Why Most Risky Jobs Pay a Little?

When I see my favourite pop star, Krisdayanti, with her glamorous life, and then compare her with my elementary school teacher, for example, I can see an obvious economic inequality. Quoting Paul Graham, this phenomenon is not intrisically bad since the rewards a job offers its incumbents should be proportional to the risks it requires them to take.

Krisdayanti dedicated her entire life–privacy (no one will bear a life without it), time (almost with constant stage to stage performances and lots of agenda), money and her family–to survive in such demanding job area as entertainment. This world requires her and whoever decided to plunge themselves into it to put their best efforts to survive. Once she makes mistake, she’d better try very hard to make it up or her career will end up so bad her competitors are happy to takeover her position in the industry. There are too many examples to take; Any star’s career can be thrown away instantly by love affairs, underperformace, unexpected changing market (which is always so), lawsuits, drug abuse, copyright infringements, fierce competition, and plenty of others.

On the other hand, my teacher spends his 25 – 30 years of career by depending to a small amount of salary to support his household and expecting his old age later will be long enough for him to enjoy his far-from-adequate pension money. His working hours is constant and occasionally longer than his students’ time in classes plus addition time to make correction to his students’ homework or exam results. This working atmosphere is apparently less stressful so long as he can manage it well. And the only competition he deals with is to gain point credit so he can be promoted to higher rank or perhaps a principal.

Let’s consider the extreme case: people who earn money by risking their very lives to save others or create a comfortable life for the rest of the society. Obviously they are unfortunate to gain only a fraction (a very small one) of what a top artist can earn. Police officers and soldiers of low ranks, nurses and firefighters are one of them.

So how come these undoubtedly most risky jobs pay much less than those of fairly risky ones that entertainers would deliberately take? Does it imply that society in general put no or little respect to people who work for helping others while putting their lives at stake? If so, why?

Like anywhere in the capitalist world, jobs market adheres to supply-demand law. If you are one of few people who have certain qualifications employers dream of, you can work for any employers offering you the most. Suppose in the future your skills is widely possessed by other job seekers (because they see it promising so they learn it), you will have less bargaining power over your employer, resulting not in smaller income perhaps, but reducing your share in the market and thus limiting your options. This is what happened to average programmers since the booming of education insitutes offering degree or certification on IT related stuffs, and will soon happen to Chinese speakers in Indonesia since the reopening of diplomatic link with China on 1991.

As one may notice, supply-demand law in jobs market doesn’t work exactly like in other areas, consumer goods market for example. If you want to buy shaving cream in a store and find that it is out of stock, chances are you can easily find it in another store with roughly the same price because every store sells it. Even if it runs out too, or the price becomes higher (because the seller knows it’s rare then) you can either buy it at that rate, or use any cream to shave, or use no cream at all and still get your face clean, though less conveniently. But if you want to build a software in Java and you cannot find any decent Java programmers to commit their time to your project, you cannot hire other than Java programmers simply by raising your offer to attract them to program using the language they are not interested in the first place. In this case, perhaps you could hire less capable Java programmers and let them learn by doing your project at your dime, but then you put your entire project (and business) at stake. The lack of commodities is at some point can be managed by subsitution; the lack of human expertise is not something that can be treated as such.

Meanwhile, people usually simplify the roadmap by classifying this world into white vs. blue collar worker as well as managerial vs. technical roles and then associate one with better wage than its counterpart. It implies that certain jobs deserve high wage while others don’t simply by the social prestige they inherently have. By not denying this, people unconsciously admit that the value of a job relies on what overall impression it would make to others. Because people despise having to sweep the street (even for social service) they associate it with low payment.

It is better to say that being a street sweeper or scavenger pay you less because of 2 reasons: that nobody will normally consider it, and that it relies on nothing else but physical power. The first consequently brings lower street sweeper supply in the market, and then increases the demand and should normally make better wage, but apparently it doesn’t work this way because all street sweepers can offer is what everyone else can do if s/he wishes.

Furthermore, let’s consider the extreme negative: If nobody wants to sweep the street so that a demand for street sweeper increases, is it more likely that the wage increases proportionately? The answer is yes, so long as the raised compensation doesn’t change people’s attitude about its work nature. The only way this will likely happen is when there is no significant proportion of unskilled labors toward the overall workforce and at the same time a very low (slightly above zero) unemployment rate; both of which are utopia, even in the developed country.

