Modern Times: Want a Better Society? Pay Teachers More

Andrew Hunter argues that wages should be determined more by a profession’s social value than it’s market value.

Ideologues have little thirst for flexibility. They do not bend to circumstance or to the weight of evidence. The prevailing orthodoxy demands free markets and smaller governments.Capital flows should not be inhibited by national borders. Consumers purchase goods with salaries fixed by the market value for their labour. And no-one dares to imagine a scenario by which the salaries of our teachers, doctors and carers have a value that reflects their contribution to our communities.

When the market produces wages that do not reflect the social value of the labour, governments are right to intervene. The growing income inequality evident today would be limited under a policy regime that insists upon wages that reflect a social, rather than market value. Workers who educate our children, or care for our elderly and those with a disability, are indispensable to our community.

Their salary level does not currently reflect the contribution they make. Genghis Khan created an empire the size and character the likes of which has not since been repeated. He created free flows of trade but also insisted upon social progress. Genghis Khan abolished taxation for teachers – a policy which reflected the importance of this role to
social progress. His grandson, Khubilai Khan, built upon this foundation to create a system of basic universal education for young people.

Would any leader today create such exceptional conditions for professions the quality of which defines social progress, and provides a foundation on which a civilisation thrives? Would they use fiscal policy to achieve social outcomes instead of viewing it in the abstract, as the ultimate objective rather than the means through which a stronger society can be achieved? There is not a more important profession when the future strength of a society is concerned, yet our teachers are not held in esteem that reflects this reality.

A renewed faith in public education would also provide more disposable income that would be used for retail purchases, resulting in job creation. The cycle of economic and social benefit is clear. Quality universal health and education services also reduce intellectual inequality and wellbeing inequality. Healthy children surrounded by books, which are accessible to curious young minds, provide a foundation for vibrant, harmonious communities. They may also be comfortable and relaxed, free from the anxieties of dislocation or exclusion.

The gaps between market value and social value are also evident in other professions. A high level of care provided to older citizens is a defining feature of advanced civil societies, yet the remuneration of those charged with this responsibility remains low. The salaries of aged-care workers reflect the market value for their work – but not its social value. The union movement works to bridge this gap but is confronted with an accepted view that salaries are defined by market forces, not desired social outcomes.

The idea that wages should be defined by social value sits outside the accepted orthodoxy. Such is the curse of ideology, which is by nature inflexible and stubborn. It has led to discontent. The return of protectionism and a suspicion of foreign investment evidence of the double movement predicted by Austro-Hungarian economist Karl Polanyi in the 1940s. People feel insecure and want to protect their community – and their futures – from the excesses and absolutism of free markets and governments that are no longer an expression of public will.

New solutions are required if we are to avoid reversion to closed economies and insular societies.