Of Paychecks and Pecking Orders

In a recent NY Times column, Robert Frank schools us on social transitivity, noting that some people can’t be better at something unless other people are worse at it. His core argument is that paying mediocre performers is necessary to keep them around so that outstanding performers won’t feel average.

He asserts that this is a type of tax and that it’s progressive.  He goes on to argue that because we put up with this sort of thing in the (relatively) free market, we shouldn’t fuss over progressive taxation.

I am not the kind of guy who easily equates personal excellence to a tax on mediocrity. And the linchpin of his argument is that social transivity is “progressive”… which is not at all obvious to me.

But Frank does make a point with which I agree: people care about an awful lot more than money.

One answer is that these employees may care, often subconsciously, about things besides pay. The most productive workers in a group, for example, often appear to value their status, perhaps because they enjoy greater self-esteem and respect than the least productive workers.

Just another reminder that financial incentives, although important, are not the sole driver of better behavior in health care.

(Note: this entry originally appeared at consumerology.com)

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