On the Relatively Low Salaries of Relatively Essential Workers
6th October 2013
Don Boudreaux, a Real Economist, points out some inconvenient truth.
First-responders’ pay is as low as it is because there are plenty of people able and willing to work as high-quality first-responders relative to the ‘need’ that we have for first-responders. With so many highly skilled and dedicated people already working as first-responders, the value of the additional first-response services that we’d enjoy if we hire one more equally skilled and dedicated person to work as a first-responder is very low. So we’re – rightly – unwilling to pay very much to hire this additional first-responder. It makes no sense to pay an additional, say, $100,000 annually to get labor services that produce an additional, say, $30,000 worth of output.
So understand our good fortune! We live in a society blessed with an abundant supply of high-quality live-saving labor services.
Ask: would you prefer to live in a society in which people’s ability and willingness to work as first-responders were as scarce, relative to our ‘need’ for such services, as is the ability to work as a N.F.L. quarterback? If our society were populated not with tens of thousands, but only with a few dozen, people who can supply top-notch first-response services, would we be better off than we are in reality today or would be worse off? The answer is obvious: we’d be worse off.
First-responders would be better off. They would each be paid very handsomely for their services. But many more of us would, as a result of this wage-raising scarcity of first-responders, die in automobile accidents and home and workplace fires. High-quality first-response services would be very scarce and, hence, very highly priced. Fortunately for us, our world has an abundance of high-quality first-responders. It’s a blessing that we get such essential life-saving and life-enhancing services at relatively low costs.
Markets work even when you don’t want them to. Teachers are another illustration of the basic principle that how well people are paid is not a function of how important is the work that they do but of how many people can provide the same service.