Tag / economics

by Nathan Coumbe

Same job, different pay

I saw a job posting’s salary description the other day that gave me pause.

The salary was dependent on three things:

  1. The number of courses taught (yeah, that makes sense. More work = more pay)
  2. The type of courses taught (More advanced courses = more difficulty = more pay. Also makes sense)
  3. The educational level held by the instructor…

That third item is the one that gave me pause. Here’s why:

If two people are doing the exact same type of work at the exact same level of quality, why should one with a higher-level degree be paid more than the person with a lower-level degree?

You might say, “Well, they went to school longer. They have more education. They’re more qualified.”

So what? Does that degree automatically mean that the person is more skilled at the job? No, not at all. 1

More education does not automatically confer a higher level of qualification or suitability for a job. The skill of the person, and nothing else, does that.

If the person with the higher degree actually delivers more or better work than the other, then I understand receiving more pay. They are arguably more valuable. But that has nothing to do with the degree and everything to do with the output of the worker.

Additional education might enable that higher quality, but then again, it might not. There are countless MBA graduates out there who are suitable for little more than responding to email or working in middle management. They would flounder trying to run a small business.

Perhaps changing the nature of the work in question would make this make more sense:

Let’s say Person A has a master’s degree in burger-flipping, and Person B has a bachelor’s degree in burger-flipping. But both workers flip the same number of burgers each hour at the same level of quality expected of anyone on the line.

Should Person A be paid more money simply because they got a master’s degree in the subject? I would argue no, because the quality of the output and the nature of the work are the same.

You might think I’m stretching this a bit, but I’m not. It’s the work that matters, the output, the results.

A person’s demonstrable skill determines their qualifications, not a piece of paper. That paper is often a false proxy for genuine qualification, a stand-in for real value.

But we buy into it because we’ve been trained to believe that more is better, higher is better. We must stop this.

We have to start measuring the proper targets and rewarding the right things appropriately.

  1. I’m aware that teachers are paid at different salary levels based on their educational levels (e.g., a master’s degree earns more income than a bachelor’s degree. However, just because that’s the case doesn’t make it right.

    Teachers should not be paid based on how much schooling they received, but on how good they are at schooling others. If someone with a master’s degree is educating students in a way that they outscore everyone else, then I can understand paying that teacher more (and she should share her secrets with everyone else so they can level up their students and make more money too!).

    Also, teachers should simply be paid substantially more than they currently earn, but that’s a topic for another day… ↩︎
by Nathan Coumbe

Lack of work might be making you unhappy…

Feeling unhappy? I can probably guess why…

You don’t have a project to work on.

“Prod any happy person, and you will find a project.“

—Richard Layard, economist

I don’t mean a project at work: one of those mindnumbing, agonizing, tedious, pointless tasks you’ve been given by your boss just to look busy.

I’m talking about something that matters: a project that makes you happy. A project that makes a difference. A project that changes someone else for the better.

Seth Godin would call that kind of project “art.” And it doesn’t have to be a painting, song, or movie. It just has to matter to you. 

And it helps if it makes the world a better place.

A quick way to find real happiness? Start working on a project.

(If you want to learn more about this argument, check out Layard’s book Happiness: Lessons from a New Science)

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by Nathan Coumbe

Make a huge difference with one small behavior change

In his second great book, The 8th Habit: From Effectiveness to Greatness, relates the story of Muhammad Yunus, an economics professor who founded the Grameen Bank – an institution that makes microloans to the impoverished citizens of Bangledesh. His story deserves to be quoted at length, but I will not do that here. What follows is a summary.

Muhmmad Yunus Saw a Need

Muhammad Yunus earned a Ph.D. and began teaching economics at a university in Bangladesh. While he was inside lecturing on macroeconomic principles, the citizens of Bangladesh were struggling to survive in a life of abject poverty.

One day when Dr. Yunus walked out of class, he passed a woman making beautiful, handmade bamboo chairs. Upon further discussion, he determined the woman was making two pennies per day.

Why? Because she was in a terrible arrangement with her supplier who only allowed her to sell the chairs back to him. Dr. Yunus then discovered that the woman only needed $0.20-0.25 cents to buy the materials herself, then she would no longer be in bonded labor to the supplier.

He discovered that other citizens were struggling in much the same way. His assistant went around asking how much money different people in his neighborhood needed to make a living: he reported back that all together they needed $27.

TWENTY-SEVEN DOLLARS! Dr. Yunus took that money out of his wallet, gave it to his assistant, and told him to tell those who were receiving the money simply to pay him back whenever they could (which they all did, eagerly and quickly).

Dr. Yunus Met a Need

There is much more to the story than that, including a long battle with banks in the area who did not believe anyone would pay back the money that was loaned to them (which they did). Dr. Yunus discovered, simply by opening his eyes and talking to people around him, that while he might not be changing the world with a $27 loan, he was changing someone’s world.

Dr. Yunus went on to create and found his own financial institution, Grameen Bank, which specializes in making small loans to people all over Bangladesh so they can create businesses, making a living, and pull themselves out of poverty. To this day it has loaned billions of dollars in microcredit to hundreds of millions of citizens, and it changed their lives.

Why am I telling you this story?

What You Need to Do

Change how you move through the world. Today, and each day for the rest of your life, when you drive around town, walk outside, or even scroll through social media, pay attention to the people.

What are they doing? What are they posting on social media? Can you identify a need in what they are saying? Are they struggling to accomplish a task or project?

Are they asking a question to which you know the answer or have a solution?

Assume, as Dr. Yunus says, “a worm’s-eye view” of the world. Don’t look for huge problems to solve: look for small, everyday problems. Find someone in need, ask yourself if you have the will and the skill to meet that need, and then do something about it. Show up, solve a problem, and keep doing that over and over again.

Ask yourself if you have the will and skill to meet someone’s need today.

You may not change the world, but you will change that person’s world. Do that enough times, solve enough problems for people, and you might begin to see a greater need that can be met by a business, service, or non-profit.

Find a need, meet the need, and make a difference today.

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