9 ms·

A Fair Day’s Wage: The Return of Fair Pay?

22 points by davidgerard 12y ago

rbcgerard 12y ago
I don't understand how you have a discussion about this without discussing the total benefits an employee receives. i.e. if may salary remains constant at $30k a year but the employer portion of my health care coverage is $6k/year and growing at 15% - I do not have stagnant wages (i just didn't have a say in how they were spent)
- davidgerard 12y ago
  So the salary is constant but you're projecting health insurance costs rising 15% annually for the foreseeable future ... I may not understand the US, but is this actually something that is expected to happen?
  - WildUtah 12y ago
    It happened pretty consistently from 1980 to 2010, except the late 1990s. It's relaxed a little since 2010.
    - davidgerard 12y ago
      Given the US pays twice per citizen what other first-world countries do, I'd expect that cost to go down with increasing socialisation of health care - there's still a lot of inefficiency there.
      - WildUtah 12y ago
        Health care could hardly be any more socialized in the USA; it's been the most controlled industry in the country for decades. Changes from subsidized finance to tax finance under Obamacare are superficial and accomplish little. The hope has to be that we can transition from bad, counterproductive state control to good state control. Bureaucrats have finally forced the medical colleges to allow new schools and expansions to train new doctors after decades of drastic undersupply so there is hope.
        davidgerard 12y ago
        You appear to be using "socialised" as a synonym for "regulated". It's highly regulated, but evidently for the benefit of private insurance companies, which is where that ridiculous cost disparity from other first world countries come from, which are more to the benefit of the actual citizens.
        WildUtah 12y ago
        Socialism is the centralized control of the means of production. How much rich elites hoard surplus value by means of that centralized control is immaterial. Wealth redistribution is orthogonal to socialism or freedom. In fact, welfare policies supporting egalitarian consumption are more compatible with capitalism plus an income tax than any kind of socialism. And socialism is a synonym for tightly, centrally regulated. Which is what the US health care system is; it's one of the most socialist systems in the world. The benefit of private insurance companies is a small part of what makes US medicine expensive. The relative lack of trained doctors and denying qualified nurses permission to treat common conditions without direct supervision of an MD and multiple layers of review for simple prescriptions are much more important. The cost disparity is mostly a result of badly run regulation rather than anyone's profits. Changing to a different funding system -- whether Obamacare or single player or NHS style public hospitals -- won't make US medicine much cheaper. The problems run deep and will take decades of dedicated bureaucrats rewriting rules, reorganizing institutions, and instituting new standards of practice with the support of wise, patient politicians to get it right.
        jholman 12y ago
        I agree with you about the (original and most important) meaning of "socialism", and I agree with the majority of the declarative sentences in your comment. However, that's not what the "socialized" in "socialized healthcare" means. Nobody uses it that way, that's not what it means. "Socialized healthcare" means that the cost burden of providing (some aspects of) healthcare is borne by the society. "Socialized healthcare" is fundamentally about wealth redistribution. That's how people use that phrase; that's what that phrase means when people say it. I also am highly skeptical that the U.S. system of healthcare is "one of the most socialist systems" in the first world. More socialist than healthcare in Uganda, sure, perhaps. The means of production of healthcare are primarily owned and operated by private companies. Yes, they are regulated, but that's very nearly orthogonal to capitalism or socialism. And yes, there are socialist aspects to the American system, but my understanding is that they tend to be corner cases (admittedly large corner cases). I think you would be hard-pressed to find a first-world system of healthcare that has as much private ownership of the means of production of healthcare. As for the fix for the established fact that Americans pay around twice as much for slightly-inferior care (relative to other first-world countries).... Your claim that it's over-regulation is wildly citation-needed, although you might be right, and I think it's clear that there's room for SOME savings in things like nurse-practitioners. Nonetheless, the first and most dramatic thing that everyone notices when they compare the U.S. system to the systems that work better (e.g. every other member of the G8) is that the U.S. system is full of adversarial friction, where many private corporations each strive to take a piece of the pie. Good for private profits, bad for everyone else. Not a value judgement, just a difference from other first-world systems.
    - madcaptenor 12y ago
      This can't continue forever, though. Health care spending is 15% of GDP; if this trend continued for another thirty years it would be (15%)*(1.15)^30 or about 1000%.
- dingaling 12y ago
  > I don't understand how you have a discussion about this without discussing the total benefits an employee receives. In the UK, most employer-provided 'benefits' are taxable in that their value is deducted from the individual's personal allowance, i.e. the amount they earn before paying income tax. So it's even worse; not only does the employer 'spend' your salary on benefits you may not want, but it also hits your wallet by increasing the amount of income tax you pay. One of the first things I do at a new employer is opt-out of as many benefits as possible. They do not compensate with additional cash, but it reduces my tax burden.
