We need to reward those that provide the most value

Would you be happy if you worked twice as hard as a colleague but got the same pay? I am willing to bet that you would expect to be paid more.

Well, that’s obvious you say. Of course it is. And if you are paid more than your colleague, you’ve just created more inequality. But that’s a good thing, isn’t it? Don’t you deserve more for putting in the extra work?

The Plumber Example

Let’s take another simple example? A water pipe burst in your home and you need a plumber. Fast. You phone a friend and ask for a recommendation. She says she knows of two plumbers in your area, both of which she’s used personally.

She says one plumber provides excellent service, does a first-class job, and charges $100 an hour.

When she hired the second plumber, he turned up late, didn’t do a great job, and left the place a mess. He only charged $80 an hour.

Which plumber do you choose? I think most sensible people would charge the first plumber. Again, you’re creating inequality. The excellent plumber will already be earning more than the not-so-great plumber. You’re adding to that inequality. If you want more equality, shouldn’t you be helping up the poorer plumber?

The Book Example

You need a great book to read, so you head to Amazon to choose one. You love Stephen King, so check out a few of his books. You also take a look at some of Amazon’s suggestions for other great books. While you’re browsing, you also spot a few books that have 1-star reviews and seem to be pretty bad.

Which book do you choose? Again, I bet you chose one of the top authors with 4 or 5-star reviews? Again, you’re making the inequality worse between the top and bottom writers. If you wanted more equality, you’d buy some books from the worst writers so that they could earn a little extra.

Isn’t this Absurd?

You may think I’m just being absurd. Of course, everyone wants to hire the best plumber and read the best books. What the hell has that got to do with inequality?

It’s got a lot to do with it. It’s the whole reason inequality exists. We hire the best plumber because he offers the best value. This encourages other plumbers to also provide great value. By doing that, they can also get a greater share of the money. If we paid all plumbers the same amount, they wouldn’t have an incentive to improve.

This is the same across all industries. We pay more for the best because we want the best.

What’s absurd is expecting people that offer lower value to be paid a similar amount to those that offer higher value.

We are all free to improve ourselves. If we do that we can offer more value to others and they will pay us more money for that.

Medium Writers

Do you think all writers on Medium should be paid a flat rate? That would probably be around $20 each if the pot was shared among all writers.

What would that do? The great writers would leave because they’re not going to be working for $20 a month. Only the worst writers would remain. Then the readers would all leave. Do you see where this is going? So the top writers need to be paid more. Isn’t that obvious. But that creates inequality. The top writers earn $10,000+ a month, while the bottom writers earn less than $1 a month.

But that’s how it should be. Those of us that want to earn more can put in more work and try to improve our writing. Of course, we should be rewarded for that.

So isn’t inequality inevitable? And isn’t it a good thing?

There are Exceptions

Before you all say it, yes there are exceptions. What I’ve written above are the general rules of the game. There are always exceptions. Some people can’t earn much due to no fault of their own. We should help those people.

What we shouldn’t do is complain that those that put in less effort deserve more. We get from life what we put into it.

One Final Point

It’s usually people in Western countries that complain the most about inequality. If you really want equality, you should give away half of what you earn and own to people in poorer countries. Isn’t that true equality.

Most that complain are just jealous that some others earn more. I never hear them mention all the billions that earn less.

Whatever you earn, have some gratitude. Help the billions that are worse off than you instead of complaining about the few that are better off.