Stephen Monrad

While idealistically I still support the idea of equal pay for all, it may not be achievable in the real world. I’d be happy if there was a decent minimum wage that paid enough to keep people out of poverty.

If the goal is to control inflation, there is no particular reason to pay everyone the same wage. All that is needed is to prevent a general creeping increase in wages across the economy.

The only way to prevent increases in wages when the economy is close to full employment is to regulate them. Someone, somewhere needs to write down maximum allowable salaries for different jobs. If every job has the same maximum, inflation will eventually push everyone up to the maximum and we would be back to the equal pay for all scenario.

The person responsible for setting wages, then, will need to set different maximum wages for different jobs. There could be many different reasons for setting higher maximums for some jobs. Right now, I’m just going to assume that the maximums are set somehow and are enforceable.

What I envision is an economy with a decent minimum wage that all workers must receive. Each job or job class has a maximum wage that is at least somewhat higher than the minimum wage. The difference creates room for the use of pay incentives.

The result would be a system where temporary bouts of inflation and deflation could occur when wages move up and down between the minimum wage and the maximums established for each job class. This type of inflation couldn’t get out of control. Prices would therefore not have to be kept in check by strong competition.

What I imagine would happen is that wages would tend to hover near their maximums when the economy is close to full employment. If a disruptive shock to the economy causes it to falter temporarily, wages could fall as the ripples of the shock spread through the economy. With proper interventions by government, the downturn would be only temporary, full employment would be restored, and wages would again rise close to their maximums.