How should we determine wages?

[lostinacause]

There are things that determine wages that are due to the way individuals perceive work. I am wondering which ones people believe should affect the wage that people receive.

1) education
2) intelligence
3) skills/training
4) experience
5) effort
6) responsibility
7) risk
8) danger pay
9) location

I personally believe all of these are important and in determining equality schemes consideration should be taken to try to keep these wage differentials in place.

[WLKjr]

1. 1, 3, 4, 8, 9 n/t

[lostinacause]

14. why -nt

[WLKjr]

24. those are the ones that are important to me at least

I wouldn't necessarily apply it to all others though.

[Redleg]

2. You forgot to list "job performance."

Some think that job performance should influence the raise a person gets.

[lostinacause]

18. I assumed

job performance was a combination of things that I listed

[Freddie Stubbs]

25. Many people don't think that job performance should be a factor

[lostinacause]

29. And those people are wrong and most likely lazy -nt

[Freddie Stubbs]

56. Have you ever worked under a union contract?

Union contract usually have a set fomrula for pay rates, based on length of service, job function, and sometimes education. Everyone recieves the same salary increase, regardless of performance.

[lostinacause]

74. These types of contracts lead to mediocrity. -nt

[Freddie Stubbs]

79. Teachers' Unions don't seem to think to

[Redleg]

72. That's pretty judgmental.

[lostinacause]

75. There is still validity to that statement.

All other things being equal, the people who are less productive (who as a general rule don't work as hard as others) prefer to be paid based on a formula because they would be receiving money based on the total produced. Ultimately the harder working individual does not get rewarded for their effort.

[Redleg]

76. How do you know this? Have you studied work motivation and its

relation to pay?

[lostinacause]

78. I've studied piece rate systems on a theoretical level.

Also studies on piece rate systems seem to indicate that people work harder and better tend to be employed in these systems.

[Redleg]

80. Piece rates are not appropriate for all jobs or for all people.

People are also motivated to work hard by factors intrinsic to their job. Some people seek challenging jobs that permit them to exercise discretion, to use a variety of skills and abilities, to innovate, etc.

The point I am trying to make is that money is a complex motivator. There are several aspects to this:

1. Some people are sometimes willing to cut corners, cheat, and engage in other un-ethical behavior for money. Think Enron, Worldcom, G.W. Bush, etc.

2. Some people are more concerned with fair pay than with maximizing their pay. They don't want to work 60 hours per week to compete with others. They value their time away from work.

3. Some people want jobs that are enjoyable and that allow them discretion- certain types of monetary incentives can undermine intrinsic task motivation.

4. Some people value pay quite a bit- pay represents achievement for them. They may be less concerned with the type of job they do than the amount they get paid for their work.

[LiberallyInclined]

3. wages should be determined by market forces-

i.e.- how much someone is willing to pay vs. how much someone is willing to do the job for.

[denverbill]

7. If the market is truly free and fair, ok.

But not when unskilled American laborers are forced to compete for jobs with a flood of unskilled illegal aliens and/or unskilled Chinese slave labor.

[lostinacause]

30. What is a fair market? -nt

[denverbill]

65. A fair market.

One pre-condition for a fair market I already mentioned - a relative balance between labor and management. If you have 10 million unemployed unskilled workers and only 1 million available jobs, without some sort of government intervention, wages will be driven way down, below the point of a decent living wage. In that case, you either have to eliminate the excess in the labor pool (by controlling illegal immigration) or impose an artificial 'minimum wage' to balance the situation.

Another example comes when two countries compete economically. If, on the one hand, you have China, which has no minimum wage, no health insurance, no workplace safety rules, no environmental protections, etc, and they are allowed to compete directly with American industry, naturally, American industry can't compete. So you have to balance the scales by either forcing China to improve conditions for it's workers, or impose tariffs to compensate for China's unfair advantages.

In order for there to be fairness, everybody has to be playing by the same rules. Nobody would consider it a fair game if one baseball team used aluminum bats, superheavy balls when they pitched, and enormous gloves, while the other team was forced to play with whiffle ball bats and no gloves. Libertarian types tend to ignore the fact that prosperous nations have protections for their working classes, while third world countries don't. They think the US should be forced to drag it's standards down to Third World country standards, rather than the US forcing other nations to bring their standards up to ours.