So, it seems a matter of taste to decide what kind of job to take, despite the payment. It is generally believed that a “low job”, the kind that makes you deal with dust, stain, dirty stuffs and sweat you up should pay a little. It is no coincidence that jobs like these only require physical power and limited skills. (Mechanics is an anomaly. How much he earns depends fully on how skillfull he is, where he works and how critical his position is to the success of his employer. A skilled mechanic in a racing team is of very critical value.)

If an unskilled labor is asked in the interview what contribution he can offer his employer-to-be, he will probably answer: my energy. And there is nothing more abundant any employee can offer than everybody’s least leveraging capital.

Now we have 3 factors that influence the compensation level a job would normally offer in the order of ascending magnitude and thus each one supersedes the former: the intrinsic risk it has, people’s attitude toward it, and what people should give away to do it. To make up the ill-formed, restricted supply-demand law as applied specifically to job market, we can add the fourth factor: how critical the expertise (not people) is to the success or failure of the employer. It makes sense to think your expertise scarcity as a bargaining win over anyone hiring you; that’s perfectly correct in the old days. But in this competitive era it’s about how much share an expertise plays in driving company’s success. The power to make difference over the power of being “urgently required” at any time.

These combined factors explain well to security officers (personal bodyguards, policemen, armies, firefighters, etc) which were formerly regarded as anomaly in high-risk jobs paying a little. We all know that this kind of job is not for those who fear to take huge risks, so we can start presuming a higher wage for it. Since nobody will normally consider doing it (negative attitude), it should pay less. But this job requires anyone to give away his/her physical power, skill, gut and unusual working hours, resulting higher wages. Then when we see it from the fourth factor, security is also a critical expertise in doing businesses, whatever they are. So long as the business generates and manages wealth and there is demand for such wealth, security always counts. But a security to business, unless it is the core competence, is like a safe deposit box to jewellery or share bonds; it doesn’t increase the wealth a business creates, it just prevents them vaporing.

Nevertheless, not having a deposit box is also net lose for everyone, so we conclude that security officers should pay reasonably high which, again, contradicts reality.

Why contradiction? It’s because government interferes. Even in the developed countries, government always plays its cards in determining the compensation of a job despite the previous factors we have investigated. This contradiction doesn’t happen on private personal bodyguard since his employer is usually a very rich and powerful person so he can literally pay him at any price he mentions. But when it comes to security officers which happen to be state-employers, I think government pays them less because in its political mindset it cannot bear thinking it has a very organized, armed, well-trained, ubiquitous and highly-paid group of employees having legal law coercion power stand at all time behind him, where it will be a serious political threat (or balancing power, depending your preference) if it is given economic power. However, modern society is constantly evolving toward self-regulation and thus decreasing security officers demand that should make them paid less eventually.

So, government which is mainly politicians pays them less to create a subtle bargaining power over them.

Which is not effective if we add into account the fact that money is not the only motivation for taking a job, and even more absurd if we realize that both government and state-owned security officers have contributed in disrupting everyone’s chance to get paid more fairly and one’s right to defend one’s self.

So the solution to this problem is to have a state-less country, in which people govern themselves, a self-regulatory society. But as much as I think it is really possible to have it today, people in general will consider it utopia so I should give it up for now.

Therefore, I would say instead that social jobs like teachers, firefighters, police officers or nurses should be considered noble since they contribute to build social capital, a thing a society cannot buy merely by paying some fees. People can spend a lot of money to get the best education from the best school available anywhere around the globe, but any amount of pennies cannot save them if teachers, who on average take their job only for money, find another interesting jobs to earn a living or give up teaching the disobedients.

Consequently, “non-social job” holders should also contribute to society as well, not because they have to but more because they need to. Regular tax payment is at some point will help support social jobs and keep them exist at reasonable abundance that the social gears run smoothly.

Most of the time, the noble jobs make up their insufficient financial compensation by giving the holder an inner satisfaction anyone could not buy with money, whatever the price. That probably explains why there are always people whose jobs are helping people without thinking the reward, even the money as the well-known weakest driving force at all times.

 

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