Paying peanuts for passion🍋
Underinvesting in the Social Investment Board
“Follow your passion”. That’s pretty much the universal career advice nowadays. But it comes with a rarely voiced kicker — if you choose a career in which passion-fueled supply exceeds demand, then don’t expect to be well paid.
I’ve seen this play out for my friends and family members who’ve chosen a career in conservation management. Job openings are scarce, highly contested, and get filled by passionate people who, on paper, are overqualified for the role.
This works to the advantage of employers — their employees are better qualified and their wages bill is lower than it would be otherwise. And lower wages have a further benefit from the employer’s perspective — they tend to screen out people without passion for the cause. That can benefit employees too, as they are pretty much guaranteed to work alongside other passionate people. It’s a win-win all round, at least until some employees decide they really would like to own a house, raise kids, or pursue other goals that require a more “normal” income.1
While the situation in conservation is bad, in my experience it is even worse in social services. While working on the Productivity Commission’s More effective social services inquiry I met many passionate people. They had two near-universal complaints — the social services system was failing, and they were underpaid.
The inquiry agreed with the former complaint, concluding that New Zealand’s social services were neither effective nor efficient, and that a different approach was warranted, especially for those in greatest need. Or, in the Commission’s words:
Some New Zealanders are particularly disadvantaged. The Commission has come to the view in this inquiry that the current system is not working at all well for these people. The Commission believes that a different approach is needed to support them to improve their lives. To not change could condemn them and their children to a continuing poor quality of life, and continue to inflict large costs on the rest of society through both negative impacts on others and the high costs of government services that “pick up the pieces”.2
Passion wasn’t the answer — it was already in plentiful supply. What was needed was a more hard-headed approach. The then emerging field of social investment epitomized that approach. According to the Treasury:
Social investment is about improving the lives of New Zealanders by applying rigorous and evidence-based investment practices to social services.
Rigorous and evidence-based investment practices require taking a step back and a certain level of dispassion. Passion without these skills likely leads to throwing resources at the most heart-wringing cases; it takes some dispassion to ignore the most salient pleas and allocate resources to where they will do the most good.
Wanted: dispassionate skilled people willing to work for peanuts
It’s not inherently unfair to pay lower wages for jobs that applicants are passionate about, just as it’s not inherently unfair to pay higher wages for jobs that are unattractive because they are unpleasant or unsafe. But passion wages create a problem for employers if they seek skills that attract high remuneration elsewhere, and those skills are not well correlated with passion.
The Ministry of Business, Innovation & Employment (MBIE) is currently advertising for a chair and 6 to 8 members for the Social Investment Board. The board is an important cog in the Government’s wider social investment approach:
The Social Investment Board will provide advice and assurance to the Minister for Social Investment, and guidance to the Social Investment Agency on the development and implementation of social investment.
MBIE is expecting a lot of board members, including the ability to be dispassionate. The job description includes, for example:
Act with a high degree of professionalism … Strong understanding of social investment, public finance and/or commissioning models … Extensive understanding of how to contract for social outcomes … Commitment to the use of data and evidence to inform service design, delivery and evaluation … A high degree of analytical ability … reason objectively, convey ideas accurately
These skills are in short supply and high demand.
What is the renumeration offered for such professionalism and skills? Just $65/hour for board members, and a bit more for the chair. If that sounds reasonable, remember that this hourly rate does not include any of the things that normally come with employment — holiday pay, sick pay, KiwiSaver, ACC, job security, ongoing training, an office, a computer, job security, etc.3
MBIE expects board members to work five days per month.4 Three such board positions would constitute a full-time load. The equivalent full-time salary, after expenses, would be of the order of $70k per year. This is below the range for a junior MBIE policy analyst recruited straight out of university.5
The board is expected to guide senior public servants and ministers, some of whom are paid at rates approaching that of the whole board.
You can’t get there from here
The Government is expecting much from its social investment approach. But I don’t think it will get there by paying peanuts for passion. Social investment will fail without hard heads to guide it.
For those with independent means, or not otherwise discouraged by this post, applications are open until 11 August.
By Dave Heatley
Under these conditions, employers can exploit worker passions, knowing that their employees can be easily and cheaply replaced. See, for example, Amnesty International has toxic working culture, report finds.
Being on a government board also comes with a level of reputational risk out of proportion to the remuneration typically offered.
Five days a month isn’t a lot to keep on top of this technically and institutionally challenging subject. Passionate and dedicated board members may find themselves working outside the hours they are paid for.
A policy advisor job currently advertised by MBIE offers a “salary range $75,114 - $93,724 p.a. plus Kiwisaver and Wellness Benefits”.
The inevitable result of paying peanuts is to end up with adversely selected simians.
The problem I have with what I understand by social investment is that if carried to its extreme - targetting the most disadvantaged - it is somewhat utopianr, something it shares with the opposite extreme on the left, Univeral Basic Income. Either of these policy interventions proposed by right and left respectively if pushed to the extreme would require the dismantling of the welfare state and probably would not "work" anyway.
I am a quantitative social scientist and very much committed to the efficient functioning of the public sector and to rigorous evaluation, but it has to be realistic. Individuals live in a context so, yes, focus on them in their early years - but what about their (possibly dysfunctional) family, the standard of living and life style in the home, the quality of the neighbourhood facilities, and the adequacy of the school - just for starters! We have seen a halt to social housing construction, the police will no longer attend family harm events, we are in recessionary times, and according to some the educational system is sub par. So, the indications for success without those contextual enablers are not good!
Recently I was privy to a marvellously detailed and precise presentation of an evaluation of what I think has been the only fully effective social investment bond-funded intervention where an existing NGO-led programme for young offenders was enhanced - and produced better results. But parenthetically we need to know that Oranga Tamarki had to set aside $24 million in its budget for this intervention, and the changes suggested by the funders were actually refinements of what was already in the programme - but longer and more intense. So, yes, it was a worthwhile trial, but it suggested that do the job properly with young offenders we have to spend more. And I am not aware of whether this has been taken up. Given the cutbacks in government expenditure, this seems unlikely.
As I say, I am a quant, I am an evaluator, and I believe that the public sector needs to prove itself and stand up to scrutiny. But can this be done objectively and effectively if there is a strong ideological agenda and the drum beat of tax cuts and cost containment? I am sceptical.