[lostinacause]

68. So you’re not really talking about a fair market.

You are talking about a market with a significant amount of intervention to try to pursue certain short run ambitions of equality. Usually fair markets refer to markets where there are no abuses of market power. The wage market is generally more competitive then any other market especially for unskilled labor since firms have to compete with countless others to hire and keep workers.

I will respond to the rest when I have more time.

[denverbill]

70. Firms don't have to 'compete' when they have 100 applicants for every job.

In a tight labor market, yes, they have to compete, but that hasn't happened since Dim Son came into power 4 years ago.

Free markets will always fail unless regulated by government. Look at the US in the 19th century in the early industrial era. You can say that was all 'fair competition' and talk about how the mine owners had to compete to hire and keep workers, but the plain fact is there was such an enormous oversupply of labor and no regulation on employment so mine owners could hire 5 year old children to work for starvation wages and anyone who was unhappy could starve. Freedom to starve isn't freedom. And it's not a free market when one side is compelled to work or die. Libertarians would argue that freedom to starve to death is still freedom, but personally, I see it as more akin to the freedom Jewish people had in Nazi concentration camps.

When all of the power is in the hands of one side, the market is grossly, unfairly imbalanced. When workers finally started to get some rights (40 hour work week, right to unionize, the minimum wage, ending child labor laws, etc) the market FINALLY began to restore some balance to the equation so that workers weren't entirely at the mercy of the owners.

[Redleg]

71. Workers are competing for jobs. This exerts downward pressure on wages.

Look at the slow rate of growth in real wages over the last 20 years, especially compared to the extremely high growth in the compensation for top management. Tell me that's a labor market biased toward regular people.

[rowire]

10. Corporate Conglomerates/Monopolies Cheat

That sounds great, but we are moving towards a time where there will be very few employers consisting of huge conglomerates. They will have the ability to fix wages at levels lower than the worth of the worker. This is already happening with regards to prices. Airlines, because there are so few, are able to fix prices. Why wouldn't they do the same with wages?

[Blue Wally]

31. Airlines not really able to fix prices

That is why they are in so much trouble. They did pretty good when the government fixed prices and gave them monopo;ies on certain routes. Because the airlines cannot control prices, it is putting severe downward pressure on airline industry wages and salaries.

[Deja Q]

16. That's why millions of Americans want to become janitors, yes?

Garbage haulers too...

[LiberallyInclined]

63. they line up for the jobs.

so apparently so.

btw- what's wrong with being a garbage hauler? name one city that could survive without them...lots of exercise, you get to work outside, good pay, municipal benefits, and all-you-can-eat.

[TahitiNut]

32. So, categories of labor are commodities?

:eyes:

[lostinacause]

42. Why shouldn't they be? -nt

[TahitiNut]

46. Because it's against the law (15 USC 17) and long regarded as immoral.

It's precisely the kind of thinking that supported slavery, child labor, and forced labor camps.

That should be a big enough hint to motivate a little more investigation and introspection. :eyes:

[lostinacause]

49. Labor as a commody owned by the individual? -nt

[TahitiNut]

50. Even the phrasing of your question is reprehensible.

[lostinacause]

52. Whether you want to believe it or not labor is a

commodity. Chances are any justification that you have about labor not being a commodity is just an image.

[TahitiNut]

54. Since you resort to a personal attack, you don't read very well, do you?

TITLE 15 > CHAPTER 1 > § 17

§ 17. Antitrust laws not applicable to labor organizations

Release date: 2004-05-18

The labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.

http://assembler.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00000017----000-.html

[lostinacause]

57. Does anything in that law change the state of the world,

making it so that labor is not a commodity. Various goods have restrictions on trade. Food, medicine, drugs, sex and plutonium all have restrictions placed on them. If you want to prove that labor is not a commodity you best bet would be to look to the realms of philosophy and economics.

(There wasn't a personal attack there. If I were to attack you it would be implying that you were stupid. I would imply that this concept is so easy to understand that you would have to be stupid not to. Your misjudgment did not warrant it and I wasn't feeling particularly predatory at the time.)

[LiberallyInclined]

64. in our society? yes.

or hadn't you noticed?