  - spacecowboy_lon 12y ago
    err? do you actualy work in the Uk? the only benefit that it can make sense to opt out of is company car - The major benefit in USA terms is health is all ready provided by the NHS. Do you realy opt out of the pension? when I worked for a big company that was worth 6% tax free - let alone the share save schemes
    - dingaling 12y ago
      > the only benefit that it can make sense to opt out of is company car And private health insurance, gym membership and dental insurance, which knocked £900 out of my personal allowance until I cancelled them at my last work place.
      - spacecowboy_lon 12y ago
        Did you not ask if you coudl have the equivelent benefits added to your pension ?
stolio 12y ago
One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. If a company can have part-time (or sometimes full-time) employees who also receive food-stamps and Medicaid from the government then they've effectively found a free subsidy. The government is keeping their employees healthy for them. But if an employee directly depends on a company for their wellbeing and the wellbeing of their family then that company must take responsibility for those things if they want their employees to be happy and healthy long term. A fix, probably not very efficient, is if a company's employees are receiving X dollars in aid from the government, then the first X dollars of profit go towards paying that back. I think it's good we have social safety nets and they should provide value to business in the form of healthy and able-bodied workers, but companies shouldn't be leeching value in perpetuity from them. If an employee of a company is on food stamps then that company is simply not taking care of them. It bothers me that we have people who work full-time who still collect benefits because the companies they work for aren't taking care of them. We don't fix their machinery if they refuse to pay for the upkeep, but we do pick up the tab when they refuse to pay for the upkeep of their human capital.
- deciplex 12y ago
  > One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. Reason, perhaps, but not necessarily incentive. Just pointing that out. I like your proposal, but it seems like basic income is simpler.
- spacecowboy_lon 12y ago
  Which is why George Osbourn ()conservative chacellor) thinks the minimum wage soudl rise he be paying less in inwork benefits. I think that companies that have a large number of workers reciving inwork benefits should pay higher NI contributions. I dont mind paying for the NHS, but subisdising fast food workers for tax dodging multinationals not so much
- bko 12y ago
  Wouldn't another, simpler fix be to stop providing government aid to those employees? This would stop the government from subsidizing companies that pay low wages. Suppose the market rate for someone is $30k. The employee hired wouldn't particularly care if he gets 20k from the corporation and 10k from government benefits. If you removed the government benefits of 10k, that employee would still need to be compensated 30k to do that job. Therefore, the company would need to pick up that tab. If you claim that the employee is desperate and would work for 20k, then why would the company even bother paying him the 20k in the first place, and instead pay him 10k instead (minimum wage issues aside)? I think the article takes too narrow of a view of what a market wage is. It's not the bare minimum a company has to pay someone. It takes into account other factors such as retention, satisfaction and the talent you attract. As the article states, “increases in wages do, in fact, pay for themselves”. Wouldn't that make it the market rate?
bakhy 12y ago
“Increases in wages do, in fact, pay for themselves.” -- Good management is hard to find.
mschuster91 12y ago
What's not mentioned in the article: if your workers don't have to work at two or, worse, three jobs to feed their family, they will be able to use their free time to actually relax, thus being more healthy and productive. And they are likely to be able to spend the money they earn in local stores - because when I'd have to work 80h+ weeks, I simply would not have time for any shopping except food - and everything else on amazon, where I can shop 24/7.
dmichulke 12y ago
This question has no answer because the word "fair" has different meaning for everyone. Somehow "fair" reminds me of "Atlas Shrugged", especially, when uttered by government officials.
- davidgerard 12y ago
  In this moment, I am euphoric.
- bsbechtel 12y ago
  Fair is a completely subjective definition, but I guess the idea is that through a democratic process society as a whole comes to an agreement as to what is 'fair'. Instead of setting goals to pay people 'fairly' though, policymakers should be looking for ways to 1) make it easier for people to acquire 'middle class' jobs, and 2) make it easier for people to start their own business (remove employer protections + improved access to financing). There are 300+ million Americans that each have a unique perspective of this world. Each of these unique perspectives provide the opportunity to creatively solve a problem in a way that adds value to someone else, and start a business around it. Of course only a small percentage will, but that number becomes even smaller when you can't start your own firm because your employer has locked up your IP that's unrelated to its core business, or you can't save up the $5-10K needed to finance a prototype of your idea because your 'middle class' wages are too low. If you make it easier for more people to start businesses (read: not protect existing businesses), you create more jobs and the 'fair' wages take care of themselves. Also, by forcing 'fair' wages on employers, you further reduce the ability for someone to start a new business (specifically in retail or food service) because their burn rate is now higher due to higher labor costs.

