How Do We Calculate a Just Wage?

[cynic]

Insisting on a “just wage” is like voting to eliminate cancer. Some problems can’t be solved by wishful thinking. If you think about what would happen if we were to arbitrarily raise wages - which is also what happens when the minimum wage is raised - it is that a number of jobs are simply lost to machines. Flown out of an airport in the last few years? Did you go to the counter and deal with a person - who has to be paid a just wage (plus benefits) - or did you use one of the automatic check in machines … which just requires relatively inexpensive maintenance? The same is true in grocery stores that now have automatic check out machines. All of these machines have replaced people because the machines are cheaper.

I order books for libraries. Staffing on front desks has been reduced to make way for self-issue machines. The staff got paid quite a bit more than minimum wage (over here). It has more to do with convenience for customers than wages.

In a free market, the market itself will determine the value of the work being performed and that is a value that cannot be arbitrarily set.

The market also determines wages for Asian sweatshop labour. Availability of labour is arbitrary, it does not neccessarily relate to contribution. Workers in west have used other means to secure fairer wages over the last 150 years. Perhaps unions should have been outlawed as they don’t fit the free market model.

Again you just assume that employers only act within the contraints placed on them. Big assumption. There can be lower youth rates to accomodate employing teenagers.

 

[royal_archer]

In all of this talk about the needs of the employee, where is the recognition of the problems of the employer? I think it is simply irrational to insist that all businesses who provide minimum wage, entry level jobs, should be singled out to solve the financial problems of the poor. Companies like IBM, Ford, and GE would be pretty unaffected by the imposition of “just wages” - which at this point is coming to mean simply a higher minimum wage - but what would happen to businesses like your local Burger King, Bunky’s Car Wash, and the Piggly Wiggly?

Insisting on a “just wage” is like voting to eliminate cancer. Some problems can’t be solved by wishful thinking. If you think about what would happen if we were to arbitrarily raise wages - which is also what happens when the minimum wage is raised - it is that a number of jobs are simply lost to machines. Flown out of an airport in the last few years? Did you go to the counter and deal with a person - who has to be paid a just wage (plus benefits) - or did you use one of the automatic check in machines … which just requires relatively inexpensive maintenance? The same is true in grocery stores that now have automatic check out machines. All of these machines have replaced people because the machines are cheaper.

In a free market, the market itself will determine the value of the work being performed and that is a value that cannot be arbitrarily set. Yes, there are abuses by some (probably few) employers but venial behavior on their part does not argue for foolish behavior on ours.

Ender

With on restriction on foriegn wages , raising the minimum wage will just move jobs over seas and with them the supporting middle wage and professional jobs.

 

[royal_archer]

The market also determines wages for Asian sweatshop labour. Availability of labour is arbitrary, it does not neccessarily relate to contribution. Workers in west have used other means to secure fairer wages over the last 150 years. Perhaps unions should have been outlawed as they don’t fit the free market model.

.

Unions primarily opperate under the free market except in those occasions when they resort to strong arm tactics.

 

[Ender]

I order books for libraries. Staffing on front desks has been reduced to make way for self-issue machines. The staff got paid quite a bit more than minimum wage (over here). It has more to do with convenience for customers than wages.

I have no doubt but that convenience is part of the solution; on the other hand it would be quite convenient for customers if there were double the number of staff people at the desk. For most businesses it is salaries and benefits that represent the major expense; increasing those per capita costs often results in decreasing the per capitas.

The market also determines wages for Asian sweatshop labour. Availability of labour is arbitrary, it does not neccessarily relate to contribution.

It is not merely contribution that determines the wage. If something is in short supply the price will increase; where there is a surplus the price will fall and this is as true of wages as it is of XBOX’s and oranges. In poor countries with extreme unemployment, workers will fight to get one of those “sweat shop” jobs.

Workers in west have used other means to secure fairer wages over the last 150 years. Perhaps unions should have been outlawed as they don’t fit the free market model.

Unions fit the model just fine. The problem they create is when they are given the power to distort the wages the market would normally set. This is why American auto companies are on the verge of bankruptcy. Neither side, employer or employer, should be able to take advantage of their situation.

Ender

 

[cynic]

I have no doubt but that convenience is part of the solution; on the other hand it would be quite convenient for customers if there were double the number of staff people at the desk.

And more staff also means more time managing them. As I said, people getting paid far more than minimum wage still get replaced by machines, and that’s inevitable.