:eyes:

[davekriss]

82. "wages should be determined by market forces"

No, wages should be paid according to the value add of the job. Your next question is likely to be, how is that "value add" determined? Many would answer, "market forces". My issues with this simplistic answer:

......< i > Labor is often forced to negotiate wages from a disadvantaged, asymmetrical relationship to capital. This enables an appropriation of value by capital. This disadvantage diminishes in proportion to the scarcity of labor -- e.g., if a role requires a PhD and years of experience, rare cognitive abilities, etc., and is thereby scarce compared to demand, then capital is likely to pay closer to actual value add and seek to appropriate more value elsewhere from the "value chain" in order to aggregate a sufficient return for themselves. Another leveling opportunity is gained when labor bands together in unions to negotiate as a group, which creates an artifical scarcity, or a scarcity in fact based on negotiating-equalizing political strength.

......< ii > What capital values may not be what the entire social body values. For example, capital has a penchant to support institutions that protect private property and the perogatives of their advantaged position. So lobbyist may be uniquely well paid. Politicians and beuracrats, too, as they pass through the revolving door that stands between the State and the corporate world. Yet these well paid individuals may be working at cross-purposes to the general citizenry, the latter the only source of legitimacy for the State. An end result is a tendency to socialize costs while we privitize profits. A not very fair arrangement, but arranged nevertheless.

......< iii > Along the same lines as the last point, another example is the brain-drain on PhD's toward roles where they get to think up new and clever weapons systems, from smart bombs to smart germs, that further imperialist agendas. Labor as a class does not really get to effect decisions nor reap benefits from this area, yet they get to die on the battlefields.

Basically there are two votes in America, the Dollar Vote and the Democratic Vote. Few things get on the agenda of the Democratic Vote that don't first pass the Dollar Vote. This principle operates in many ways, in many different dimensions in American life. The problem with this is that those with more dollars get to vote more than those with less, narrowing the political-economic agenda to those things that at best serve their interests and at worst have no or little impact. Not very democratic; in fact, plutocratic, which is what we have today in the U.S. To take it a step further, we have the marriage of corporate and state interests, which Mussolini defined as "fascism" more than a half century ago.

I personally view the role of the Liberal State as one where we collectively agree to establish rules of the game that create outcomes of equality, justice, freedom, fraternity, and respect. "From all according to their abilities; to all according to their needs." For all peoples, not just those with the power to appropriate value from the labor of others. But this viewpoint is 180 degrees opposite from those with their talons firmly gripped on power today. That grip will not be easily loosened. Some might say it will never be loosened without bloody revolution. And capital understands that: In our age of diminishing expectations (the approaching end of the Oil Interval), they are quietly (not so quietly anymore) ushering in the Security State, one vitally intent on preserving the advantages of the already-powerful.

Look at the militerized police in Seattle during the WTO meet in 1999, at the Miami FTAA meet in 2003, the police presence during the conventions in Boston and NYC, the barricades and snipers on the rooftops in Washington DC during the Inaugural. They're ready. Are we?

Where the law of the majority ceases to be acknowledged, there government ends; the law of the strongest takes its place, and life and property are his who can take them.
---Thomas Jefferson, to Annapolis Citizens, 1809

The illusion of freedom in America will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way, and you will see the brick wall at the back of the theatre.
--Frank Zappa, 1977

I'm the commander... see, I don't need to explain. I do not need to explain why I say things. That's the interesting thing about being the president. Maybe somebody needs to explain to me why they say something, but I don't feel like I owe anybody an explanation.
--GWB, in Bob Woodward's BUSH AT WAR, 2002

Get off the internet; I'll see you on the streets!
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[ashmanonar]

4. i don't think you can choose any of them over the other.

definitely risk. education can play a part. effort is hard to judge, (bc it's subjective) but it's bloody important. responsibility is important, but at the same time how do you pay for responsibility? location, i'd say travel pay is in order if it's too far to drive every day (bad for cars and gas).

but all of them have a place in different careers.

[Tux]

5. Should be based on

Education, skills, experience, performance, and time needed to do the job.

[guitar man]

6. base wage

base wages:

1 day's work = 1 day's food,shelter and necessities.

After that ,job performance, skills, education etc. should factor in to determine the rest.

