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Compensation for risk occurs through the same mechanism as compensation for everything: the supply and demand curves. This creates outcomes where the compensati
by smabie 6y ago
Compensation for risk occurs through the same mechanism as compensation for everything: the supply and demand curves. This creates outcomes where the compensation for risk occurs at a deeper level, co-mingled in with many other factors.
I'm sure many people don't agree with this and think the absolute riskiness of a job should factor into compensation irrespective of the risk preferences of the labor market as a whole.
I don't really agree and generally contend that markets (labor or otherwise) are the most efficient and elegant solution for pricing anything. At the very least, if a better and more robust system exists, it hasn't been discovered as of yet.
- elil17 6y agoWhen the government is the one doing the hiring, they don’t have to pay market rates. They can decide add on hazard pay. This system already exists - it’s why police get better pay and benefits compared to jobs with similar education requirements and levels of danger in the private sector (e.g. delivery drivers). Why couldn’t that hazard pay be extended to these psychiatric responders?
- souprock 6y agoYes they have to pay market rates. Suppose they don't. They declare the job to be worth $2/hour, which they can do because minimum wage is just a law the government can change. Nobody takes the job. Now what? Those job openings go unfilled forever, literally forever, until the government decides to pay market rate. The only way to pay below market rate is conscription. The government could draft people, forcing them to do the job. If people are free to leave, they are getting market rate.