Equal pay for all
August 6th, 2009 | Published in Economics idea | 8 Comments
In keeping with my egalitarian views, I want to explore the idea of paying everyone exactly the same wage. The idea would be that people get paid by the hour to show up to work. So long as workers meet a defined standard of competency or productivity, they would get paid.
In this post, I want to write down a list of all the things that could go wrong with equal pay for all. I am going to come back to this post and add to the list if I think of anything later. This includes incorporating any comments you might make.
I will then tackle the issues one by one in subsequent posts.
What could go wrong with equal pay for all:
- People could ignore the rules and pay different wages to different workers.
- People might refuse to do certain types of work that are unpleasant.
- There would be no incentive to train.
- Workers with rare talents might end up working in jobs where their talents aren’t used.
- People with experience might end up working in jobs where their know-how isn’t used to greatest advantage.
- The lack of a pay incentive for good work could result in everyone doing only the minimum needed to meet the formal requirements.
- If other jurisdictions had a varied pay structure, people with valuable skills might leave to get a higher wage.
- A flat distribution of wealth might make communities uniform and bland.
- Controlled wages could result in self-employment rising as a way to circumvent the wage controls.
- People might not want to take positions with high responsibility or stress.
August 7th, 2009 at 12:39 am (#)
I think this is similar to the sixth one, but how about “Productivity, hours of work, and effort might fall as there would be no additional compensation or future reward” ?
Also, “Fewer people, or fewer people with the required skills will accept positions with responsibility and pressure”
Eric
August 7th, 2009 at 8:50 am (#)
Eric
I think I have covered your productivity point in the sixth bullet, as you suggested.
Your point about responsibility and pressure falls under my second point I think. However, I will add a bullet for it because I want to address the stress and responsibility problem separately.
August 8th, 2009 at 11:59 am (#)
Stephen,
The best you can expect to get from such a scheme is that everyone ultimately becomes equated with the lowest common denominator in the herd. I’d bet that even the ‘dumpster divers’ operating behind the local restaruant would quarrel with your premise having value.
August 10th, 2009 at 9:28 am (#)
ClydeB
My belief is that it is actually quite difficult to evaluate the quality of work people do. I honestly don’t know what determines how much people get paid. If differences in pay are mostly arbitrary, I’d want to get rid of them.
The purpose of this line of posts is to try to see if there is an insurmountable obstacle to paying everyone exactly the same wage.
August 10th, 2009 at 9:28 pm (#)
Actually it is not how much people get paid or the highest pay a job demands, but the knowledge that with a scheme such as you are proposing, the best can not excel and the worst get carried. I honestly don’t believe you are that committed to the one size fits all concept that you seem to be championing.
August 11th, 2009 at 9:28 am (#)
ClydeB
Am I committed to a one size fits all wage system? That’s a good question. If it could be pulled off, I definitely would be. I’m just not sure if it can be done. That’s why I am looking at all the things that might go wrong.
Here’s the thing. One way or another, successful people carry those who fail. Either they help them directly or the poor resort to theft and other crimes. For a society to be strong, everyone needs to contribute. If everyone is contributing, everyone should receive a decent share of what is produced.
I too am worried about the free rider problem. I’m not sure how to avoid it. I do, however, believe that having some people earn huge incomes while others struggle isn’t helpful.
August 11th, 2009 at 1:12 pm (#)
The slopes of the curve are heavily populated by those who are neither failures nor successes. They for the most part “average”, some below – some above, they generally just want to get by. Why should the “A” type be hampered by such a group and at the same time why should the “average” be equated with the failures? All of these conditions can easily be observed on an job where everyone is expected to do the exact thing in the exact time period. Folks are just different and pity the manager who is not allowed to acknowledge the differences.
August 11th, 2009 at 1:29 pm (#)
ClydeB
Now we are at the crux of the matter, what motivates people. I don’t think external goals, such as higher pay, help motivate people to work hard hour after hour, day after day. If your sole reason for working hard is to get a big bonus once a year and work towards a promotion, I don’t know how you would get through the drudgery of the work itself. Work would be a living hell.
To survive and thrive in a work place, you need to internalize the value of the work you are doing somehow. You need to find things you like and enjoy about your job. The role of a good manager is to find ways to engage staff with the work that needs to be done.
A manager that orders his staff about and expects results because he gets to decide bonuses isn’t going to get very far.
An example to make my point, how much would I have to pay you to dig holes and fill them back in while I yelled insults at you? You would be doing this pointless task 8 hours a day, week after week. No matter how much I paid you, my guess is that you would be looking for another job pretty quickly.
It’s not all about the money.