[Lindacooks]

8. Yup, you've got it!

We HAVE to start paying people a living wage, otherwise this economy is going to sink right into the ground.

And don't believe any whining from businesses about how raising the minimum wage hurts them. It never has hurt them one tiny little bit in the history of business.

"The dominant voice of American business has predicted economic doom and mass layoffs in their consistent opposition to minimum wage increases. While none of these forecasts have come to pass when the minimum wage was increased in the past, the business lobby nonetheless remains a powerful obstacle to raising the wage floor to a decent level."

http://www.responsiblewealth.org/living_wage/

[guitar man]

11. The mantra of....

"We can't afford to pay that much" rings through the air all the time. Well, my Dad had an old saying that went "if you can't afford it, I guess you'll have to do without it." I think that should go for big business employers as well.

My new mantra is: "You can't afford to pay decent wages? Then get off your ass and do it yourself!"

[Warpy]

12. Base wage needs to be a bit more than that

It should support at least the wage earner on a "thrifty" budget, not at a sub subsistence level like now.

A person working a minimun wage job should be able to afford safe housing, food, clothing, transportation, and medical care, with enough left over for minimal discretionary spending, like a weekly trip to a neighborhood bar or movie theater, or enough that he can put it aside in a small savings account.

People who are working full time and have to live in camper shells on cinderblocks and eat Top Ramen or baloney sandwiches 3 meals a day and do without health care are being exploited and abused. We have labor laws in this country, and it's time to enforce them.

[guitar man]

13. I agree

and I count medical coverage among necessities. The only people that can effectively make sure this happens in this country are the workers themselves. We must learn to say "NO!!" to those who would exploit us,hard as it may be. No one else is going to look out for our interests.

A term I hear bandied about all too often is "Work Ethic". I think it is high time to counter that term with "Wage Ethic". What's good for the goose has to be good for the gander.

[JanMichael]

15. What about two days off a week?

Or should people work every day that they want a roof over their head?

[guitar man]

17. of course two days off

The 40 hour work week was something my union grandfather and father fought for, fought hard.

My example was meant as the most basic equation of worker's needs and rights. We have gone so far around the bend on what constitutes economic justice in this country I think we have lost sight of the basics.

[JanMichael]

20. Sorry I didn't know if you just missed mentioning it or something else.

I'm glad that you just didn't mention it.

"We have gone so far around the bend on what constitutes economic justice in this country I think we have lost sight of the basics."

Actually I don't think we have a clue as to what Economic Justice is but what do I know, I'm a Socialist at heart.

[LiberallyInclined]

84. you just don't get food, clothing or shelter for those two days?

or am i missing something in your base wage...?

[UncleSepp]

21. My back of the envelope doodlings

1 day's work =
1 day's food, shelter and necessities
+ 2/5 day's food, shelter, and necessities (weekend)
+ 1/3 day's food, shelter, and necessities (retirement savings)
+ 1/2 day's food, shelter, and necessities (child or other dependent)

So 2 7/30 of one day's cost for one day's work, untaxed. That would come out to around $10.30/hr for West Coast cities, assuming two wage earners per household, one child or other non wage earning dependent per two people, no car payment, and a 40 hour work week. The key to this is not only to require a certain minimum wage, but also not to tax income below the living wage level.

Only one day's expenses for one day's work IMO is not a real living wage, but a hand to mouth subsistence wage.

[guitar man]

22. I agree

and as I stated in an earlier post, my basic equation was just that, very basic. The fact is, too many companies these days(like Walmart) aren't even meeting the hand-to-mouth subsistence level, let alone a real living wage.

When I was running my own business back in the '90's and up through '02, the very LEAST I would pay anyone to come do anything for me was $10.00 per hour. That was for unskilled jobs, jobs requiring skilled personnel, I would pay more.

If I couldn't afford to hire anyone for the job, I would either do it myself or wait until I could afford to hire it done. Sometimes, things went undone for a while, but I never exploited anone for my personal gain.

[lostinacause]

38. By doing that you likely failed to make someone better

off who you very easily could have. Say you have the choice between paying someone $9 an hour or not hiring anyone at all. Suppose you were to hire someone at $9. By taking the job at $9 an hour the person would presumably be better off. He could have moved from a job that was paying minimum wage or from no job at all to the job you offered. Then when you could afford it you could raise the rate to $10 or higher. If you don’t hire that person he is at minimum wage or has no job. If you are faced with that choice again remember that that way you are not allowing an individual to be "exploited" as much.