It is not merely contribution that determines the wage. If something is in short supply the price will increase; where there is a surplus the price will fall and this is as true of wages as it is of XBOX’s and oranges. In poor countries with extreme unemployment, workers will fight to get one of those “sweat shop” jobs.

Thanks for the lesson but we all understand supply and demand. Multinationals could afford to pay workers in those off-shore tax havens a modest amount more, but choose not to. It just is what it is, but you talk as if there were something inherently right about it.

Unions fit the model just fine. The problem they create is when they are given the power to distort the wages the market would normally set.

“distortion” of wages, through increased bargaining power is one the primary purposes of a union. Otherwise what would be the point? Granted it can destroy when taken too far, but an employer will have (and should) have the right to fire and replace staff before it gets to that point. Up until then if may pay to negotiate instead.

 

[Ender]

Thanks for the lesson but we all understand supply and demand.

Apparently not or this discussion wouldn’t go on so long.

Multinationals could afford to pay workers in those off-shore tax havens a modest amount more, but choose not to. It just is what it is, but you talk as if there were something inherently right about it.

We started out discussing a “just wage”, not whether there were examples of unjust treatment. The concept of a just wage as far as US workers are concerned is a term completely devoid of any specific meaning. It’s like using “personhood” to describe when a human being becomes a person; it is an arbitrary term used to achieve political ends.

Ender

 

[cynic]

Apparently not or this discussion wouldn’t go on so long.

And I suppose a proper understanding would lead people to agree with you.

We started out discussing a “just wage”, not whether there were examples of unjust treatment. The concept of a just wage as far as US workers are concerned is a term completely devoid of any specific meaning. It’s like using “personhood” to describe when a human being becomes a person; it is an arbitrary term used to achieve political ends.

Ender

was the discussion limited to U.S workers?

 

[Ender]

was the discussion limited to U.S workers?

If you believe you can impose a “just wage” on the other countries of the world, go for it. That’s one way to return manufacturing jobs to the US.

Ender

 

[fultonfish]

And I suppose a proper understanding would lead people to agree with you.

was the discussion limited to U.S workers?

Valid discussion point.

We always assume the “just wage” issue applies to criticism of the United States for not paying workers enough.

And that we should raise U.S. wages.

Which results in manufacturing jobs going overseas.

So, the allegedly underpaid people become unemployed.

So, how is being unemployed better than underpaid?

It DOES benefit the Democrats and people who are agitating for political power.

But it doesn’t help the person who just wants to keep his job, save his money and buy a few things.

 

[cynic]

Valid discussion point.

We always assume the “just wage” issue applies to criticism of the United States for not paying workers enough.

And that we should raise U.S. wages.

I did not say every low wage should be raised. The question was what a “just” wage might be or the living standards it should afford someone.

Which results in manufacturing jobs going overseas.

So, the allegedly underpaid people become unemployed.

Yes and maybe the wages paid to those people are still not just, even when considering lower living costs in the third world.

 

[ipwnuathalo]

I have a related question:

If an employer has the financial ability to hire one more employee, but only at a very low wage, is it better not to hire that person (i.e. one more unemployed person) or to hire that person knowing the wage will be very low?

 

[aspawloski4th]

I have a related question:

If an employer has the financial ability to hire one more employee, but only at a very low wage, is it better not to hire that person (i.e. one more unemployed person) or to hire that person knowing the wage will be very low?

yes.

 

[ipwnuathalo]

I don’t even get a smiley face with that?

 

[Ender]

The question was what a “just” wage might be or the living standards it should afford someone.

There is simply no valid connection between the value of the work someone does and the amount of money the worker needs to establish or maintain a particular standard of living. The value of someone’s work is no more dependent on his needs than on his shoe size. It is irrational to attempt to connect the two.

Ender

 

[cynic]

There is simply no valid connection between the value of the work someone does and the amount of money the worker needs to establish or maintain a particular standard of living. The value of someone’s work is no more dependent on his needs than on his shoe size. It is irrational to attempt to connect the two.

Ender

(from earlier). In the absence of third party interference a workers pay is determined by the availability of labour. This is what you define as the “value of someone’s work”. Since there’s no relation between that and an individuals contribution to turnover, it’s possible to talk about “fairness” outside of the wages a market sets.

It’s a hypothetical discussion on what a minimum desirable standard of living could look like, considering the average standard of living.

 

[royal_archer]

There is simply no valid connection between the value of the work someone does and the amount of money the worker needs to establish or maintain a particular standard of living. The value of someone’s work is no more dependent on his needs than on his shoe size. It is irrational to attempt to connect the two.

