There is a story doing the rounds that bankers’ pay needs to be increased or else we will lose these geniuses to bigger banks elsewhere.
There is an important distinction between value creation and value extraction.
In recent times this distinction has become even more confusing. We are told Ireland’s growth rate is as good as the boom times yet the citizenry are not feeling it — Why?
Wealth siphoning has become a major problem for the Irish — and indeed the British and the American economies. The wealth makers are not getting due recognition and just rewards, whilst the wealth takers are erroneously seen as being productive.
We are all wealth creators in the daily tasks that we do. Whether it is the stay-at-home parent minding their children or the volunteers that keep community-based organisations going or those who are in paid work at various levels of the labour market. Executive pay needs to be linked to those on the shop floor. Otherwise they are simply extracting the wealth that has been created by others.
As long as we continue to elect politicians who can’t understand the difference, rising inequality will continue unabated.
Dr Colette Finn