Robinson on equality

January 9th, 2012 at 4:00 pm by David Farrar

writes in the NZ Herald:

New Zealand rugby players come in all ages, shapes and sizes, and both sexes. Players vary greatly as regards their skill levels, commitment and training schedules. Rewards for players are extraordinarily unequal, as most actually pay to play while a very few are paid hundreds of thousands of dollars.

Is this fair or unfair? Should the Labour Party, the Greens or the Occupy Auckland movement campaign for more-equal payment of rugby players? Should the “greedy” All Blacks be forced to hand over some of their colossal income to the more impoverished fellow players? Should the Government intervene to reduce this glaring disparity in rewards?

Reducing the pay of All Blacks and spreading it among the less well rewarded rugby players, even if it is a good idea in theory, poses immense practical problems. Would the All Blacks agree to a significant pay cut? If they did, the team would become a 2nd or 3rd XV of players who were willing to play for the reduced reward.

We would never beat the Aussies, and maybe the All Blacks team would disappear. So the equality campaign would have succeeded in narrowing pay differentials, but at the cost of destroying the world’s greatest rugby team.

But the players would finally all be equal.

and the poor will always be with us. People vary greatly in their talents, work ethic and attitudes. Some people are lucky, others are unlucky. Whatever any government does, the lucky and hard-working will tend to be wealthier than the unlucky and lazy.

Every family is unequal. Both my brothers are much richer than I am, but I don’t envy them or think there is anything unfair about it. I don’t regard them as greedier than I am.

I am the poor relation. If I had worked harder, invested more wisely and spent less time on holiday, I would have more money in the bank, but they are the choices I made. I don’t regret anything so I’m content with our financial inequality. When I met my brother on holiday on the Gold Coast, I stayed in a motel-cum-backpackers while he stayed in the Sheraton.

He should have complained to the Government that his brother had been too successful.

New Zealand is an unequal society, just like every human society, just like every family. An equal society is impossible, an unworkable nightmare involving zero incentives and gross unfairness. Why should a cleaner be paid the same as a surgeon? It’s a ridiculous idea. I’ve cleaned toilets at the minimum wage but I don’t think it was unfair that I was paid less than when I was a teacher.

The All Blacks and some chief executives earn mega-salaries but they also pay stacks of tax. New Zealand’s tax and benefit system transfers many billions of dollars from rich Kiwis to poor Kiwis year after year.

In fact if you have a couple of kids you don’t even pay net tax until you earn around $55,000 or more.

The way to reduce poverty in New Zealand is to increase exports, improve workers’ skills and productivity, create more wealth and jobs, and then raise the minimum wage.

If New Zealand is becoming more unequal, the answer is for us poorer ones to work and save harder and smarter in order to even things up.

How outraegous. He has overlooked that it is all society’s fault.

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32 Responses to “Robinson on equality”

  1. Linda Reid (415 comments) says:

    I’m a little bit in love with Martin Robinson. He says it so very, very well.

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  2. Danyl Mclauchlan (1,069 comments) says:

    If the All Blacks were paid the same way New Zealand workers are, the majority would earn less than $40k/year, the captain and the coach would be paid a million dollars a week, and they’d spend all of their time canceling training sessions and laying off support staff so they could finance their additional bonuses and dividends. All of our good players would leave the country as soon as possible, and the captain would spend all of his time blaming the referee and his ‘red tape’ for the fact that we never won a game.

    [DPF: Oh dear few things sadder than someone whose knowledge of business seems to be based purely on reading newspaper stories.

    You should try working in the private sector at some stage. It isn't the caricature you make it out to be]

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  3. Manolo (13,765 comments) says:

    Vive la différence.

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  4. East Wellington Superhero (1,151 comments) says:

    While I agree Robinson’s column, I do have one beef. And that’s with the unhelpful term “luck”.

    It pisses me off when people talk about “luck” being the reason someone is doing well. Chance certainly exists in the world, but to suggest someone gets rich by “luck” is ridiculous. Unless you win Powerball which is altogether different. Further to that, being the child of wealthy parents is not “luck”. Their parents had to work to get their wealth. The child is certainly fortunate, but not “lucky”.

    Yes, chance probably has an affect on the down side – say if you got a 1-in-100,000 disease, but you don’t accidentally make money. Further to that, my cousin with cystic fibrosis is a successful architect and another friend with muscular dystrophy is on his way to become an excellent academic – so I’m sceptical about the degree to which ‘chance’ diseases can doom you to fate.

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  5. Danyl Mclauchlan (1,069 comments) says:

    Oh dear few things sadder than someone whose knowledge of business seems to be based purely on reading newspaper stories.

    You should try working in the private sector at some stage. It isn’t the caricature you make it out to be

    You know, I did work in IT and merchant banking for like, fifteen years . . .

