Does pay matter? This question – which is very much in the news at the moment – is not as easy to answer as you might think.
At one level, of course it matters. At another level, we often make choices that do not necessarily result in us maximising our level of pay.
I offer myself as an example. Over the past two years, I’ve taken a certain amount of time away from my core money-earning activities of journalism and writing training to do some translation and fiction-writing work. This work did pay. A bit. In the end. But not very much. Certainly, nowhere near as much as journalism and writing training. Which already probably don’t pay nearly as much as what you do. But I don’t want to do what you do (you may think I couldn’t do it and you may be right) and so I continue to labour at the typeface.
Women frequently make these kinds of economically irrational choices, argues Swedish journalist Katrine Marçal in her book Who Cooked Adam Smith’s Dinner?, which has recently been translated into English – though usually they make them not because of a love of words, but a love of family. Thus, they end up cooking, cleaning and caring for free, just as Adam Smith’s mother apparently cooked for him throughout his entire life.
This, according to Marçal, makes a mockery of Adam Smith’s ‘economic man’, because ‘economic man’ could not be a woman. Poppycock, says Tim Worstall, writing for the Adam Smith Insitute, “For we can only make sense of gender roles and how they have changed within that very concept of economic rationality.”
There’s another problem. It’s not just women who make these choices, though they perhaps make them more often. Men do too. My friend Evin, for example, gave up a high-paying job at a leading financial services company a couple of years ago to run the Irish Gaelic centre in Glasgow. Now there’s a love of words for you.
Whatever the truth of Marçal’s demolition of economic man, it’s interesting to speculate about what Mrs Smith (I’m assuming here that Adam Smith’s mother was married to his father and used his surname) would have made of the latest innovation from my old friends at Emolument, the are-you-paid-enough consultants.
Emolument’s website now boasts a “reliable, real-time, accurate” salary comparison tool. “Knowing where you stand empowers you to take control of your career,” it says. “Forty-six thousand, one hundred and ninety-one professionals like you have already shared their data.”
Now, in my day, that kind of service was called a trade union. And isn’t it a little distressing to think that there are 46,191 professionals out there who are just like you? Or me? Or Mrs Smith? Given the illustriousness of her progeny, I speculate that Mrs Smith was much more special than that.
In any case, Emolument is a bit off the money with this. For the trend for the salaries of the most highly paid to rise sharply while those of the lowest-paid stagnate is in reverse. According to new research from PwC into executive pay at FTSE 100 companies, executive pay is falling in real terms and is getting harder to earn – due in no small measure to regulation and improved disclosure.
“Companies are improving disclosure of bonus payments and targets in response to investor demands,” says Tom Gosling, head of PwC’s reward practice. “Over the last few years, investor pressure and regulation have led to a significant raising of the bar in executive pay. On the whole, the right balance has been struck.”
There we are, then. If you’re a senior executive and you’re asking yourself if you’re paid enough, the answer is: yeah, probably. No need to darken the portals of Emolument.com. Count yourself lucky you get paid at all, my friends. Mrs Smith didn’t.
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