[ashmanonar]

27. good estimate auntjen!

i made 9.50 an hour once...but i'm a single guy in college, and it was a temp job. no healthcare, no nothing. and it was a factory job. O.o

[lostinacause]

34. Even at a pitiful 5% interest rate and saving 1/5 you are at

an endowment point assuming a retiring age of 60. That means that they could "live for ever" and still maintain the same standard of living. I think your numbers are a little high for the retirement. Also you assume that a person will be at the minimum wage for ever.

[rowire]

9. We Should Have A Formula

Our best and brightest economist could come up with a fair formula that started with a baseline livable wage (which would take into account number of children and wage-earners in the household) and increased based on time in service and type of service provided (this is where the economist could provide some factor which accounts for education, and skill required).

It could be mandatory like the minimum wage. If you think about it, it would ensure that all working individuals were lifted out of poverty.

[lostinacause]

19. Just tie it into the consumer price index (inflation) nt

[Nikia]

23. Unfortunately, it really isn't based on those things

It is based on these questions: How much do we need to pay you to keep you here? related to the question How much would another company pay you? and How much would we need to pay someone if you left?
You are paid based on your replacement value.
Some jobs would hire almost anyone if there were not several people applying. These jobs tend to pay at or near minimum wage.
The criteria that you list lower the number of potential candidates for the job. Once a candidate is hired, they may be given substantial raises if they are deemed valuable to the company.
I know that I am paid just enough to keep me there. I have a 4 year degree from a good college, intelligence, every skill I need to perform a similiar job, all the experience that I need to perform a similiar job, all the effort that is needed, and a lot of responsibility. They pay me just above what other advertised similiar jobs pay though.

[davekriss]

83. That really is just the mechanics of determining...

...the mechanics of determining market value. And it matches my understanding of how wages are determined "inside" businesses. The premium you are paid over the mean established by surveys such as are available from companies like the Hay Group often factors in things like search-time (candidate recruiting), recruiting fees, training and acculturation time, and job-specific ramp-up time, so the premium can be significant even at firms were a highly algorithmic approach is taken to set salary bands.

[qwghlmian]

26. I don't quite understand the "we" part in your question

are you running a company? Are you determining the wages for people? If not, why does the question have the "we" in it?

[lostinacause]

28. The "we" refers to general policy decission -nt

[qwghlmian]

35. What policy is it, exactly?

I don't see how "we" set the policy that determines how much the owner of the garage down the street pays his mechanics. He decides it, and "we" (I, or you) are not involved in that decision. So, asking the question of "how should we set the wages" is a bit presumptuous. First get into the position where you actually set someone's wages, then ask the question.

[lostinacause]

41. If you think about it a little you will realize that there is something

all of those have in common. I will even give you a hint; there is a place that's in the middle of no where trade's people can make $100,000 salaries.

[qwghlmian]

43. I could not parse your statement.

This is not about people's salaries. This is about the absurdity of discussing how "we" should set the wages when "we" do not set the wages of anyone.

[lostinacause]

44. What is a minimum wage?

What is a union? Through policy you could make it so that wages are based on any one of these if you are willing to accept huge deadweight losses. The significance of all of these are that they are what wages are based on in a perfect market for labor. For the most part wages are based on this in an imperfect market for labor.

[qwghlmian]

45. If forcing people who actually

do get to "set wages" to set them higher than they want to set them is so successful, let's set all the wages in the country to a minimum of $100/hr. Think of how prosperous we will all become.

Hell, why have the "market" at all. Let's have a law that sets the salaries for every profession out there. This "market" thing is so inefficient. Think of the boon to the economy if we eliminate it.

[lostinacause]

47. I said deadweight loss. Anyone who understands the concept

of deadweight losses also understands what limits production. I also never said that anyone would be better off because of the wage controls. You for some reason seem to believe that I want to limit or control wages because of what I have said. If that is the case then you assumed wrong. I am just presenting a way of viewing wage differentials.

