Wednesday, August 14, 2013

An Email To "Afternoons At Radio NZ

Hi Jim, Jo Bennett set off quite a debate about his views on extreme differences in pay rates and it continued with more discussion about whether large differences in pay rates are well deserved and a necessary driver to get better performance out of an economy.

My contribution to this debate would be to to tell you about behavioural research with social primates that I read about. It showed that when unequal rewards were given to individuals asked to do similar tasks in full view of the others, the least and the most rewarded performed the worst. When the rewards became more even, their performances improved.

Similar research was done in a later study with humans and much the same thing happened. It seems to me that initial satisfaction of the over-rewarded was followed soon by guilt and and anxiety which affected their performance. Resentment dampened the enthusiasm of the under rewarded. 

Apparently, when the rewards in both studies became more equal, the performances improved  across all the groups. It seems to me that social primates and humans accept some inequality quite happily, but become agitated and stress out when it becomes extreme. 

When the levels of reward for work were more even in Post War NZ, I too remember a country that was less stressful in many ways and more prosperous relative to other countries at that time. Today we appear to be suffering the effects of accepting a more unequal society . 

In my opinion we are slowly losing our ranking in many ways relative to other nations because of this. My solutions would begin by restoring what worked in Post War NZ economically and keep the hugely beneficial social reforms since then. We can even use small parts of Rogernomics, that we like and work for us. The big question is, have we got the guts to stop the rot and demand change for a more equal income distribution from our Government or will it take more social problems, severe recessions, depressions and wars to inflict enough pain for us to sort our problems as a nation?

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