    [DPF: You must be a lot older than you look! Anyway, was this really your experience then with the private sector employers you had?]

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  6. Weihana (4,537 comments) says:

    David,

    What if we paid the All Blacks 10 times as much as they get now? Would they be 10 times as good? The law of diminishing marginal returns says they wouldn’t.

    It seems a straw man to imply that everyone on the left is arguing for absolute equality. It seems to me the idea is that there is too much inequality, not that there should be no inequality at all. But what is “too much” inequality is difficult to answer.

    The All Blacks won the World Cup so I guess they are paid about right. :)

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  7. Weihana (4,537 comments) says:

    EWS,

    I agree with the thrust of what you are saying – the harder you work the luckier you are – but a child born to rich parents is lucky.

    Luck is defined as:

    “the force that causes things, especially good things, to happen to you by chance and not as a result of your own efforts or abilities”

    So if the child isn’t lucky then somehow his parents wealth is a consequence of his efforts and abilities. Surely that is absurd. Doesn’t matter in my view. It’s his parents and as a consequence of earning wealth they have every right to spend it on their child.

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  8. decanker (184 comments) says:

    Meanwhile, provincial rugby struggles to stay afloat with the middle tier/class increasingly indebted and the lowest levels unable to even pay their fees to support their higher-level club mates. Hrm

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  9. Richard29 (377 comments) says:

    “An equal society is impossible, an unworkable nightmare involving zero incentives and gross unfairness. Why should a cleaner be paid the same as a surgeon? It’s a ridiculous idea.”

    This is classic slippery slope fallacy. It also equates equality of outcome with equality of opportunity. The former is the goal of extreme forms of communism the latter is the goal of an active welfare state.

    “The All Blacks and some chief executives earn mega-salaries but they also pay stacks of tax.”

    This isn’t true nearly as often as it should be. More commonly it is the upper middle class who pay the most tax. Many (but by no means all) of the very wealthy hire an accountant to shelter income in structures like trusts or LAQC’s and accrue much of their wealth via untaxed capital gains.

    @ East Wellington Superhero “The child is certainly fortunate, but not “lucky”.”

    And thereby you completely contracticted the point you were trying to make. Could you perhaps give me a synonym for “fortunate”? The best Microsoft Word could give me was Luck, Providential, Opportune and Priviledged.

    Again (as is often the case in the welfare debate) this comes down to opportunity vs outcome. Providing a basic safety net and sinking decent amounts of resources into universal free public goods like health and education is essential to providing this equality of opportunity. The welfare state is not the enemy of capitalism it is an essential part of it. Capitalism operates on the basis of meritocracy, markets want healthy educated workforces, and that requires equality of opportunity and investment in people that all those nasty evil taxes pay for.

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  10. Scott Chris (6,135 comments) says:

    David Farrar says:- “In fact if you have a couple of kids you don’t even pay net tax until you earn around $55,000 or more.”

    I’m sure you meant net INCOME tax which only accounted for 43% of total crown revenue in 2005-2006.

    http://en.wikipedia.org/wiki/File:New_Zealand_Revenue_2005-06.png

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  11. Other_Andy (2,676 comments) says:

    @SC

    When you add up all the benefits (WFF, Accommodation supplement, community card) you probably find (depending on their circumstances and the number of children) that they are probably not a NET taxpayer.

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  12. simonway (387 comments) says:

    Why should a cleaner be paid the same as a surgeon?

    Does Martin Robinson know anybody who is actually advocating this? He certainly doesn’t name anybody, yet he insinuates that it is the policy of Labour, the Greens, and Occupy Auckland. If I were inclined to do something similar, I might say:

    I disagree with the National Party about how best to grow New Zealand’s economy. I think it would be morally abhorrent to forcibly intern the country’s East Asian population in concentration camps. They are people, and they have the same rights to liberty as the rest of us.

    Of course, the National Party has never proposed any such thing, or even anything like it. The statement would be a non-sequitur that served no purpose except to unsubtly smear a group that I didn’t like. Which it seems is exactly what Robinson is trying to do.

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  13. mikenmild (11,247 comments) says:

    Good call simonway, it’s pretty easy to invent an extreme line with which one can take issue for rhetorical effect.

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  14. gazzmaniac (2,307 comments) says:

    Regarding luck –
    I have just read Peter Fitsimmon’s book about the early Antarctic explorers.
    Roald Amunsden relied on good preparation, a simple plan and a proven method of locomotion (ie dogs) to get to the South Pole.
    Robert Falcon Scott relied on unsuitable and untested methods of locomotion to lay depots (ponies and mechanical sledges) as well as man hauling (which works, but at the expense of a person’s condition especially on low rations) to get to the South Pole. They also kept changing and complicating the plan, for example they didn’t put the 1 ton depot as far south as planned.

