Cleaners worth more to society than bankers, says thinktank | Business | The Guardian
Hospital cleaners are worth more to society than City bankers, according to a report that shows many low-paid workers increase the wellbeing of the nation more than the high-flying and much better-paid financial-sector staff.
The New Economics Foundation said today that a study of the social impacts of several jobs revealed that City workers, advertising executives and tax advisers destroyed value, while hospital cleaners, childcare workers and staff in the waste-recycling industry gave much more to the country than they took out.
The thinktank said it had found a way to calculate how much someone should be paid in relation to the value they create through a series of measures including conventional economic returns, environmental impacts, and knock-on effects for jobs and wellbeing in society.
It said the report challenged the notion that high pay did not matter as long as poverty was eradicated. It argues that high pay is often generated by businesses that destroy other parts of the economy or fail to pay the full costs of their activities.
The report said tax accountants were the most destructive, laying waste to £47 of value for every £1 they created. Elite City bankers (earning £1m plus bonuses) destroy £7 of value for every £1 they create and advertising executives wreck £11 of value for every £1 they are paid.
On the other hand, the report judged that waste-recycling workers generated £12 for every £1 spent on their wages. Childcare workers create between £7 and £9.50 of value for every £1 of pay and hospital cleaners create more than £10 in value for every £1 they receive in pay.
The assessment by the Nef follows severe criticism from some institutional investors of the "value destruction" by many banks. The losses posted by some banks, including Royal Bank of Scotland and Halifax have wiped out more than 20 years of profits.
However, the study goes further than asking whether high wages are justified by a real economic benefit.
Investment bankers create value from the economic activity they facilitate: an increase in jobs in wholesale banking and tax contributions. But these are offset by the cost of the current crisis and the negative impact on the public finances.
In the case of advertising executives, the NEF calculates the cost to society of over-consumption. While the industry creates jobs, it also has severe and costly negative effects. The authors quote the economist JK Galbraith who argued that advertising created socially and environmentally wasteful "wants" where needs have already been met.
The New Economics Foundation said today that a study of the social impacts of several jobs revealed that City workers, advertising executives and tax advisers destroyed value, while hospital cleaners, childcare workers and staff in the waste-recycling industry gave much more to the country than they took out.
The thinktank said it had found a way to calculate how much someone should be paid in relation to the value they create through a series of measures including conventional economic returns, environmental impacts, and knock-on effects for jobs and wellbeing in society.
It said the report challenged the notion that high pay did not matter as long as poverty was eradicated. It argues that high pay is often generated by businesses that destroy other parts of the economy or fail to pay the full costs of their activities.
The report said tax accountants were the most destructive, laying waste to £47 of value for every £1 they created. Elite City bankers (earning £1m plus bonuses) destroy £7 of value for every £1 they create and advertising executives wreck £11 of value for every £1 they are paid.
On the other hand, the report judged that waste-recycling workers generated £12 for every £1 spent on their wages. Childcare workers create between £7 and £9.50 of value for every £1 of pay and hospital cleaners create more than £10 in value for every £1 they receive in pay.
The assessment by the Nef follows severe criticism from some institutional investors of the "value destruction" by many banks. The losses posted by some banks, including Royal Bank of Scotland and Halifax have wiped out more than 20 years of profits.
However, the study goes further than asking whether high wages are justified by a real economic benefit.
Investment bankers create value from the economic activity they facilitate: an increase in jobs in wholesale banking and tax contributions. But these are offset by the cost of the current crisis and the negative impact on the public finances.
In the case of advertising executives, the NEF calculates the cost to society of over-consumption. While the industry creates jobs, it also has severe and costly negative effects. The authors quote the economist JK Galbraith who argued that advertising created socially and environmentally wasteful "wants" where needs have already been met.
"We have calculated the costs to society of obesity, anxiety-related mental health problems and indebtedness.
"Then there are the substantial environmental costs from climate change and resource depletion. It is estimated that in rich countries such as the UK, the level of consumption is three times as much as the planet's environmental resources can sustain."
The study admits there are hospital cleaners and childcare workers that fail to provide a good service and can have a negative impact. However, the authors argue if they assume people are carrying out their duties and, in the case of childcare, allow parents to go out to work, then the benefits far outweigh any disadvantages.
Let's go!
"Then there are the substantial environmental costs from climate change and resource depletion. It is estimated that in rich countries such as the UK, the level of consumption is three times as much as the planet's environmental resources can sustain."
The study admits there are hospital cleaners and childcare workers that fail to provide a good service and can have a negative impact. However, the authors argue if they assume people are carrying out their duties and, in the case of childcare, allow parents to go out to work, then the benefits far outweigh any disadvantages.
Let's go!
