Monday, April 25, 2011

On compensating differences and amateurs

A fine post from Will Wilkinson at the Economist's Democracy in America blog about the partial replacement of professional newspaper photography by high-end "amateurs" nicely illustrate a general point, which is that salaries will usually be low in fields in which there are lots of people who enjoy the job enough that they are willing to do it for little in the way of monetary payment.

I suspect, for example, that in the absence of unions, elementary school teachers would make less than middle school teachers precisely because it is more fun to teach little kids than tweens. A similar point applies to daycare workers. There are lots of pretty good amateurs without degrees in child development willing to do this job for low pay, because they like hanging out with children a lot more than standing at a retail counter or an assembly line, and so the wages stay low unless propped up by laws that limit entry via degree requirements.

This also explains why humanities professors make less than faculty in other fields, and why so many people are willing to spends years getting doctorates in the humanities even when the chances of ending up in a tenure track position are low. There are lots of people who think it would be great fun to spend all their time thinking about, and teaching about, and researching about, literature and art. Some people think that about economics and physics, too, but the person at the occupational margin who sets the compensating difference is less enthused, or at least has better outside options that give some of the same satisfaction.

Still more broadly, it is always worth remembering when people talk about inequality in wages or incomes that any proper moral theory should be concerned with inequality in utility, rather than wages, and that in some cases more wage equality can mean less equality of utility. This will necessarily be the case if wages for jobs that are more fun are made equal to those in jobs that are less fun.

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