When a high salary is right in our age of austerity
By Michael Skapinker
Published: July 16 2010 23:34 | Last updated: July 16 2010 23:34
It was a classic British tabloid storm. A story broke of a public servant receiving an exorbitant salary. Trade unions voiced fury at how much more he earned than their struggling members. The government, learning that the miscreant took home more than the prime minister, promised to put a stop to it. Reporters went in search of outraged quotes from members of the public.
There was a twist, however. The alleged fat cat was not a member of parliament or a government mandarin but a primary school headteacher.
“Parents and teachers spoke of their shock and anger last night,” said the Daily Express at the revelation this week that Mark Elms, head of Tidemill primary school in Lewisham, south London, earned £276,523 last year. “I was very shocked when I heard how much he gets paid,” said Adriana Patino, a school parent.
Then the story departed even further from the usual script. Other parents refused to be shocked. “I think he’s worth a whole lot more,” one told Metro, the London freesheet. “He’s excellent,” Jodie Golding, another local mother, told The Sun.
In this time of austerity how much top people earn, whether in the private or public sector, has been a source of furious controversy worldwide. The European parliament this month approved tough new rules on bankers’ bonuses. Bankers’ pay has been heavily criticised by Angela Merkel, Germany’s chancellor, and Nicolas Sarkozy, the French president. Lloyd Blankfein, head of Goldman Sachs, has conceded that much of the anger was “understandable and appropriate” and Richard Lambert, director-general of the CBI, the British employers’ organisation, warned that highly paid executives risked being seen as “aliens” by an angry public.
With civil servants facing pay freezes or skimpy rises, there is little tolerance either for top public officials earning large amounts. So, why have the tabloids struggled to whip up much of a storm over Mr Elms?
When people complain of the unfairness of top people’s pay, they generally feel aggrieved by two things. The first is that so many of the highest earners do not seem worth it. Those millions in salary and bonuses paid at financial institutions that collapsed came to be seen as rewards for failure. Hence the anger over the large pension paid to Sir Fred Goodwin, ousted chief executive of the Royal Bank of Scotland, or the $480m that Richard Fuld took home over eight years as head of Lehman Brothers.
As a headteacher, by contrast, Mr Elms is no failure. Tidemill is a difficult school. When he took over in 2001, it was in “special measures” – official jargon for “failing”. A high proportion of pupils come from non-English-speaking homes. Much of the student body is transient. The number with learning difficulties is above average.
Yet the advances children have made under Mr Elms’s leadership are astonishing. Arriving with well below par academic skills, they now leave matching the national averages in English and mathematics and exceeding them in science. In its most recent report, in 2008, Ofsted, the inspection service, paid tribute to “the outstanding social and emotional development of pupils [which] results in a happy community”.
The inspectors called the school “outstanding” and awarded the same accolade, its highest, to Mr Elms. “He is experienced, enthusiastic and innovative,” Ofsted said. No wonder those parents could not bring themselves to criticise him.
The second source of so much dissatisfaction with high earners, even when they are successful, is how much more they take home than those they lead. In the UK, chief executives of the 100 largest companies last year earned 81 times more than the average of all full-time employees, according to Incomes Data Services. In the US, corporate leaders earned 319 times more than the average worker in 2008 (although this was down from 525 times in 2000), the AFL-CIO trade union federation said.
To many, this is what really rankles. Admittedly, company bosses lead stressful lives. They are subject to constant public scrutiny, have to spend evenings and weekends at corporate events, and struggle to spend time with their families. But it is hard to argue that their contribution is that many multiples more important than that of their junior colleagues.
How much more did Mr Elms earn than his teaching staff? First, you need to deconstruct the figure that appeared in the press this week. His basic annual salary is £82,700. That is a little over three times what a newly qualified central London teacher earns. Much of the rest of his pay was earned over two years rather than one. A large amount of it came from his work on a programme in which he helped other poorly performing schools. Given his exceptional performance, this hardly seems excessive.
Still, Michael Gove, the education secretary, has declared that no headteacher should earn more than the prime minister’s £142,500. But why not? The premier’s current salary is only a down payment on his earning power once he leaves office. There are all those paid speaking engagements, to come, as well as directorships. None of that is available to the retiring headteacher.
Second, David Cameron has been in office only since May. He has yet to prove that he can be even fractionally as effective as Mr Elms or provide anything like the headteacher’s return on taxpayers’ investment.
Think of all those once underperforming pupils that Mr Elms has almost certainly set on a path to productive employment rather than the dole, to contributing to the community rather than being a nuisance to it. The question should not be whether Mr Elms is paid too much but where, at that price, we can find a lot more like him.
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