Posted on 01/08/2002 4:54:09 PM PST by parsifal
A Freeper Primer in Fair Wages
Many Freepers seem to have difficulty with the concept of "fair" wages. Not with arguing whether or not government should attempt to "legislate" fair wage laws. No, there the average Freeper seems quite adept in logically addressing the pros and cons of given legislation. And not with the economics of "fair" wages. Again, the average Freeper seems quite well-informed of the mechanics of supply and demand.
But when it comes to the very basic concepts, like differentiating between a "fair" wage and the "actual" wage, or how "wages" are established in the first place, then, IMHO, the Freeper "supply" of confusion, illogic, and contradiction far outstrips the "demand". It is to that end this primer is presented.
Consider first the formal definition of "fair." Chambers English Dictionary defines "fair" as "just, equitable, reasonable, good, and impartial". This isn't much help. Look up these words and you'll find "fair" in their definitions. Black's Law Dictionary does a better job: "Having the qualities of impartiality and honesty; free from prejudice, favoritism, and self-interest. Just; equitable; even-handed; equal as between conflicting interests.
Even though this leaves a definition you could drive a Mack truck through, we have a framework to begin describing a "fair" wage. It is a wage that is reasonable and even-handed for the work performed. Not too high and not too low. It is an equitable bargain between the Employer and the Employee. It is an arms-length deal on a level playing field. But it is still an undetermined variable amount. So let us treat it as a variable and name it "Y".
This brings us to another term: the "actual" wage. This is easier to quantify because it is the actual paycheck. But it varies from Employer to Employer, Employee to Employee, and job to job, and area to area. That makes it a variable, and we can name it "X".
With these two simple variables behind us, we are able to begin philosophically analyzing "fair" wages. In a perfect world, X would equal Y. Now some Freepers (Laisse-Faire Purist Freepers, LFPFs)will argue that in a free society, X does equal Y. They will maintain that if an Employee voluntarily signs on for a paycheck, then the actual wage is automatically fair. For them, two variables collapse into one variable, and thus endeth the analysis.
But these same Freepers do not apply that same logic to the tax rate. There, even though we elect our representatives, and they set the tax rates, a 70% marginal rate is "unfair" and 15% marginal rate is "more" fair. (For some, any tax rate, including .01%, is unfair.) Ayn Rand would probably not approve of their analysis, considering it an "anti-concept", but neither of these answers directly confronts the issue. The LFPFs deserve an answer, and if the first five paragraphs do not persuade them, then maybe this one will: X would equal Y ONLY in a perfect world. Our world is not completely economically free, therefore it is not perfect, thus X can not equal Y. If nothing else, coerced taxes would create a difference between X and Y.
Whether that satisfies the LFPFs or not, who can say, but the bulk of Freepers will probably agree that actual wages often do not equal fair wages. It would also follow that the closer we as a society move toward X=Y, the more fair and equitable a society we will be. There should not be a lot of disagreement on this point. This is about like saying healthiness is better than sickness. This is still very theoretical. We might desire a thing and still realize that the thing is not obtainable. We may prefer health while realizing that a cure may be worse than a sickness.
Now that we have established (1) -- that X does not equal Y, and (2) -- that X=Y is a good, desirable thing, the fireworks can start. Here reasonable people can disagree. Some might think that if the government tries to force an X=Y situation, chaos is a likely result. Surprisingly to many, I happen to agree in large part with that position. Others might think government intervention is "immoral" and an unwarranted use of coercion. I agree with that in small part. Communists, socialists, and left-wing extremists would probably disagree with both of those positions. The heck with them! Let us travel down the "chaos" and/or immorality path.
If we agree that government intervention to produce "fair" wages could result in economic chaos, does that mean we should do nothing? Or, are there certain actions that government can take relatively safely. It is my position that there are many things government can do "interstitially" and "around the edges." Take, for example, minimum wages. While Minwage cannot move X closer to Y, Minwage might keep X from moving away from Y in the wrong direction.
