IEA Head of Political Economy Kristian Niemietz has written in The Telegraph arguing that a functioning labour market can determine how much healthcare workers should be paid far better than centrally planned pay scales.

Kristian wrote:

“We would not debate the pay of other professions in this way. We do not have political arguments about whether plumbers, electricians, painters, decorators, or fitness trainers are paid ‘the right amount’, or whether they ‘deserve’ more. We do not have a Secretary of State negotiating with a ‘British Plumbing Association’ or a ‘British Electrical Association’. 

“Members of these professions are simply paid whatever the market will bear. If there is unmet demand, either in general, or in specific parts of the country, or at specific times, or for specific services – they can ask for higher rates, and they will get them. Where demand is saturated, pay rates will stagnate, or even fall. This is the only sensible way to work out who should earn how much for doing what.

“Apart from balancing supply and demand, a medical labour market would take a lot of the poisonous politics out of medical employment. In the current system, these matters inevitably get politicised. At the moment, doctors are in a stronger position, for the simple reason that the government is unpopular, and that when push comes to shove, the public will side with doctors, not politicians.

“If we do not want key decisions in healthcare to depend on such political whims of the moment, we need to replace the politics with a market mechanism.”

Read Kristian’s full article here.