[lostinacause]

48. And I do run a company. I've been running it since I was 16 -nt

[qwghlmian]

51. Ok - then let's discuss how you

set the wages in your company. Not "we". Please explain your rationale when you decide how much to pay someone.

[lostinacause]

53. I set them based on the market. The market

is based on the regulatory system. The regulatory system is based on politics. “The people” make the decisions on politics. “We” is appropriate.

[qwghlmian]

55. You decide them based on the market?

Perish the thought. You mean you do not base the wages on the worker's needs, but on the market price for his labor?

So - what would you do if you knew that the worker has 8 kids and needs at least $60K/year to support them, but the "market" says that his salary should be $30K/year?

[lostinacause]

58. That is beyond my realm of control.

The role of government policy is to either deal or fail to deal with that situation in the way judged to be in the public’s best interest.

[Redleg]

73. Market rates are not the only consideration one should make

when setting wages. Employers need to be concerned with the internal equity of their pay as well as the external market rates.

I don't get what you mean by "the market is based on the regulatory system."

[lostinacause]

77. Internal equity is more of an issue of workplace politics.

If you pay offer one person too high of a wage by mistake but it is not worth letting them go you do not have to hold anyone else to that standard. The same goes for someone who accepts a low wage.

The way the market the market functions depends upon the way the regulatory system is based. Comparing the two markets for drugs, one functions like a monopoly and the other like perfect competition.

[Redleg]

81. I mean equity in the sense of how employers evaluate the

compensable factors in a job (position) to determine its relative worth to the company.

[DU GrovelBot]

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[libodem]

36. longevity

which kinda goes along with experience. I think something can be said for loyalty for staying on. I find that people hired after me are being paid more, to start, than I make after 10 years. I also think there might be something to a different minimum wage for teenagers who live at home.

[lostinacause]

39. Then students who stay at home will become more attractive

to hire resulting in more low income workers loosing their jobs.

[TahitiNut]

37. The mean Net Income/Employee (ttm) of S&P500 companies is $94,490.

Assuming the average compensation (wages and benefits) is $45,000, each employee is being compensated less than 1/3 of the value of their labor, discounting the ownership "vigorish". "Net Income" is calculated subsequent to all operational expenses, including labor and cost of goods sold.

The question becomes one of the proportional and equitable division of compensation between labor and ownership, and the distribution of compensation whcih might be measured by a Gini Coefficient.

One thing is for damned sure, paying CEOs over 500 times as much as the average employee is a gross obscenity under any circumstances.

[ultraist]

40. Minimum wage should be $13 per hour

I base this on the economic theory that min wage should be 60% of the median income, which currently is around $43,000 nationally. It should be adjusted up-wards in states with a higher than nat'l average cost of living.

The valuation of jobs in this country is based on an elitist system and is inherently classist and racist. Those who did not have access to college or limited access are labeled "blue collar" or unskilled laborers and paid significantly less. WTF is unskilled labor? Any labor requires some skill and it is extremely hard work and that line of work has a shorter life span (older people can not do this type of work). Sitting behind a desk and raking in 20 million as a CEO is obscene. NO ONE is that indispensable or worth that much while the company laborers are being exploited.

Certainly, someone who invests 14-17 years in upper education should earn more, but the gaps are far too wide. White collar "professional" skills are overvalued and the door is kept only cracked intentionally to cut back on competition for salaries.

[datasuspect]

60. the funny part is

that in the current economy, even people with educational credentials are having a rough go.

in complete agreement regarding ceo pay.

[RPM]

59. Demand should be factored in...

Those are important consdierations, but at the end of the day, demand has to fit in somewhere.

I don't think that a highly educated, intelligent, well trained, experienced person performing a risky and dangerous job should be well paid unless there is some measurable demand for the service being performed. E.g. I could be the best mashed potato sculptor, but if no one wants mashed potato sculptures, I shouldnt make as much money as someone who is making stone sculptures...

[inslee08]

61. Yes. There is definitely something to be said

for market conditions/supply and demand. That's how (sometimes unfairly) capitalism works.

[lostinacause]

62. Supply and demand is what keeps everything in check

For the most part if people are given a similar job they will take the one that is higher paying. All of these concepts generally fit in because they either determine supply of or demand for labor.

