Pay As a Contribution to Society

Is it me or have you noticed that most people’s pay scales seem a bit out of line of what they do? For example, we pay our our top actors/actress and professional sports players huge sums of money to do their jobs. Yet if you ask people what matters most to them we never mention movies or sports events at the top our our lists.

On the other hand we often state our children are the most important people in our lives. Yet when we ask others than ourselves to look after them we pay them a ridiculously small amount of money given the importance of what they do.

Why is that? I think it’s a factor of businesses don’t consider childcare important. In most cases your boss has little if any interest in our childcare arrangements until it impacts our job performance. Then suddenly it matters only until your back up to your old standards of performance.

So what would happen if we change the pay scales by what we collectively value most. Well for an example, let’s pay childcare workers $20/hour per kid (a raise of approximately 600%). Let’s assume a 45 hour work week. So each child would cost $45,000 of after tax dollars for 50 weeks of care per year. Which would mean just about everyone with more than one kid would have one stay at home parent, the cost savings regardless of income could not be ignored.

This would be great for parents who want to stay home with your kids, but a disaster for businesses. Suddenly about at least 1/3 of the workforce wouldn’t be available for full time work. At best they would be willing to telecommute or contract work for part time and when it suited the parents schedule and not the businesses. It was also been a boom for those really good daycare providers. People who would be willing to pay that amount for childcare would suddenly expect at a minimum a university degree and the best facilities possible.

Effectively a change like this would change our economy from being profit focused to people focused, which has all sorts of interesting possible outcomes. Not to say this is going to happen or anything, but rather I’m just had this idea running around my head.  So what else do you think would change if our economy became people focused?

10 thoughts on “Pay As a Contribution to Society”

  1. I think your comparison is a bit off though. Actors/athletes get paid based on what they do for their profession. Just putting Tom Hanks in a movie virtually guarantees his salary will be paid in the first weekend alone, where Joe Nobody could mean the movie never breaks even. People would come to see Michael Jordan, making the owners millions upon millions more than MJ made – same for his endorsements.

    A better comparison would be to the overpaid CEO of a financially troubled company. Once, their pay was tied to performance, but now it’s tied to reputation. If it’s believed that an executive will help the bottom line, they get paid handsomely, regardless of the actual performance. It makes no sense to see executives make millions of dollar when their companies are losing billions.

    We live in a world where ROI is king, and sadly, the ROI on childcare isn’t easily measured in dollars, so we look for people who we believe will be a positive influence, and are capable of feeding and entertaining our kids. There’s a reason teachers are so poorly paid – they’re seen more as babysitters than educators, and the short-term gain is negligible. Sadly, this hurts everyone long-term, but long-term planning is painfully ignored by many.

  2. Interesting idea. I think however that you just can’t get away from the old supply and demand law. It’s not that we overpay professions that we don’t value or the opposite but rather that some professions are easily filled (ie child care) so the wages are lower. Pro athletes are relatively rare so they make the big bucks. It’s easy to pick examples that support the argument but there are plenty of well paid professions that people probably value – doctors would be an example.

    Another way to look at value is to get away from individual salaries and look at professions as a whole – ie in Canada or the US – what is the total income earned by child care workers vs the total income earned by pro athletes and actors?


  3. Volume.

    A big named actor can be paid what they are paid because of the revenue they generate. When I go to the movie theatre, I may put $1 (or more) of my ticket price in to their pocket. Same with a sports game, I put a significant part of my ticket price in to the pockets of the players. My portion alone is meaningless, but times 20,000 fans and it’s a big paycheque.

    If a daycare worker could take care of 50,000 children at $1 each per day, they’d be extremely wealthy individuals (earning, at 20 days/month, $1 million in monthly revenue). Unfortunately, it’s more like 5 or 6 kids.

  4. Austin,

    Now that IS a good idea. A CEO of a poorly run company is a better idea to compare to.


    I’m aware this will never happen, it was just one of those fun ideas running around my head I felt like sharing.


    Excellent point on why it really happens.


  5. The immediate problem you run into is “who decides what is important”? In a sense this has already ben decided. The more important something is to you, the more you are willing to pay for it. In the aggregate the more important something is to society, the more people are willing to pay for it. This effectively determines supply.

  6. I have to agree with FourPillars. Supply and demand would haul wages back into line. If childcare cost 45K per year I’m sure some parents would be willing to pay a little less for someone a little less qualified.

    How much does an average family spend on daycare versus movies or pro sports? If you look at it this way, then it’s obvious that people DO value children more than movie stars and pro jocks. The money spent on childcare is just spread around more, and the caregivers are just regular people, not celebrities.

  7. Wouldn’t this just cause more women to not work and stay home to raise kids? In other words, aren’t you advocating for the 1950s?

  8. Tina,

    What ever gave you the idea the women would have to stay home?

    At $45,000/per/year I could stay home with our two kids and save more than I make.


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