Academics Zeynep Ton and Julian Jessop discuss the disparity in pay for essential workers, including nurses, questioning the justification behind underpaying professions with significant real-world impact. They explore the balance between fair wages and non-monetary rewards in vital professions while discussing the implications of pay increases and strategies for creating value through job enhancements. The transformative effects of paying low-wage employees more are also highlighted, emphasizing the benefits of increased pay for both workers and society.
Low wages impact workers' health and job performance, while paying them more can improve outcomes and society.
Investing in better wages, training, and job design can elevate low-wage jobs and benefit companies.
Deep dives
Impact of Low Wages on Workers and Companies
Low wages have significant negative effects on workers, leading to multiple job holdings, constant financial worries affecting focus, and health issues like heart disease and lower IQ. For companies, low wages result in poor job performance, high turnover, and operational inefficiencies, ultimately impacting customer service. The costs associated with turnover include hiring, training, and decreased trust in decision-making, leading to centralized operations that limit employee empowerment and satisfaction.
Transformative Potential of Higher Pay for Low-Wage Workers
Paying low-wage workers more could transform millions of lives by providing agency, career advancement opportunities, and creating a stronger middle class with hope. When combined with improved work design that values employees, higher pay can enhance service interactions, customer experiences, and societal cohesion. This approach not only benefits companies by improving outcomes but also fosters a positive society built on respect and productivity.
Challenges and Recommendations for Addressing Low Wages
Addressing low wages requires a multi-faceted approach, including better training, equipment, and professional recognition to elevate the status and pay of low-wage jobs. Suggestions to enhance productivity, raise job quality, and incentivize workforce retention involve investments in infrastructure, training, and systems redesign. However, caution is advised against blunt measures like national living wage strategies, emphasizing the need for nuanced interventions that consider broader economic impacts and productivity enhancements.
During the Covid-19 lockdowns we all gained a renewed appreciation for frontline workers – healthcare professionals in particular, but also delivery drivers and supermarket staff. So why do we pay some of those doing jobs with arguably the most real-world impact the least? Should we pay them more, or would this lead to unintended economic consequences? Academics Zeynep Ton and Julian Jessop discuss.