Thursday Evening Ramblings – 7/18/2019

I believe in the invisible hand. I believe that when market forces are allowed to function without excessive interference (like onerous regulations or protectionist tariffs) individuals will find an equilibrium for prices and wages.

One factor I’ve never quite understood, and maybe someone out there could explain it to me, is why we fixate on hourly wages for jobs in profit driven businesses. To me, an hourly wage is counterproductive for both the employer and the employee. It offers no incentive for an employee to work harder or be more productive in that position. As long as you show up and do the minimum required, you will earn the set hourly rate.

To me, it makes more sense to establish wage structures that are linked to productivity. If the business as a whole does well, both the employer and the employee earn more money. In the past, before computers were so prevalent, I can understand why this would have been impossible, but today, someone who is skilled at programming and math could easily tailor software for virtually every business that could calculate fair profit sharing wages.

This is an idea that both liberals and conservatives could find common ground on and improve the lives of just about everyone. I’ve worked in a broad range of businesses, and I could see this being applied everywhere I’ve ever worked. I once knew the owner of a repair shop who did this for his mechanics, and he said that his business absolutely exploded after he made the switch. Suddenly, those Friday afternoon jobs that normally were left until Monday morning weren’t quite as difficult to complete because the mechanic wanted the pay on this check.

If I were a person of influence, this would be my cause: to unite employers and employees in productivity-based wages instead of a set hourly rate.

That’s all for now.

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