Is this "cure" worse than the "sickness"? It's debatable and it is not the purpose of this primer to resolve this issue. The purpose here is to put the argument into a proper logical framework. Minwage is a legitimate concern. It can be viewed in an economically rational perspective. It is not necessarily a call to the banner of the Hammer and the Sickle.
Is Minwage immoral? Is it an unwarranted, forcible intrusion into the Employer-Employee contract? Maybe. I don't think so. If a "fair" wage is an even-handed arrangement, does any person voluntarily enter into an agreement which will not allow them to eat and pay rent? Maybe. But it can be viewed in an economically rational perspective. Contract law recognizes that not all contracts are fair or equitable. That does not necessarily make them un-enforceable. The degree of unfairness can be judged, and sometimes, if the unfairness reaches a level of "unconscionability", a contract can be reformed or voided. But again, the point here is not to resolve the point, but to put the issue into a more arguable framework.
I hope this primer will make future battles more productive of light, than heat. I wrote this as a result of several threads wherein logically inconsistent arguments were thrown about like kindling. Some examples:
Argument: We should have fair wages!
Response: Life ain't fair!
Analysis: The fact that life ain't fair didn't keep up from trying to impeach Clinton. Or arguing when it didn't happen.
Argument: Some people don't get fair wages.
Response: It is fair. If they don't like it, they can leave!,
Analysis: The ability to leave the old job don't make the Old X=Y.
Argument: Some employers screw their employees out of wages.
Response: That can't happen because X always equals Y.
Analysis: There isn't a level playing field between a rich employer and a poor job applicant? One is going to have the upper hand.
With sincerity, parsy.
We don't put price controls on food so grocery stores suffer to feed the hungry, everyone else ponies up with food stamps.
Actually, this is what happens. The taxpayers subsidize certain businesses that do not pay their employees enough to live. For example, how do you figure the minwage employee at Wal Mart who works 30 hours a week pays his rent? And feeds his family? And goes to the doctor? Welfare and food stamps.
True. That's because I am not one to go around stirring up trouble. IMHO, most wages paid are unfair. The person doing the paying has every incentive to cut into the employee's pay as much as possible.
I disagree. A person in that position can share an apartment with 2 other people in that position, and get along just fine. I know a few newcomers to this country who do that.
What, a person should expect to have four kids with his/her own home? Then it's not wages that are being subsidized, but stupidity.
If I have a family I'm sure as He!! not going to work just 30 hours a week and I wouldn't settle for a minimum wage job.
Hey you horny kids out there.
If you can't support a family,"keep it in your pants" until you can!
How about a little personal responsibility.
Only you can answer that question. If you decide that your wage isn't fair, you have two options.
1. Go to your boss and discuss it.
2. Quit your job and go work for someone who agrees with you.
If a "fair" wage is an even-handed arrangement, does any person voluntarily enter into an agreement which will not allow them to eat and pay rent?I'm confused, man. Does "fair" mean a just wage for a given investment of labor, as in a fair trade? Or does fair mean that a wage payer is somehow responsible for whether you can pay rent or buy groceries, which you imply above.
/john
A living wage is determined by taking the cost of living in a geographical area and determining the cost of a comfortable lifestyle. The living wage is then that hourly amount which provides the objective lifestyle. In effect this transfers the cost of welfare from the public to the private sector. A side effect is less motivation for people to improve themselves.
The Sacramento (Socialist) Bee recently gave us an example of a "poor soul" who needed a living wage. This was some healthy young guy who dropped out of high school, made two babies, did not have the responsibility to marry the girl, but lives with her at his mothers house. He feels he does not make enough money flipping burgers. However, he is also not going to school to improve his lot in life.
We should pay this guy a living wage? No! I say he needs motivation to get his act together!
... would leave this country for one with a lower tax rate ...Or vote Republican. Or libertarian. Oppose tax hikes, favor tax reform, that sort of thing.
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