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Economy Lab

Unfair pay bad for the wallet, worse for the heart Add to ...

Forget carpal tunnel and repetitive strain injuries. The new workplace health hazard may be your flimsy paycheque.

A study from the Centre for Economic Policy Research found a "strong and highly significant link" between unfair pay and adverse cardiovascular health.

Turns out a disappointing paycheque not only increases depression and general frustration, it can also take a toll on your heart, according to the report co-authored by Armin Falk of the University of Bonn and Johannes Siegrist, Ingo Menrath and Pablo Emilio Verde of Heinrich Heine University.

"The basic principal is social reciprocity," said Siegrist. "That means there is some kind of balance between give and take. If you violate this very basic principal, it evokes very strong negative emotions and also physiological reactions."

In a novel experiment, the researchers split 80 University of Bonn students in two groups. Members of the first group played the role of employees while members of the second were identified as bosses. The workers were given a stack of papers marked with ones and zeros. Their tedious task was to record the number of zeroes on each page, completing as many as possible within a 25-minute timeframe. For each correct page, they received revenue of 3 euros. Meanwhile, the bosses were sent to another room, where they were encouraged to do whatever they liked, including reading the newspaper, until the work was done.

When the time was up, employees were asked what they considered a fair rate of pay for their work. Meanwhile, the bosses divided the revenue between the workers and themselves and delivered the pay electronically.

On average, the workers identified 66 per cent of the total revenue as fair compensation. But the bosses paid out an average of just 43 per cent of revenue. Workers had four minutes to "silently cope" with their paycheques while the researchers collected data on their heart rate variability.

The Bonn experiment showed that the higher the rate of perceived unfairness, the lower the employees' heart rate variability, an early indicator of cardiovascular problems.

"It was really fascinating to see the linear relationship between the extent of perceived unfairness of pay and the heart rate variability," said Siegrist. "Of course this is not critically significant in young people. But in the long run after 20 or 30 years it becomes very clinically relevant."

Further analysis of the German Socio-Economic Panel, a survey of all Germans over 17 years of age supported their findings. After controlling for a variety of factors including age, educational background and occupational status, the authors found that respondents who described their income as unfair also reported a significantly lower health status.

Not that it's all about money. Siegrist's work has shown that job security, esteem and appreciation also contribute to an employee's perception of fairness at work. For those lowest in a company's hierarchy, security matters most, while those at the top of the hierarchy value appreciation and esteem, above all else.

"All three components are very important," he said. "If people are treated fairly, if they see the company cannot make huge profits, they would probably accept a low degree of pay because they see the employer is in a bad situation. So it also depends on the context in which the enterprise functions."


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