[fat free goodness]

66. How we do it.

Running a company, I try to base pay on what the person is worth to us. We should make more from them here than we pay them, but they should be paid as much as possible while keeping that true.
I have given raises of over 100% in a year to people who prove value.
With some jobs this is easy to determine, with other jobs it’s harder. The going market rate for the job is a good data point if it’s hard to estimate worth, but I’m willing to pay much more than average if we still make money off the person. After all, they might be much better than the average person in the job. And turnover costs money – if I pay the same as everyone else, why would I expect them to have any particular loyalty?
Education, intelligence, experience, and skills/training are only indicators of how well someone may do. Effort is probably going to be far more important (assuming at least basic competence), but is harder to gauge when hiring.
More responsibility deserves more pay because of the greater risk, and more dependence on the person.
Danger pay is irrelevant in my company (no danger), but this goes along with any other risk. The greater the risk, the greater the compensation required to make it attractive. Our company sets prices for what we do the say way. If there is a great risk (say, a large penalty for being late on the project and a tight deadline) we charge more.
We do not specifically adjust for location, but if a location is higher cost the sales (and thus profits) are probably higher as well, which leads to better pay. If the costs are higher and bigger profits are not possible, we aren’t there anyway.

[ObaMania]

67. all and none

While all those items are important in determining wages, I think the main thing should be to make it fair and equitable.

IMO, no one job is more important than the other. Sure, there are different levels of responsibilities, but everyone plays an important part in getting the job done.

I don't think that a President or CEO should make 10-100 times the highest paid "regular" salary just because of their position. ex. $100,000 to the employee's $30,000 seems fair to me. 1M, 30M to me is outrageous! These people like to think they are worth that much, but really, what makes them that much more important or worth more than say, a burger flipper? What should Crashcart continue to make a fortune from Halliburton long after he left his Government thieving post there?

As far as * saying there are jobs that 'muricans won't do.. it's not that they won't, it's they can't afford to. That's where the fairness thing comes in. A fair wage for a hard day's work and at the very least, living wages for all!

I think that we all play important working roles in society and to have such disproportionate salaries creates classes which is not healthy for quality of life, either at home or work or society as a whole.

The Re :puke: 's like it this way and would like to continue to keep people down, but let's face it, in the * economy, even the most highly skilled, educated, intellegent, experienced person may find their ass out on the street as a result of exporting all good paying jobs overseas. Then they'd be in a position where all the items you listed aren't going to do a damn thing for them when faced with having to take anything to keep a roof over their heads and food on the table.

/end of incoherent ramblings ;)

[TahitiNut]

69. Labor and Capitalism (Ownership of the Means of Production)

I'll offer some "food for thought" in this post, hopefully encouraging the abandonment of some mental ruts and offering some perspectives sadly not yet evident in this thread. There's an enormous "body of knowledge" that wrestles with the confluence of issues regarding labor and its valuation, not the least of which is Adam Smith's "Labor Theory of Value." I won't even pretend a comprehensive expertise in these areas; I'll merely attempt to drop some torpedoes in the water of this discussion so the junks are sunk.

Labor as a Commodity
There are those who (whether consciously or unconsciously) condone (mostly from a utilitarian ethical posture) treatment of a human being's labor as a commodity, despite the fact that such treatment is unlawful in the US (and most western nations) and unethical/immoral under any prevalent theory of justice in any democratic nation that accommodates capitalism.

To treat human labor as a commodity (with a standardized trade value independent of source) is to ignore its unique character. First and foremost, its existence is uniquely dependent upon the physical presence (either proximate or Waldo'd) of the human and the property with which it is "mingled." Labor per se is not transportable independent of the human being that's its "means of production." Thus, to "own" such labor one must "own" (either directly or derivatively) the human being from which it is "mined." While most have no difficulty claiming that the human being "owns" (has exclusive rights to) his or her own labor, the commoditization of labor unavoidably necessitates an "ownership" which is inseparable from the "ownership" of the laborer.

While there are many other very real considerations, including the unavoidable "domesticated livestock" treatment of human beings (i.e. labor is the same as milk or wool or hog bellies), the above consideration is foremost and unavoidable imho. To regard labor as a commodity in a capitalist context inexorably results in slavery (ownership of the human being) and the ultimately total devaluation of human life independent of its productive (i.e. market) "value" to others.

