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Well considering worldwide women still make 77 cents to the dollar men make isn't it reasonable to assume most employers ARE bad? If most employers were good, decent, honest people than would it not make sense that women would be making the same as men?
Evil employers are hardly the reason women make less than men overall. The reasons are far more complex than that, and have a lot to do with the fact that most women are the caretakers of the children, and their career choices reflect that. They also tend to take large chunks of time out of their careers to stay at home and care for their children.
Well considering worldwide women still make 77 cents to the dollar men make isn't it reasonable to assume most employers ARE bad? If most employers were good, decent, honest people than would it not make sense that women would be making the same as men?
What I've found is that in general, those situations do not lower the "market value". Those people usually demand raises if they've been duped - and knowing the overall market the employer gives in rather than depending on finding another ignorant employee to dupe.
I worked as a welder for a while - cosmetic work on furniture, not certified. The offered pay was $7.50/hour - this was in the 1990's when that was ok pay for a commonly held skill. I knew I was worth more than that and asked them for $10. It was $7.50, take it or leave it - because guys who could stick steel together with a MIG are a dime a dozen - its the welding equivalent of hot glue. I took it because I needed it, but kept looking for a better position. When I did find one they offered me a raise to stay, having noticed that I worked faster and made fewer mistakes than the rest of the shop.
Free markets only benefit society in their being free - everyone makes their own decisions, that is what freedom amounts to. Why does the pop culture of this society assume that the desired result for most businesses is to be a benefit to society? No one says "I'm going to open a welding shop because it is a benefit to society".... they say "I'm going to open a welding shop because there is an unfulfilled demand for one and I will make money".
If you can only see a downward spiral in this, I suspect you don't have a job that produces something. Usually when you produce something of value to another person, you quickly understand the cause and effect nature of markets. And yes, burger flippers are at the mercy of their employers - it's hard to stand out as any kind of line cook, many other people can also do it well enough to keep you in the median white noise. The solution to that equation is to only do it for as long as necessary to gain some other skills that will pay you better, or in the case of musicians and actors, wait for your big break.
And everywhere I've worked, we all knew what everyone else got paid, even if we weren't supposed to talk about it.
During the time that you were working at the skill level of $10+ but was paid $7.50 you were underpaid, even if only temporarily. Clearly the company got along fine when you got your raise later. They also received the benefits of your skill while they were paying you $7.50. If the company did this with other workers as well then it certainly benefited from wage arbitrage.
Your example also doesn't work in a real world test involving outsourcing. Suppose someone in the company decides that it is worth muddling through with people who accept $7/hr? Suppose they can do this by hiring through a temp agency where the offered wage is $6/hr, with no benefits? Temps are rotated in and out in this scenario so that the position always pays $6. Other companies start doing this and now the "market value" of your job is $6. So in this scenario, back when you were paid $7.50, even though your skills and company profits could afford to pay you $10, were you actually worth $6?
Let's set aside the downward spiral part for now. Assuming we accept your argument that "this is the way things work, it mostly works ok, just accept it," I can still fairly point out that wage pricing inefficiency is happening and that there is room for improvement.
The middle portion of your reply did not address my post correctly. What I posted was based on the popularly accepted assumption that the free markets would accurately and naturally provide fair pricing that benefits all parties of a business transaction, and therefore society at large.
I in no way said that deliberate interference was needed to serve society. That's actually absurd since one defining characteristic behind the free market concept is that its end point would serve society on its own, eventually.
But I did bring up one hypothetical real-world scenario where the free market seems to fail at providing the correct benefit to both sides [specifically for the worker] over time. However I left an open end for debating whether it really is the "free market" at fault or if there was actually a more specific factor in how we assign wages. It's even possible that you're right, everything generally works as-is, but acts too slowly and inconsistently so that some people still miss on appropriate wages.
My background is in regulated sci/tech manufacturing where no single person can commercially produce the end product on their own. The operators at downstream production on the floor cannot make anything without the significant support from all of the other groups, from engineering to regulatory to upstream production. Maybe the process complexity and interweaving roles obscures the visibility of an individual's value compared to your experiences, and thus makes it easier for lower wages to be offered.