22 points by davidgerard 12y ago

I don't understand how you have a discussion about this without discussing the total benefits an employee receives. i.e. if may salary remains constant at $30k a year but the employer portion of my health care coverage is $6k/year and growing at 15% - I do not have stagnant wages (i just didn't have a say in how they were spent)

davidgerard 12y ago
So the salary is constant but you're projecting health insurance costs rising 15% annually for the foreseeable future ... I may not understand the US, but is this actually something that is expected to happen?
- WildUtah 12y ago
  It happened pretty consistently from 1980 to 2010, except the late 1990s. It's relaxed a little since 2010.
  - davidgerard 12y ago
    Given the US pays twice per citizen what other first-world countries do, I'd expect that cost to go down with increasing socialisation of health care - there's still a lot of inefficiency there.
    - WildUtah 12y ago
      Health care could hardly be any more socialized in the USA; it's been the most controlled industry in the country for decades. Changes from subsidized finance to tax finance under Obamacare are superficial and accomplish little. The hope has to be that we can transition from bad, counterproductive state control to good state control. Bureaucrats have finally forced the medical colleges to allow new schools and expansions to train new doctors after decades of drastic undersupply so there is hope.
      - davidgerard 12y ago
        You appear to be using "socialised" as a synonym for "regulated". It's highly regulated, but evidently for the benefit of private insurance companies, which is where that ridiculous cost disparity from other first world countries come from, which are more to the benefit of the actual citizens.
        WildUtah 12y ago
        Socialism is the centralized control of the means of production. How much rich elites hoard surplus value by means of that centralized control is immaterial. Wealth redistribution is orthogonal to socialism or freedom. In fact, welfare policies supporting egalitarian consumption are more compatible with capitalism plus an income tax than any kind of socialism. And socialism is a synonym for tightly, centrally regulated. Which is what the US health care system is; it's one of the most socialist systems in the world. The benefit of private insurance companies is a small part of what makes US medicine expensive. The relative lack of trained doctors and denying qualified nurses permission to treat common conditions without direct supervision of an MD and multiple layers of review for simple prescriptions are much more important. The cost disparity is mostly a result of badly run regulation rather than anyone's profits. Changing to a different funding system -- whether Obamacare or single player or NHS style public hospitals -- won't make US medicine much cheaper. The problems run deep and will take decades of dedicated bureaucrats rewriting rules, reorganizing institutions, and instituting new standards of practice with the support of wise, patient politicians to get it right.
        jholman 12y ago
        I agree with you about the (original and most important) meaning of "socialism", and I agree with the majority of the declarative sentences in your comment. However, that's not what the "socialized" in "socialized healthcare" means. Nobody uses it that way, that's not what it means. "Socialized healthcare" means that the cost burden of providing (some aspects of) healthcare is borne by the society. "Socialized healthcare" is fundamentally about wealth redistribution. That's how people use that phrase; that's what that phrase means when people say it. I also am highly skeptical that the U.S. system of healthcare is "one of the most socialist systems" in the first world. More socialist than healthcare in Uganda, sure, perhaps. The means of production of healthcare are primarily owned and operated by private companies. Yes, they are regulated, but that's very nearly orthogonal to capitalism or socialism. And yes, there are socialist aspects to the American system, but my understanding is that they tend to be corner cases (admittedly large corner cases). I think you would be hard-pressed to find a first-world system of healthcare that has as much private ownership of the means of production of healthcare. As for the fix for the established fact that Americans pay around twice as much for slightly-inferior care (relative to other first-world countries).... Your claim that it's over-regulation is wildly citation-needed, although you might be right, and I think it's clear that there's room for SOME savings in things like nurse-practitioners. Nonetheless, the first and most dramatic thing that everyone notices when they compare the U.S. system to the systems that work better (e.g. every other member of the G8) is that the U.S. system is full of adversarial friction, where many private corporations each strive to take a piece of the pie. Good for private profits, bad for everyone else. Not a value judgement, just a difference from other first-world systems.
  - madcaptenor 12y ago
    This can't continue forever, though. Health care spending is 15% of GDP; if this trend continued for another thirty years it would be (15%)*(1.15)^30 or about 1000%.
dingaling 12y ago
> I don't understand how you have a discussion about this without discussing the total benefits an employee receives. In the UK, most employer-provided 'benefits' are taxable in that their value is deducted from the individual's personal allowance, i.e. the amount they earn before paying income tax. So it's even worse; not only does the employer 'spend' your salary on benefits you may not want, but it also hits your wallet by increasing the amount of income tax you pay. One of the first things I do at a new employer is opt-out of as many benefits as possible. They do not compensate with additional cash, but it reduces my tax burden.
- spacecowboy_lon 12y ago
  err? do you actualy work in the Uk? the only benefit that it can make sense to opt out of is company car - The major benefit in USA terms is health is all ready provided by the NHS. Do you realy opt out of the pension? when I worked for a big company that was worth 6% tax free - let alone the share save schemes
  - dingaling 12y ago
    > the only benefit that it can make sense to opt out of is company car And private health insurance, gym membership and dental insurance, which knocked £900 out of my personal allowance until I cancelled them at my last work place.
    - spacecowboy_lon 12y ago
      Did you not ask if you coudl have the equivelent benefits added to your pension ?

