When reading Owen Jones’ Chavs a while back I made a mental note of a reference he made to an attempt to assess the ‘value to society’ of a range of different occupations. Belatedly I’ve followed up. The reference was to a document produced in 2009 by the New Economics Foundation (NEF). In this blog I summarize this contribution and comment on it.
The report was issued in the wake on the global financial crisis of 2008-2009 and the growing inequality that has characterised neoliberal societies since. NEF calls for a radical programme to address and counter this inequality. It is in this context that its ‘social return on investment’ (SROI) analysis is cast:
‘Our Social Return on Investment analysis is not just an intellectual exercise – it has big implications for the way in which our society and economy are structured. Financial incentives are very powerful, and we tend to shower them on some of the professions that are the most socially and environmentally costly. This promotes undesirable behaviour, while positive activities are discouraged.
We have not aimed for precision in our calculations – there may be aspects of value that were left out. The point was to draw attention to the issue. We have not included detailed recommendations because it is clear to us that there are deep structural issues that need to be addressed, and change will not come overnight.
This does not mean that governments are powerless. Much more needs to be done to reduce inequality, and the focus of policy needs to be at the top of the income scale. There has been little or no political appetite for reigning in high pay and this reflects a systemic malaise and complacency that have created a climate for market failure. It is time to learn the lessons of that failure, and to challenge high rates of senior executive pay.
It is important to separate out the professions we have examined from the people atually doing the work. This is not about picking on individuals, and many of those in the highly paid professions discussed may be very good people. We recognise that it is the institutions and systems that promote self-interested behaviour, and it is these institutions and systems that need to change. Most people are simply responding to incentives, so we need to ensure that the incentives on offer align with the social and environmental value that our economy needs to deliver.’
SROI is presented as a method for measuring and evaluating the consequences that follow from the work of people and organisations: ‘this is value not only in the conventional economic sense, but also in environmental and social terms – taking environmental degradation into account, for example, or changes in the well-being of individuals.’ Further: ‘SROI aims to capture as wide a range of outcomes as possible. By aggregating the value of all these changes, it is possible to compare their magnitude to the size of the investment. The end result is an SROI ratio, which tells us how much social value is created for each pound invested. This is a measure of how effective the work is in creating beneficial changes for everyone involved.’
There is no space here to go into the SROI methodology in detail (see NEF, Dec 2009 ISBN 978 1 904882 69 5). I will rather give the gist of its authors’ findings. A mix of six high and low-paid professions were selected for analysis, and the conclusions were as follows.
- High-earning investment bankers in the City of London. The earnings they command and the profits they make come at a high cost because of the damaging social effects of their financial activities. Rather than being ‘wealth creators’, ‘these City bankers are being handsomely rewarded for bringing the global financial system to the brink of collapse’. While collecting salaries of between £500,000 and £10 million, leading City bankers destroy £7 of social value for every pound in value they generate.
- Childcare workers, salary scale £10,000-£13,000, could not be more important for society as a whole. As well as supllying a valuable service for families, childcare workers release earnings potential by allowing parents to carry on working. They also unlock social benefits in the form of learning opportunities that children gain outside the home. For every pound they are paid, childcare workers generate between £7 and £9.50 worth of benefits to society.
- Advertising executives enjoy high status but their impact remains controversial. ‘It can create insatiable aspirations, fuel feelings of dissatisfaction, inadequacy and stress.’ According to the analysis, top advertising executives destroy £11 of value for every pound they generate.
- Hospital cleaners, salary £6.26 per hour, play a crucial role in delivering safe health care. They clean hospitals, help maintain standards of hygeine and protect against infection. They also contribute to health outcomes. It is estimated that for every £1 they are paid, over £10 in social value is generated.
- Tax accountants come in different shapes and sizes, but for for some highly paid representatives their sole purpose is to help rich people and companies pay less tax; in such cases the positive benefits for society are negligible. HM Revenue loses out. For a salary of between £75,000 and £200,000 tax accountants destroy £47 of value for every pound in value they generate.
- Waste recycling workers, £6.10 per hour, undertake a range of tasks embracing the processing and prevention of waste and promoting recycling. Recycling significantly reduces carbon emissions. There is value too in reusing goods. For every £1 of value spent on wages, £12 of value will be generated.
I hope readers will see what attracted me to this way of assessing/evaluating the social value/worth of people’s employment. It is an appetiser of course. But not only is it worth pursuing in its own right as a viable, vital and significant project of professional and policy sociology, it should be extend to cover the highly gendered unpaid work done in the home.
Presently, it is surely apparent that too many (most conspicuously within the top 0.1%, but extending through much of the top 10%) are being disproportionately rewarded for putative work that: (a) exploits ‘the many’, and (b) substracts rather than adds to (prospects for) the ‘good society’. This is where critical, public, foresight and action sociology must kick in (see assorted blogs).