Not all work cultures are friendly to sharing salaries. Assuming the best case scenario of an open culture, this still doesn't do anything to help people who are on the outside getting their first salary bids. Would you support a change to the culture such that everyone openly discusses their salary? I think this could be helpful although there might be drawbacks too.
There are select instances where your argument [that we are getting by just fine as-is] holds up but it is not universally applicable to increasingly complicated set ups. This shows that there is room for improvement in how wages are set. I don't think a strong enough argument was presented to say that a downward spiral in wages [a general industry-wide trend as opposed to individuals] cannot happen.
Quote:
Originally Posted by oldtrader
This is how business has to operate. They pay, what they can afford to pay for a particular job, based on how much income the employee brings into the company. They cannot base their pay on what the employee would like to earn, or they would soon be out of business. And at times when business is down, and they produce less goods as an example, they lay off the people that made the goods, to get the staff down to the point they can produce the goods they can sell without a lot of extra being produced and no sales which means the company goes into the red and loses money. What value would be in keeping way more people than needed to produce the goods. None. Companies are not in business to lose money.
No argument with your clearly explained basic concepts and examples other than that it is not universally applicable. Because the product of value to your company is specifically sales, the use of commissions made it easier for you to be paid according to the value of your output. Your model assumed a significantly smaller role for fixed wage support such as the clerks and executives so those were set aside. This probably won't work in many other places, such as in a production environment where the main output value comes from physical products created by a majority staff on fixed wages.
Why do we often see base wages for front line labor retreat when company profits remain high? This ironically doesn't hold true for those burger flippers, whose wages had hit a bottom at the minimum wage. But going back to manufacturing in tech or otherwise, if an entry level operator receives $20/hr with new offers dropping as low as $14, should a VP with plans to bail in 6 months with a golden parachute, just one VP out of over a dozen in the company, be receiving $1500/hr? Something in our implementation of the free market allows this to happen.
During the time that you were working at the skill level of $10+ but was paid $7.50 you were underpaid, even if only temporarily. Clearly the company got along fine when you got your raise later. They also received the benefits of your skill while they were paying you $7.50. If the company did this with other workers as well then it certainly benefited from wage arbitrage.
Actually, I don't know how the company did because I took the other job instead of discussing the raise with the first company. At the time the market for the stuff they made was good enough that they didn't need production efficiency. Whether they survived the 2008 downturn is anyone's guess (I don't live there anymore). Some artisan businesses did survive, many failed.
Quote:
Originally Posted by DriveNotCommute
Your example also doesn't work in a real world test involving outsourcing. Suppose someone in the company decides that it is worth muddling through with people who accept $7/hr? Suppose they can do this by hiring through a temp agency where the offered wage is $6/hr, with no benefits? Temps are rotated in and out in this scenario so that the position always pays $6. Other companies start doing this and now the "market value" of your job is $6. So in this scenario, back when you were paid $7.50, even though your skills and company profits could afford to pay you $10, were you actually worth $6?
In theory, if the pool of semi-skilled labor is willing to do the work for $6, then the job is worth that. It wasn't worth it to me to keep doing it at $7.50, I would have turned $6 down flat and gone to work in retail until something better turned up. Retail at the time was paying about that, and it was in nice air conditioned stores where one did not wear out clothing like in a working shop. Are there enough workers who know their value and are willing to vote with their feet to get it? Probably not - but that is a different debate than whether the employers should pay more than they do.
Quote:
Originally Posted by DriveNotCommute
Let's set aside the downward spiral part for now. Assuming we accept your argument that "this is the way things work, it mostly works ok, just accept it," I can still fairly point out that wage pricing inefficiency is happening and that there is room for improvement.
Certainly there is room for improvement, but I suspect you and I will take different views on characterizing what the actual problem is, and that will lead us to different ideas of what likely solutions may be. I would say that my argument is "This is the way things work, it mostly works ok, at least until it can be truly improved".
Quote:
Originally Posted by DriveNotCommute
The middle portion of your reply did not address my post correctly. What I posted was based on the popularly accepted assumption that the free markets would accurately and naturally provide fair pricing that benefits all parties of a business transaction, and therefore society at large.
