Posted on Jun 26, 2015
The way in which this diversity of occupations work together is an indication of how efficiently a society works.
But increasingly of late we have had concerns raised on two fronts. One is not new, in fact it is less prominent now than 40 years ago.The other has changed the face of society in a few short decades.
Firstly, the positive. Although there are some occupations who think their clients should anoint their feet with sacred oil, this phenomena is not as pronounced as it was 40 or 50 years ago. We have never (well not in my lifetime anyway) felt it necessary to worship our plumber or blocklayer as a demi-god. We ask for their opinions and suggestions, and then pay them well for a quality job. Yet in the generation of my father, very often lawyers, accountants and bank managers were raised to a status above that of mere mortal. We view those occupations as similar to all others. They work with us in performing tasks for us to assist our business to succeed, and in return we pay them well. Which makes it somewhat of a mystery when we find that businesses (and I am not talking just small or medium businesses here, it often applies also to multi-nationals ) turn over vital decisions to their lawyers. This phenomenon has perhaps come to our notice more in recent times because we are doing more deals. But certainly we have seen more than our share of businesses turning over vital decisions to lawyers, who know nothing about the business.
We have to admit that we are mystified with this trend which appears to turn back the clock a generation or two. But have no fear, Expedio is not about to turn over our decision making, pricing policies, or any other vital business decision making to our tiler, or our lawyer or even our gasfitter. We will seek their advice, but we will not be directed by them.
And we fear for those business who allow themselves to be run by their service providers.
The other occupation based concern we have relates to relativities of salaries. We are talking about salaried employees here – people who get a paycheck and can decide to go and work somewhere else if they choose – not business owners who put their house and other sensitive anatomical parts at risk.
We recall attending a conference in the United States perhaps 20 years ago where the relativities between salaries was discussed. Could the chief executive of an organisation be worth 10 times what the shop floor worker in his business earned?
At the time we were astounded. We felt that in a New Zealand context there would be few salaried executives being paid twenty times what their shop floor workers earned.
And if there were, what were their special talents which justified this ratio? We remember feeling at the time that ratios of this magnitude would ultimately lead to social unrest. Could some people work 20 times as hard, be 20 times as productive and make decisions that were 20 times better?
We caution here that we are talking employees – not business owners who invest capital and take risk. We are talking people who can walk out the door with little or no negative impact.
But now, more and more we are seeing employees being paid massive sums that seem to defy reason. The legions of Auckland Council employees paid megabucks for their glide time no-responsibility antics are well documented. But start comparing the small business owner (and there are many of them) who puts it all on the line and ends up taking home less than $100k, to the government or listed company employee who can walk away at any time, and takes home $200k, $300k or more, and we have a serious imbalance.
There is no doubt that there are large numbers of people in this country struggling to keep their financial heads above water. There are numbers of them who are attached to the culture of entitlement – that they are entitled to hand outs. But that is another story.
What does deserve serious debate is the way in which many are paid – and the subsequent way in which that upsets the social balance and fabric of our society, and must also impact on our housing market.
We don’t see a problem with rewarding well for risk and effort and hard work. But we do believe a problem is in the making when we reward for warming a chair, just because that chair is deemed to be worth a certain amount, irrespective of performance.
