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That's a steep and short ladder for Fred, the lucky guy. In my experience, it's usually a lot more horizontal and lengthier. I want to say it doesn't detract fr

That's a steep and short ladder for Fred, the lucky guy. In my experience, it's usually a lot more horizontal and lengthier. I want to say it doesn't detract from your point, but there's good reason why you want a long climb "to the top" if you're at the top and trying to keep more of it for yourself. Fred shouldn't have really been paid $10/hr in the first place. Not everyone has good information about this market. I don't get to see how much someone paid for Fred's labor. That means someone is likely to underbid for my labor if I'm in the same business, to which I must take time to convince them otherwise. I can also try to get them to overbid for my labor, to which they must convince me otherwise. And off we go to the negotiation. Why is it good that we have different people producing similar levels of output and are paid differently?

sokoloff 11y ago
I don't know if it's good per-se, but it's preferable to the most obvious alternative, which is centrally planned and arbitrated compensation. (I'm not trying to erect a strawman, but how else would one ensure perfectly equal pay for equal output other than via some centralized mechanism?) As a Fred, assuming you want to continue to be an employee, you should sell your labor to the employer who gives you the best overall deal for you. As an employer of Freds, you should seek to get the best mix of Freds you can for the lowest sustainable rate. Bringing in other actors to arbitrate and equalize pay doesn't add anything that the actors in the system can't already do, IMO. (Maybe Fred1 values that his employer allows dogs, or has bike parking, or is a short walk from his house. Maybe Fred2 likes his employer's stance on social issues, or benefits package, or likes working 4-10s instead of 5-8s. How will the central pay authority value those things better than independent actors making their own choices?)
WalterBright 11y ago
There's really no such thing as two equal employees. People are different. For example, back when I worked at Boeing, there were two cashiers in the cafeteria. One young, one old. The line for the young one was twice as long, because she rang up people twice as fast, and everyone knew that. Union rules, which presumed that time on the job determines productivity, required that the older worker got paid more, and when layoffs came, the young one got laid off.

sokoloff 11y ago

I don't know if it's good per-se, but it's preferable to the most obvious alternative, which is centrally planned and arbitrated compensation. (I'm not trying to erect a strawman, but how else would one ensure perfectly equal pay for equal output other than via some centralized mechanism?) As a Fred, assuming you want to continue to be an employee, you should sell your labor to the employer who gives you the best overall deal for you. As an employer of Freds, you should seek to get the best mix of Freds you can for the lowest sustainable rate. Bringing in other actors to arbitrate and equalize pay doesn't add anything that the actors in the system can't already do, IMO. (Maybe Fred1 values that his employer allows dogs, or has bike parking, or is a short walk from his house. Maybe Fred2 likes his employer's stance on social issues, or benefits package, or likes working 4-10s instead of 5-8s. How will the central pay authority value those things better than independent actors making their own choices?)

WalterBright 11y ago

There's really no such thing as two equal employees. People are different. For example, back when I worked at Boeing, there were two cashiers in the cafeteria. One young, one old. The line for the young one was twice as long, because she rang up people twice as fast, and everyone knew that. Union rules, which presumed that time on the job determines productivity, required that the older worker got paid more, and when layoffs came, the young one got laid off.