The "Value" of Labor
The inclination to 'value' labor according to some specious (commoditized) market value ignores and devalues the alternative use of the "means of production," i.e. the laborer (human being) himself or herself. The choice of each human being to apply his or her time and energy towards laboring (based on some value to another) as opposed to engaging in activities of value to him or herself becomes critical in managing labor "availability." In the Garden of Eden (where there was no illness, disability, sloth, greed, or scarcity), labor had no "market value." Thus, to create "market value," it was necessary to first create illness, disability, sloth, greed, and scarcity. That was the serpent's job. He did it very effectively.

Therefore, to reduce the "market value" of labor, it is necessary to reduce the value and availability of alternative activities and heighten the existence of illness, disability, sloth, greed, and (especially) scarcity. Labor becomes cheap when individual survival itself is threatened - euphemistically called a "standard of living."

The "Compensation" of Labor
It is with some chagrin that I see in the Original Message a one-sided (not even "fair and balanced") utilitarian set of criteria upon which compensation is derived. In other words, it's solely based on the utilitarian 'value' to some recipient and not at all based on any assessment of 'value' of that which is sacrificed by the "producer" of labor: the worker. What's the 'value' to a buyer/employer of the seller/worker's sleep? the seller/worker's quality time with children? the seller/worker's conjugal relationships? the seller/worker's recreation? the seller/worker's spiritual nuturance? Zilch. Nada. Nothing.

Yet those endeavors are what are being sacrificed by the human being in offering his or her labor. Where's the "compensation" for their loss?

What we also seem to ignore when we speak in terms of the minimal individual necessities of food, shelter, clothing, and health care is the commoditization of those very things - particularly health care. In arguing for minimal "compensation" of labor in terms of such goods and services, we must foresee the achievement of some stabilization where the increased "cost" of those goods and services due to the same labor "compensation" theory achieves equity. The basic problem here is the profit slice in such costs. Health care costs are burdened with a 50% 'profit' overhead. Food and clothing costs are depressed by labor exploitation and commensurate profiteering. The complex systemic (predatory) relationship between labor, profit, and cost must be considered - since their use as a basis for compensation isn't immutable.

Balance of Supply and Demand in a "Free Market"
It is axiomatic that a (theoretical) "free market" seeks a price stabilization point where some demand is not met - where some buyers are priced out of the market and their "demand" is unmet. This is the stabilization between market price and productive capacity - the price will always rise to the point that it is not economically prudent to create incremental productive capacity.

This is why agricultural subsidies make sense to a large extent. It creates an artificial (not "free market") demand that motivates the incremental productive capacity such that supply exceeds demand and those priced out of the market (means testing) are, through the non-capitalistic forces in society, fed. The same rationale exists for housing. Capitalism unalloyed with such "socialism" is doomed to destroy the very society in which it becomes the unbalanced force.

But what about labor? Using the morally bankrupt commodity paradigm, where is the societal "artificial demand" for labor that both ensures an adequate supply and permits a 'cost' that matches value? During the Great Depression, the government became an "employer of last resort" through both public works projects and the Civilian Conservation Corps. Our national recognition of the innate 'value' of one another was manifest in such works.

In neoKonservative AmeriKa, that "demand" is solely militaristic - a social force channeled into conquest and profiteering (on steroids). The historical revisionists proclaim the fiction that only WW2 extricated us from the Great Depression - glossing over the inherent theme of 'demand.'

Think about it.

The Enterprise-centric Mentality
We have been mentally seduced (by the politics of scarcity) into thinking that Enterprise is the sole valid perspective when entertaining questions of Value, Ethics, and Justice. Enterprise is vested with concrete permanence and society (human beings) as subsidiary and mutable. Rather than viewing collaborative human activities as primarily serving the participants, the participants are artificially segregated into warring classes surrendering their own welfare to serving the profiteering interests of owners. Just as a mental exercise, how would it be different if the workers within any company were, by law, the equal "owners" of 75% of the company? (Don't think about "how to get there" - just think about how it would be different.) Remember, "capitalism" was originally about a private (not monarchical) ownership of the means of production - allowing what we now call owner-operator businesses (not indolent and titled ownership).