I in no way said that deliberate interference was needed to serve society. That's actually absurd since one defining characteristic behind the free market concept is that its end point would serve society on its own, eventually.
Granted, that was my interpretation of what you said. Interpretations often turn out to be flawed if not incorrect when discussed in more depth.
I will say that based on past experience, free markets provide not fair pricing that benefits all parties, but uniformly mediocre pricing that allows most parties to get by and benefits the few who can see and implement means for improvement. The guy I worked for in that shop was a marginal businessman and had failed at least once before, IIRC. I knew others who were much smarter and actually paid well and promoted, knowing the benefits they gained from encouraging loyalty and retaining efficient workers. Those guys are still around and never seem to struggle, because they understand how to make a free labor market benefit them over the median employer. Some large companies do the same thing and prosper, in some cases through very difficult market situations. But you can't force them to be smart, they have to want to on their own.
Quote:
Originally Posted by DriveNotCommute
But I did bring up one hypothetical real-world scenario where the free market seems to fail at providing the correct benefit to both sides [specifically for the worker] over time. However I left an open end for debating whether it really is the "free market" at fault or if there was actually a more specific factor in how we assign wages. It's even possible that you're right, everything generally works as-is, but acts too slowly and inconsistently so that some people still miss on appropriate wages.
I don't recall your bringing up a scenario. When just one worker brings the market price down you mean? I think I addressed that to some degree, but also consider that one worker compromising for less has as little overall impact as one worker voting with their feet (as I have done on occasion).
Quote:
Originally Posted by DriveNotCommute
My background is in regulated sci/tech manufacturing where no single person can commercially produce the end product on their own. The operators at downstream production on the floor cannot make anything without the significant support from all of the other groups, from engineering to regulatory to upstream production. Maybe the process complexity and interweaving roles obscures the visibility of an individual's value compared to your experiences, and thus makes it easier for lower wages to be offered.
I would have thought that technical ability and experience would be more valuable to employers in your field than what I've described, but then I've never worked in your field so it's a conclusion based on pop culture reputation more than anything else. I wouldn't have guessed you guys would pay a good TIG hand as low as $7.50 (in the 1990's, probably $12 or so now).
Quote:
Originally Posted by DriveNotCommute
Not all work cultures are friendly to sharing salaries. Assuming the best case scenario of an open culture, this still doesn't do anything to help people who are on the outside getting their first salary bids. Would you support a change to the culture such that everyone openly discusses their salary? I think this could be helpful although there might be drawbacks too.
Granted, hardly any are friendly to it. Still happens though, almost everywhere. The boss isn't omniscient after all. One time I found out that my boss had bent the rules rather seriously to pay me what I wanted - it was only through the usual gossip that I found out how much more I was making and how my boss had managed it - by paying for my travel time and no one elses, which added about 2.5 hours of OT pay per day (it was a long drive). Since I liked her, and I felt she was taking a fairly significant risk in signing those time cards, I stopped reporting travel time and just kept working like everyone else. It wasn't a long term gig anyway, and it was a good work environment.
Quote:
Originally Posted by DriveNotCommute
There are select instances where your argument [that we are getting by just fine as-is] holds up but it is not universally applicable to increasingly complicated set ups. This shows that there is room for improvement in how wages are set. I don't think a strong enough argument was presented to say that a downward spiral in wages [a general industry-wide trend as opposed to individuals] cannot happen.
Honestly, I don't think there is any simple solution to how wages are set. As the old saying goes, free markets don't work perfectly or even well for the majority, they are just better than every other option. From a more practical point of view, encouraging workers to seek out valuable skills and encouraging employers to see the benefit of a symbiotic attitude towards their workforce is probably about the best we can do - but that doesn't sell as well as the rabble rousing class warfare, so no one does it. That alone tells me all I need to know about the motivations of those doing the class warfare talking.
Pretty much. This idea that people are paid what they are worth or the value added is baloney. Are the people making minimum wage really worth so little they don't deserve to be able to have food, clothing, and shelter? Heck even farm animals get that.
Employers pay as little as they think they can get away with.
if farm animals didn't somehow produce more than they cost to keep, they'd be out on the street as well.
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