What should jobs pay?

[CaptUSA]

I sometimes wonder if the lower classes get hit by inflation harder.

Hell yes, they do! They have less disposable income. That means EVERYTHING they spend their money on costs more. As you move up the scale, this becomes less true. At the next step, you probably have a higher mortgage which means, you will be paying it back with cheaper dollars - the larger the mortgage, the bigger the windfall. If you're at the next step, you probably don't spend as much as you invest. If you're old investments pay you back with cheaper dollars, you will have more of them. And since you aren't consuming as much relative to your wealth, more dollars equal more investments instead of higher prices like it does for the non-investor.

 

[Brian4Liberty]

I sometimes wonder if the lower classes get hit by inflation harder. Or is the end result that their wages are stagnant so that the Executive do actually have income that keeps pace with inflation? Is that why Executive compensation often seems so outrageous? Maybe that's because inflation is so outrageous and they just happen to be at the top where they can insulate themselves.

Also, if "New Money" comes into the system, do the very wealthy get it first?

All relevant questions. Executives generally set their own pay (in a circle-jerk fashion), so they can keep up with, or exceed the rate of monetary inflation very easily.

The elderly on fixed incomes are also hit hard by monetary inflation, especially in a situation where savings (interest) rates are manipulated to extreme lows, while price inflation is everywhere.

 

[heavenlyboy34]

All levels of society today have more than people at the same level did 50 years ago. Nobody had iPhones or flatscreens back then. (the iPhone which is common today has only been around for about ten years). But wealth of those at the top has grown exponentially faster than those at lower levels. They have taken most of the gains from higher worker productivity.

More cheap made in China iCrap =/= prosperity.

 

[dannno]

More cheap made in China iCrap =/= prosperity.

Efficiently, i.e. cheaply made goods = part of the prosperity equation

I agree there are more important things like a sustainable food system...and the food system has been hijacked by Monsanto and others who have through subsidies and regulations built a monopoly on their destructive farming techniques that is destroying the soil, requires too much water, pollutes too much and is not good for the longterm viability of food production.

I suppose transportation is more important than iphones and flatscreens since goods also require transportation. Transportation requires energy.

But poor people in this country, by and large (not all) are living very well.. much better than Kings and Queens did centuries ago.

 

[69360]

Whatever an employer offers and an employee agree to. It's that simple.

 

[Tod]

What bargaining power does anyone have if you're one applicant out of hundreds that applied to flip burgers? You try to bargain and you will be laughed at and dismissed.

That is very true, but all that says is that if you want a chance to make more you need to either find a position that doesn't have hundreds of other equally skilled applicants competing to drive down the wage or create your own position - be an entrepreneur. In any case, one needs to take steps to avoid being perceived as a mere commodity.

 

[VIDEODROME]

That is very true, but all that says is that if you want a chance to make more you need to either find a position that doesn't have hundreds of other equally skilled applicants competing to drive down the wage or create your own position - be an entrepreneur. In any case, one needs to take steps to avoid being perceived as a mere commodity.

Could try truck driving which less people seem to want to do these days. You'll still be seen as a commodity, but you'll make some money.

 

[MelissaWV]

Could try truck driving which less people seem to want to do these days. You'll still be seen as a commodity, but you'll make some money.

Or construction (I use that term very broadly here). In some areas, it still pays very well and there's a shortage in the long term for some more specialized positions, even accounting for the slowdown in new construction. Somehow I get the feeling a lot of people my age don't want to work outdoors and do much physical labor.

 

[Henry Rogue]

This is straight up BS. Higher-paying jobs don't make the price of the product go up if the person who is receiving that higher pay is really earning it.

If an employer has to raise his price to cover the value that the employee is providing, then the employee is not providing enough value in return. If the employee was really earning more money, then the employer may even be able to lower his prices.

You are talking about artificially raising people's pay without them raising their value. You just don't get it.


ETA:

Central planning arrogance at its worst. You think you can dictate the value judgments of each individual better than they can. You must be a god, Zippy, to have all that knowledge about which employee is providing which value to their employer.

Quality posts in this thread, it is a shame Zippy won't respond to you.

 

[Cleaner44]

Zippy... have you ever read any Ron Paul books? They are available from Mises as well as a great collection from Murray Rothbard.

 

[cubical]

People should be(and are) paid for their production. Period. Requiring people to be able to produce a certain amount before they can get a job is evil. Shocker, this is exactly what government does.

Saying prices of labor should be higher or lower is price controls and price controls don't work.

 

[heavenlyboy34]

Efficiently, i.e. cheaply made goods = part of the prosperity equation

I agree there are more important things like a sustainable food system...and the food system has been hijacked by Monsanto and others who have through subsidies and regulations built a monopoly on their destructive farming techniques that is destroying the soil, requires too much water, pollutes too much and is not good for the longterm viability of food production.

I suppose transportation is more important than iphones and flatscreens since goods also require transportation. Transportation requires energy.

But poor people in this country, by and large (not all) are living very well.. much better than Kings and Queens did centuries ago.

Yes, that's what I was getting at. However, gutting an economy for cheap toys that break down relatively quickly isn't a real step in upward mobility. IOW, being able to afford the latest iShit doesn't mean one is "prosperous". There are "poor" people in the US with mp3 players and cell phones, FFS. Toys are nice and all, but I wouldn't say spending away the future by incurring debt is a good bargain. Now, when goods drop in price because of market efficiency, this is a whole different story-it's constructive for producers and consumers in the short and long runs. Our buddy AF has posted some great stuff in the past by Eric Peters comparing/contrasting well made autos from only a few generations to toady's cars-good reading.