    Roald Amunsden made it there first and got back with no fatalities (apart from the dogs, which were tasty).
    Alarm bells were ringing among members of the Scott expedition even before the attempt, their diaries are full of lines like “our luck must change soon” and “with Providence on our side”. We all know what happened to Scott’s party.
    Was Scott unlucky? Yes. He and his party were caught out in blizzards that lasted several days and they were unable to do anything about it. If the weather had been better then they would have made it back, particularly considering they were stuck in a tent only 11 miles from one ton depot for three days prior to their deaths. But was Amunsden lucky? Not really. He had equally bad weather, but his better preparation and method of getting to the pole allowed him to reduce the risk of failure significantly.

    Yes some people are fortunate. Some families are fortunate – I have no doubt in my mind that Sam Morgan wouldn’t be as rich as he is today if his father wasn’t Gareth Morgan. But you can also look at siblings from the same family and see totally different results. Is the richest of them “luckier” than the others? No. They all have different skills and they all have different work ethics and it is those that make a difference too. One has to assume parents give all their kids the same values, it is what they do with the opportunity they have that makes a difference. And in Australia and New Zealand, if you are from a low income family you can still choose to be say a doctor or merchant banker if you want to. It might be more work (especially financially) for people from low income families, but there is no barrier to prevent you from doing it. In that way, New Zealand and Australia are the most equal countries in the world. Not the most equal in outcomes, but the most equal in opportunity.

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  15. Other_Andy (2,676 comments) says:

    Simonway

    And whose problem is that?
    “Pay inequality” is a slogan and Labour, the Greens, and Occupy Auckland are more than happy to shout slogans or support those who do.
    As long as it stays a slogan it can mean anything you like.
    What is equality?
    When have we achieved “Pay equality”?
    How are we going to achieve it?
    It’s easy to shout slogans.
    And…
    Your analogy doesn’t hold water.
    You might be able to work out why.

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  16. dime (9,972 comments) says:

    what kind of an asshole roles in a 5 star hotel while his brother is in a motel down the street? what a shit holiday.

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  17. mikenmild (11,247 comments) says:

    dime
    Good call. Harry Enfield had a series of sketches featuring a rich guy lording it over his sister and brother-in-law – “we are considerably richer than yew”

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  18. F E Smith (3,305 comments) says:

    The All Blacks won the World Cup so I guess they are paid about right

    That is complete rubbish.  By World standards the All Blacks are underpaid.   Their performance in the World Cup says nothing about what their pay was prior to their winning it.

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  19. Scott Chris (6,135 comments) says:

    “Why should a cleaner be paid the same as a surgeon?”

    http://en.wikipedia.org/wiki/Reductio_ad_absurdum

    Reminds me of Douglas Adam’s story of the Golgafrinchams, who decided to ship all the useless members of society such as telephone sanitizers and interior decorators off to another planet, thus leaving behind all the useful people. In a twist of fate, the useful people thrived for a while until they were wiped out by a virus spread by the use of unsanitized telephones.

    (incidentally, the planet the useless members ended up on was earth, where they promptly wiped out the Neanderthals and became our forbears. Cynical bugger was Adams.)

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  20. Weihana (4,537 comments) says:

    F E Smith,


    By World standards the All Blacks are underpaid.

    Or everyone else is overpaid.

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  21. F E Smith (3,305 comments) says:

    Weihana,

    Or everyone else is overpaid.

    Of course that is possible, but then you could argue the same thing about everybody earning more than the average wage.  Or any wage you want to pluck out of the air.

    But considering that wages in the European rugby union competitions are a matter between the clubs and each player (i.e. the market decides) then right now the conclusion must be that you are incorrect.  Rather, it appears that the NZRFU is taking advantage of the All Blacks brand to hold the wages of its contracted players, almost all of them All Black hopefuls and the only people actually eligible for the All Blacks, down.

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  22. Rat (383 comments) says:

    and that article explains why salary caps are a disgrace

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  23. Weihana (4,537 comments) says:

    # F E Smith (1,482) Says:
    January 9th, 2012 at 8:25 pm

    Weihana,


    Or everyone else is overpaid.

    Of course that is possible, but then you could argue the same thing about everybody earning more than the average wage. Or any wage you want to pluck out of the air.

    But I didn’t pluck a wage out of the air. I noted that the All Blacks won the World Cup and on that objective standard their wage achieves what no other team in the tournament could.


    But considering that wages in the European rugby union competitions are a matter between the clubs and each player (i.e. the market decides) then right now the conclusion must be that you are incorrect. Rather, it appears that the NZRFU is taking advantage of the All Blacks brand to hold the wages of its contracted players, almost all of them All Black hopefuls and the only people actually eligible for the All Blacks, down.

