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.
4 thoughts on “Thursday Evening Ramblings – 7/18/2019”
Makes sense to me.
Unfortunately, this leaves a WIDE opening for unscrupulous employers (by which, I mean the ones who put their personal profit above everything else) to cheat or abuse their employees financially. Look at the sweat shops of the previous two centuries for proof of this. Workers were paid piecework commissions and were basically worked into the ground for a pittance.
Even today, without strict legal regulation of a plan such as what you propose, “productivity” can be left up to the individual supervisors to define and determine. I’ve seen it in my own work place where one member of management, in particular, was fudging the productivity numbers of those under him to inflate his own bonus without allowing it to benefit the laborers in their quarterly productivity bonuses.
I agree to a point. However, I also believe that if markets are truly free, workers have leverage to push for higher wages and a better slice of the pie. We may never get there in my lifetime, but I truly believe that one day a profit sharing business model will win out over other structures. The advantages are too great. Of course, the other thought is that robots are about to supplant us all, so none of us will actually be working lol.
It’ll be a while before it comes to that. Machines tend to break down more frequently than humans. Plus, pepple can’t spend money if not earning money.