stolio 12y ago

One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. If a company can have part-time (or sometimes full-time) employees who also receive food-stamps and Medicaid from the government then they've effectively found a free subsidy. The government is keeping their employees healthy for them. But if an employee directly depends on a company for their wellbeing and the wellbeing of their family then that company must take responsibility for those things if they want their employees to be happy and healthy long term. A fix, probably not very efficient, is if a company's employees are receiving X dollars in aid from the government, then the first X dollars of profit go towards paying that back. I think it's good we have social safety nets and they should provide value to business in the form of healthy and able-bodied workers, but companies shouldn't be leeching value in perpetuity from them. If an employee of a company is on food stamps then that company is simply not taking care of them. It bothers me that we have people who work full-time who still collect benefits because the companies they work for aren't taking care of them. We don't fix their machinery if they refuse to pay for the upkeep, but we do pick up the tab when they refuse to pay for the upkeep of their human capital.

deciplex 12y ago
> One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. Reason, perhaps, but not necessarily incentive. Just pointing that out. I like your proposal, but it seems like basic income is simpler.
spacecowboy_lon 12y ago
Which is why George Osbourn ()conservative chacellor) thinks the minimum wage soudl rise he be paying less in inwork benefits. I think that companies that have a large number of workers reciving inwork benefits should pay higher NI contributions. I dont mind paying for the NHS, but subisdising fast food workers for tax dodging multinationals not so much
bko 12y ago
Wouldn't another, simpler fix be to stop providing government aid to those employees? This would stop the government from subsidizing companies that pay low wages. Suppose the market rate for someone is $30k. The employee hired wouldn't particularly care if he gets 20k from the corporation and 10k from government benefits. If you removed the government benefits of 10k, that employee would still need to be compensated 30k to do that job. Therefore, the company would need to pick up that tab. If you claim that the employee is desperate and would work for 20k, then why would the company even bother paying him the 20k in the first place, and instead pay him 10k instead (minimum wage issues aside)? I think the article takes too narrow of a view of what a market wage is. It's not the bare minimum a company has to pay someone. It takes into account other factors such as retention, satisfaction and the talent you attract. As the article states, “increases in wages do, in fact, pay for themselves”. Wouldn't that make it the market rate?

bakhy 12y ago

“Increases in wages do, in fact, pay for themselves.” -- Good management is hard to find.

mschuster91 12y ago

What's not mentioned in the article: if your workers don't have to work at two or, worse, three jobs to feed their family, they will be able to use their free time to actually relax, thus being more healthy and productive. And they are likely to be able to spend the money they earn in local stores - because when I'd have to work 80h+ weeks, I simply would not have time for any shopping except food - and everything else on amazon, where I can shop 24/7.

dmichulke 12y ago

This question has no answer because the word "fair" has different meaning for everyone. Somehow "fair" reminds me of "Atlas Shrugged", especially, when uttered by government officials.

davidgerard 12y ago
In this moment, I am euphoric.
bsbechtel 12y ago
Fair is a completely subjective definition, but I guess the idea is that through a democratic process society as a whole comes to an agreement as to what is 'fair'. Instead of setting goals to pay people 'fairly' though, policymakers should be looking for ways to 1) make it easier for people to acquire 'middle class' jobs, and 2) make it easier for people to start their own business (remove employer protections + improved access to financing). There are 300+ million Americans that each have a unique perspective of this world. Each of these unique perspectives provide the opportunity to creatively solve a problem in a way that adds value to someone else, and start a business around it. Of course only a small percentage will, but that number becomes even smaller when you can't start your own firm because your employer has locked up your IP that's unrelated to its core business, or you can't save up the $5-10K needed to finance a prototype of your idea because your 'middle class' wages are too low. If you make it easier for more people to start businesses (read: not protect existing businesses), you create more jobs and the 'fair' wages take care of themselves. Also, by forcing 'fair' wages on employers, you further reduce the ability for someone to start a new business (specifically in retail or food service) because their burn rate is now higher due to higher labor costs.