 

[heavenlyboy34]

Or construction (I use that term very broadly here). In some areas, it still pays very well and there's a shortage in the long term for some more specialized positions, even accounting for the slowdown in new construction. Somehow I get the feeling a lot of people my age don't want to work outdoors and do much physical labor.

That^^ There's lots of good money in the skilled trades...except they're "dirty". I wanted to be a welder at 18, but shit happened and that didn't work out.

 

[Occam's Banana]

What should jobs pay?

Jobs should pay whatever employers and employees find to be mutually agreeable.
Employers and employees are the only "we" that should have any say in the matter.

I sometimes wonder if the lower classes get hit by inflation harder. Or is the end result that their wages are stagnant so that the Executive do actually have income that keeps pace with inflation? Is that why Executive compensation often seems so outrageous? Maybe that's because inflation is so outrageous and they just happen to be at the top where they can insulate themselves.

Also, if "New Money" comes into the system, do the very wealthy get it first?

It's not an "either-or" situtation. The answer to everything you suggested above is (broadly & generally) "yes."

Richard Canitllon addressed this subject circa 1730 in his Essai sur la Nature du Commerce en Général (Essay on the Nature of Trade in General).

Those at the top of the chain of "Cantillon effects" benefit from inflation, while those at the bottom of the chain suffer from it.

FTA (emphasis added, links & footnotes elided): http://en.wikipedia.org/wiki/Richard_Cantillon#Monetary_theory

In Essai, Richard Cantillon provided an advanced version of John Locke's quantity theory of money, focusing on relative inflation and the velocity of money. Cantillon suggested that inflation occurs gradually and that the new supply of money has a localised effect on inflation, effectively originating the concept of non-neutral money. Furthermore, he posited that the original recipients of new money enjoy higher standards of living at the expense of later recipients. The concept of relative inflation, or a disproportionate rise in prices among different goods in an economy, is now known as the Cantillon Effect.

 

[2young2vote]

That isn't a question you or I can answer on a country-wide scale. It will be decided by the employee and job provider, with major influences by the government. As it is right now at my family's business, what we pay a person depends on their value to the business. We have some employees who we could fire and replace without any negative repercussions for the business, but other employees are major players in the labor pool. These other employees are faster and more knowledgeable which means they are worth more to us, so they receive higher wages.

Minimum wage screws everything up, though. We might value someone at $5.00 per hour, but we are required by law to pay them $7.40. That means we fire them and find a higher quality person who provides value equal to or more than the minimum wage. This is not good because that means our labor expense is 48% higher now than it would have been otherwise and considering labor is our #1 expense as it is, that is a huge leap in expenses. We had an employee who was basically an airhead. She showed up on time and did an ok job, but really just didn't know what was going on. She got fired because she wasn't worth $7.40 per hour and she will be replaced by someone who is. She lost her job because of the minimum wage.

What a job should/does pay is the value of the employee to the company. This isn't a question you or i can answer, unless we wanted to be communists in which case every job is worth the exact same.

 

[PRB]

All levels of society today have more than people at the same level did 50 years ago. Nobody had iPhones or flatscreens back then. (the iPhone which is common today has only been around for about ten years). But wealth of those at the top has grown exponentially faster than those at lower levels. They have taken most of the gains from higher worker productivity.

Luckily, they can't keep hoarding money forever.

 

[PRB]

Yes, that's what I was getting at. However, gutting an economy for cheap toys that break down relatively quickly isn't a real step in upward mobility.

Pointless unless somebody said it was meant to be.

IOW, being able to afford the latest iShit doesn't mean one is "prosperous". There are "poor" people in the US with mp3 players and cell phones, FFS.

Prosperity is subjective, but generally, being able to afford and have better electronic devices is a indicator of quality of life, if for no other reason than, they generally cost more than food and necessities.

Toys are nice and all, but I wouldn't say spending away the future by incurring debt is a good bargain.

Long term thinking is for communists, libertarians and capitalists think in impulses and instant gratification.

Now, when goods drop in price because of market efficiency, this is a whole different story-it's constructive for producers and consumers in the short and long runs. Our buddy AF has posted some great stuff in the past by Eric Peters comparing/contrasting well made autos from only a few generations to toady's cars-good reading.

protectionist bullshit

 

[PRB]

That^^ There's lots of good money in the skilled trades...except they're "dirty". I wanted to be a welder at 18, but shit happened and that didn't work out.

people think they're too good for dirty jobs, that's exactly what's wrong with our economy, the same people will complain they don't have jobs.

 

[PRB]

Could try truck driving which less people seem to want to do these days. You'll still be seen as a commodity, but you'll make some money.

actually, truck driving isn't that short of willing and qualified people, not while unions prop up prices and it's a relatively "clean" blue collar job. I have no problem being a commodity, being paid is all I care about.

 

[PRB]

Hell yes, they do! They have less disposable income. That means EVERYTHING they spend their money on costs more. As you move up the scale, this becomes less true. At the next step, you probably have a higher mortgage which means, you will be paying it back with cheaper dollars - the larger the mortgage, the bigger the windfall. If you're at the next step, you probably don't spend as much as you invest. If you're old investments pay you back with cheaper dollars, you will have more of them. And since you aren't consuming as much relative to your wealth, more dollars equal more investments instead of higher prices like it does for the non-investor.

while it's true they have less disposable income, it's also true that their overall spending is less, and therefore limited.

A person with $1500 a month in disposable income MAY be hurt harder when his rent goes up $200-500. But luckily it stops there.

By contrast, a person with $100,000 a month, may lose $2000 a month if inflation changed the wholesale prices on anything. Mathematically the rich person is hit harder, but practically and/or for survival, the poor almost always suffer more (short of exceptional cases where being poor qualifies you for greater subsidies).