    Holding them down? In what sense? They appear to be the best in the world. They don’t have to play for the All Blacks.

    Since when did objective outcomes become irrelevant to what people are paid? If you pay someone to clean floors or wash dishes then how much you pay them is influenced by the productivity you can expect from them. So why should the All Blacks be paid more if what they already receive motivates them sufficiently to win the biggest tournament in Rugby? What more can be achieved? The reality is all the players play at the top of their game trying their utmost. Why should they receive more? If a floor cleaner was maximizing their utility would you raise their wage for no increase in productivity or an increase that is not worth the increase in their wage?

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  24. gazzmaniac (2,307 comments) says:

    I guess the possibility of playing for the All Blacks is worth more than the extra money they would get if they played in France. They wouldn’t be playing in New Zealand if it wasn’t for that.

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  25. The Scorned (719 comments) says:

    I was with him up until he made the silly and contradictory ( compared to his other sensible suggestions ) claim that we needed to raise the minimum wage….major economics fail there Mr Robinson.

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  26. Yoza (1,872 comments) says:

    The All Blacks do not prey on the poor the way the wealthy do. Although, with the advent of the professional rugby player that is changing and, more often than not, the role of the professional rugby player is to participate in the relentless stripping of economic power away from the bottom of the socio-economic heap and repatriating that loot in the clammy paws of the well heeled.
    I can’t help noticing the economic model the NZRFU has selected is slowly bankrupting New Zealand rugby as the crowds stay away in droves from representative games.

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  27. Manolo (13,765 comments) says:

    The All Blacks do not prey on the poor the way the wealthy do.

    Do you care to explain your class-warfare statement?

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  28. willtruth (243 comments) says:

    We should strive for equality, but also realise that some inequality is necessary in order to get the things we want (e.g. All Blacks and brain surgeons).

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  29. willtruth (243 comments) says:

    Funny though, the untouchable ’87 All Blacks were the most poorly paid of all the AB cup squads (they only got a $50 bar tab as a bonus for winning the final).

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  30. F E Smith (3,305 comments) says:

    yoza,

    The All Blacks do not prey on the poor the way the wealthy do.

    Is it difficult to hate as much as you do?  Talk about unreconstructed class warfare from the 1920s.  You probably think that Uncle Joe lead his people to prosperity and happiness as well…

     
    Weihana,

    You misunderstand:  the NZRFU control something that nobody else has access to- the All Blacks.  Because of that, they are able to pay the players who accept contracts with the NZRFU less money than that player would likely earn overseas, because the player wants an All Black jersey.  That Black jersey, and the chance to wear it at the World Cup, transcends the normal theories about the worth of the worker in this case.  Your statement about them being paid about right is, therefore, incorrect.

    You would be better looking to Association Football regular seasons if you want to use that phrase.  Knockout competitions are not good examples of whether someone is paid appropriately or not.

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  31. Weihana (4,537 comments) says:

    F E Smith,

    I understand your point, I just don’t see the problem with the NZRFU trading on that basis. The fact that they trade on that basis does not, in my view, mean they are underpaid or that they are actually worth more. If the remuneration package they are given produces the greatest team in the world then the price being paid is the correct one. It would only be charitable for the NZRFU to offer them any more as the NZRFU is surely getting as much as they could ever hope for already given that they recently won the World Cup.

    Even taking account of the fact that the World Cup is a knockout tournament where the best team may lose, I think it was pretty clear that the All Blacks were the best team in the competition overall despite a little bit of last minute nerves that nearly cost them the tournament.

    Anyway, bringing this back to the discussion on equality, the point was that as you increase remuneration you will inevitably get diminishing returns and especially for people who earn very large incomes their productivity is often influenced a lot more by their pride than their income. This is true for the All Blacks as their black jersey is often just as important to them as how much they are paid.

    Therefore, while inequality creates incentive for people to be productive, too much inequality directs income towards those whose productivity is less influenced by how much they receive whereas if given to those who earn less it may generate greater productivity returns as the productivity of such people tends to be more influenced by how much they are compensated. That’s not to say an unskilled labourer should be paid the same as a CEO, but if the income gap keeps growing it is doubtful that this will serve to maximize the utility of the labour that is available.

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  32. Luc Hansen (4,573 comments) says:

    I hate meanderings that commence with a total straw man argument. I lose interest at that point. It happens a lot, especially on Kiwiblog.

    Never mind. Thought for the day. The teachings of Jesus are often misappropriated by the venal – namely, the church -and what people need to know is that what Jesus actually said, with a sigh, was:

    “…the rich will always be with us.”

    It’s just part of the human condition, which Jesus recognized.

    There are many other distortions, but that will do for a start.

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