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Should school teachers be paid as much as football managers?

According to researchers at Harvard Business School (HBR Ideacast 207), the real value of a college football coach (who often gets paid several million dollars a year), is only about $400k. This is calculated by looking at the real value of their work using economic principles (i.e. allowing for the effect of other people/factors in contributing to the success of the team).

Similarly, a Kindergarten school teacher should be making $320k (a lot more than they actually do, I assume…). This is because it has been found that each 1% improvement in performance of the children results in a $1,000 a year increase in their income as adults.

The economics and pay of American football coaches is very similar to that of football managers in the UK and Europe, I am sure. I would guess that Kindergarten teachers make similar money to pre-school and primary teachers in the UK.

A quick search of Google reveals quite a lot of material similar to this.  (My profession doesn’t come out of this too well, I’m afraid.)

There are a lot of myths about pay and reward that aren’t obvious until you go beneath the surface and look at the real economic, social and environmental factors. Another reason why the accountancy profession must develop beyond pure financial number-crunching using traditional methods, if we are to add real value.

What do you think you are really worth?

3 Responses to “Should school teachers be paid as much as football managers?”

  1. Andy H says:

    I think this analysis, whilst interesting misses a very important point. In a free market economy, there are more elements to what make up rewards.

    Have you considered that there are more schools then (topflight) football clubs? If you expand this out correctly, you should compare the wages of like for like.

    For example, should we not consider the wages of a Premier League manager with a private school headmaster. (this would more likely be more consistent). Do lower league managers earn the same as teachers? You may find that this starts to go the other way fairly quickly when you reach the low divisions.

    Finally, if you base this on true market conditions without Governmental interference, then people are worth what the market will pay. If you try to manipulate this, then the system eventually breaks, as people are not truly motivated.

  2. I had a look at the report and I am not sure they have factored in the value of the busines owner re-investing tax savings into the development of the business.

  3. Andrew Gray says:

    Thanks Bob and Andy for your posts.

    I don’t know if you managed to listed to the HBR Idea(pod)cast that inspired my blog post, but it does much better justice to the theory than I have.

    Andy- I agree that scarcity of resources (ie the small number of top football managers) is a key factor. Although, I guess the fact that there are so many teachers means that they can reach and affect many more other people?

    I guess the main message for me from this is that the person(s) who decides on what others get paid (including the government in many cases) will base the pay on their own economic situation (and political aims) and not on what will benefit the economy or society as a whole.

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