO’s and the lifetime handouts some of our Government workers get. The other thing is… the average person paying the most tax, gets to see the news as they commute home, of yet another scandal of how our Pollies finding new and interesting ways to waste the tax cash they give each week to the government. Watching them squander and use it for their own ends must be painful to see. In Queensland about 9 years ago I walked into a Subway. The young lady making my sandwich was telling me it was her first week in the job. I told her she was doing great.. and asked what she did before she was at subway… The answer ..A Nurse. I asked why she swapped to make sandwiches… Answer..she gets paid the same and the hours are better. I remember then… walking out and wondering what our country was coming to… Police Ambulance and Nurses… deserve to be treated better.
Ken. says
Hi Jon, It’s all very well to say that the average wage in Australia is $28.75. I think this reeks of bullshit. It would be more honest to talk about the average person’s wage, which would be a hell of a lot less. Regardless of what the fat man said, getting ahead on trying to earn a good wage by getting a good job, would be like all of us trying to get the treasure’s job. Not impossible, but only one man in 25,000,000 will get it next election.
Cary says
As Jim Rohn would say, You don’t get paid by the hour, you get paid for the VALUE that you give the company or what you “bring to the table”, as it were. If you want more money, give more value.