Ender

going to the extreme cold side of the discussion consider humans are orgaic machines. who’s time you rent. Like renting a back hoe. If you need a person to do a task you have to pay the hourly rate based on what the owner/person is willing to charge based partially on the cost of that resource. If people are willing to sell themselves short, then the cost of labor goes down, if people hold themselves with higher regard, the cost of labor goes up.

 

[Ender]

(from earlier). In the absence of third party interference a workers pay is determined by the availability of labour.

Pretty much. It’s the same reason gold is more valuable than silver - supply and demand.

This is what you define as the “value of someone’s work”.

Whether it is my definition of the value of someone’s work or anyone else’s definition, the value is not in any way connected to the workers needs. The implementation of a “just wage” would force an artificial connection between two things that are otherwise completely unrelated.

Since there’s no relation between that and an individuals contribution to turnover, it’s possible to talk about “fairness” outside of the wages a market sets.

There are certainly issues of fairness in connection with employers and employees but those are issues separate from connecting the wage a person earns to the wage he (or some government entity) believes he needs.

It’s a hypothetical discussion on what a minimum desirable standard of living could look like, considering the average standard of living.

Hypothetically, if a pig had wings it could fly. The “just wage” argument is an expression of belief that the laws of economics (like the laws of physics in the case of the pigs) can be suspended.

Ender

 

[Ender]

going to the extreme cold side of the discussion consider humans are orgaic machines. who’s time you rent. Like renting a back hoe. If you need a person to do a task you have to pay the hourly rate based on what the owner/person is willing to charge based partially on the cost of that resource.

I believe this to be true. I also believe this is what offends so many people: that workers are being thought of as machines and that surely if we only thought of them as flesh and blood people we would treat them better. It is similar to why many people oppose capitalism; it is not enough that people working in their own self interest improve the lives of other people as a side effect. Apparently it only counts as good if it is directly intended.

If people are willing to sell themselves short, then the cost of labor goes down, if people hold themselves with higher regard, the cost of labor goes up.

Not exactly. If the going rate for a job is $10/hr but you regard yourself as being worth $12/hr the result will not be that the employer hires you at $12/hr but that he hires the next guy in line willing to work for $10/hr. If everyone holds out for $12/hr the employer has several possible responses:

• raise everyone’s salary to $12/hr
• hire fewer people at $12/hr
• eliminate some jobs via automation
• take his business elsewhere
• go out of business

The assumption that the employer will naturally choose the first option is not borne out by historical evidence.

Ender

 

[cynic]

Pretty much. It’s the same reason gold is more valuable than silver - supply and demand.
Whether it is my definition of the value of someone’s work or anyone else’s definition, the value is not in any way connected to the workers needs. The implementation of a “just wage” would force an artificial connection between two things that are otherwise completely unrelated.

This is a social justice forum, some people (not me) might just be assuming that employers should act in the interests of another, dependng on what they can afford, without government forcing them to.

There are certainly issues of fairness in connection with employers and employees but those are issues separate from connecting the wage a person earns to the wage he (or some government entity) believes he needs.
Hypothetically, if a pig had wings it could fly. The “just wage” argument is an expression of belief that the laws of economics (like the laws of physics in the case of the pigs) can be suspended.

Ender

Then you must believe that the wages and conditions of industrial workers in the 19th Century were by definition fair. Funny how economies didn’t collapse in the wake of the labour movement, and that’s well before they had the means to shift jobs overseas… To some extent history proves the libertarian/Adam Smith p.o.v wrong.

 

[royal_archer]

I believe this to be true. I also believe this is what offends so many people: that workers are being thought of as machines and that surely if we only thought of them as flesh and blood people we would treat them better. It is similar to why many people oppose capitalism; it is not enough that people working in their own self interest improve the lives of other people as a side effect. Apparently it only counts as good if it is directly intended.

The problem is not when a potential employer thinks of a person this way, the problem is when the person thinks of themselves in this way. But when one person devalues themself it brings down everyone.

Not exactly. If the going rate for a job is $10/hr but you regard yourself as being worth $12/hr the result will not be that the employer hires you at $12/hr but that he hires the next guy in line willing to work for $10/hr. If everyone holds out for $12/hr the employer has several possible responses:

• raise everyone’s salary to $12/hr
• hire fewer people at $12/hr
• eliminate some jobs via automation
• take his business elsewhere
• go out of business

The assumption that the employer will naturally choose the first option is not borne out by historical evidence.

Ender

Unless the person improves themself to be capable of demanding more.