social value

Do residential care workers deserve the big pay increase they are getting?

The recent historic pay equity deal for aged and residential care workers raises a tricky clash between quite different accounts of how the economy should work. Many people think that workers should be paid at a rate that reflects their social worth; others – mostly economists – think they are paid at their marginal product,  which I explain below.

The social worth of a person in no way reflects their income or wealth. To confuse the two notions is to play into the values of the rich. 

My brother, Keith, died in the hospital wing of a Christchurch retirement home recently.