By “step increases,” I assume you’re talking about the GS pay schedule for US federal government employees. For those not in the know, a federal employee’s grade is determined by the types of work duties you perform; you can only change grades by receiving a promotion, which brings a change in the work/responsibilities assigned to you. The step is determined, more or less, by your level of experience: as you accumulate years of service, you receive step increases. They come rapidly at first - every year or two - with decreasing frequency over time, maybe once every three or four years. Eventually you hit the highest step in your grade, and from then on you only get annual cost-of-living adjustments.
ISTM that this is a pretty reasonable system: over the years, your raises come less and less often as your productivity asymptotically approaches a maximum, which (in theory) coincides with your pay reaching the top step. Not clear on what you think is ridiculous about it.
Market wages are by definition “fair”, in my opinion. The issue is one of globalization, where all of the sudden, the “fair” wage for American workers drops significantly because now they’re competing with third world workers for the same jobs. That’s a shock to both the economy and the workers themselves.
But how is it “fair” to pay Americans more than market wages for their work and leave third world people unemployed? This is why we need a basic income. So that we can let the market work unencumbered by price ceilings and price floors and other unfair distortions, and still make sure that people are fed, housed and clothed in the face of competition from the third world that drives down both wages and prices.
I think industry is not able make adjustments as fast as labor can. When labor is too high work leaves the country or state in search of cheaper labor. When demand for higher higher wages starts to fall and wage demands are less the industry is allready gone and it may take generations to get it back. I believe that it has less to do with wages than it does what we expect to buy with a salary. A strong dollar will buy a lot of goods yet put a hamper on jobs. Production costs per item have come way down because of technology, less labor goes into producing things so the net impact of labor costs is smaller. As these price of good goes down the demand for more and more goods goes up as well as the expectation of being able to simply own more things. Consumers are every bit as guilty as business. We are all greedy pigs! I think less controls are better and the minimum wage should be monitored and bumped now and then but never even close to a living wage.
When I worked at Intel I was a few cubicles away from someone in the Marketing Department. They were very nervous about this very thing, and we, even in engineering, got told very clearly to never make it sound like we were a monopoly.
Of course it is. But it’s one that leaves the price mechanism and free market intact for the vast majority of goods and services. The alternative is either a welfare state or planned economy (or a certain amount of each), both of which are worse than basic income for all. Well, the third alternative would be to let poor people suffer and die until the masses decide to revolt in disgust and murder the rich. But nobody wants that.
For example, you probably agree that a minimum wage is a bad idea in principle. It’s a price floor that causes a surplus of labor, aka unemployment. Basic income in my world would replace the minimum wage. Or means-tested welfare. You’d probably agree that it removes the incentive to obtain work, because your welfare will then be taken away. Basic income would replace welfare in my world, meaning there is no disincentive to getting a job, or a better job, or starting a business, or whatever, because the basic income is there regardless of what your earned income is.
There are a lot of hidden forms of welfare in our economy. It is my position that a basic income would replace them all. No more corporate welfare, no more agricultural subsidies, no more means tested welfare, no more food stamps with their restrictions on what you can and can’t eat, etc. Basic income gives people the freedom to spend as they see fit, unencumbered by misguided regulations, and keeps the market distortion to a minimum. Not to mention, rich people will like it to once they see how poor people spend all of it, versus rich people who just save their tax cuts and therefore don’t help drive economic growth (as much). “Demand-side economics” if you will.
Interesting, because most marketing departments are focused on differentiating themselves from the competition. “The all-new Chevy Silverado, the ONLY mid-sized truck with all wheel drive, a four star crash safety rating, and the JD Power ‘Truck of of the Year’ award for 2015!” – is basically an brazen claim that Chevy has a monopoly on this specific type of truck.
Did you tell all your customers, “Well, you can get the exact same thing from AMD”?
If the going rate to rent a 2 bedroom apartment in a particular market is $800, and a basic income of $200 is introduced, the going rate will soon approach $1,000.
Planned economy, welfare state, widespread misery and revolt, or a basic income? Which would you choose? And if you think there are other alternatives, I’ll be glad to hear them.
You assume that all workers actually work. It’s not always the case. I was in one engineering office where we were pretty much all GS-11 and our responsibilities were essentially the same. And most of us were serious about our jobs.
But then there was Mike. He would literally sleep at his desk, or disappear for hours, doing who knows what. I was assigned to a project with him - when I went to discuss it with him, he wouldn’t even look up from his desk, and, no surprise on my part, he didn’t show up at the meeting that afternoon and never did do his part of the project - I ended up doing it because it had to be done right away.
In the real world, he probably would have been fired, but in this particular organization, he was just shuffled from one group to another until one supervisor finally had enough and made the effort to document what a waste this guy was. He was eventually fired - the only federal employee I knew personally who lost his job due to his lack of performance. But he was employed there for somewhere between 10 and 15 years, racking up step increases along the way.
Yes, the fault was with the very first supervisor who couldn’t be bothered to take action, but still, he ended up being paid way more than he should have been because the raises happened automatically.
Because “Mike”'s salary is not set by market forces. It’s set by some arbitrary government budget and protected by bureaucracy.
But it also speaks to the disconnect between “productivity” and “what workers actually do day to day”. Unless you are in sales or some hourly job, a lot of jobs are basically just pushing paper and email around.
Only for certain values of “fair”. What you get is a situation where the market reaches an equilibrium where wages reflect the perceived value of each worker, as modified by the supply of equivalent labor. This has NOTHING to do with whether or not that wage is “fair” in a living-wage sense. What it does reflect is basically how many people are willing to do that particular job (or similar ones) for that wage. So if there are a lot of skilled people out there competing for the same set of jobs, the wage will be lower than if there were fewer. This presumes that employees will take the highest paying (in whatever sense) job, and that employers will try to pay as little as they can (in whatever sense).
Most of the issues that we tend to argue about around here center around the situation where there are a lot of low-skilled people competing for a large, but limited number of equally low-skill requirement jobs. There’s literally no upward pressure on those jobs, so the equilbrium wages tend toward minimum (or probably even below, if they didn’t exist), and as a result, these people don’t have a lot of money or options.
The flip side is to look at the tech industry. Most tech jobs that require degrees, tend to only require a BS in some kind of STEM field, or possibly a master’s. But they’re in short supply, so they pay pretty highly. By comparison, many other jobs that require college degrees that are more common pay much less, as there are more people who can fill those requirements, so they don’t have to pay as much to attract and keep them.
It’s just as fair to do that as it is for companies and foreign governments to allow those third world people to work absurdly long hours in unsafe conditions for tiny wages, and put Americans out of jobs because they can’t compete on wage price.
“All else” isn’t equal, and that’s why letting labor prices reach an equilibrium globally is kind of questionable. That rewards the countries who have lax safety regulations, or working condition regulations, and penalizes countries who have things like 40 hour work weeks and OSHA and the like.
Is that a good thing? Seems like it kind of screws everyone in one way or another.
It is a good thing because it brings the people in poor countries out of poverty. Jobs come as a package, wages, hours and working conditions are all packaged together. The lower the skills of the worker and the worse the alternatives then the worse the package they are offered. As they get better skills and better alternatives the packages get better. However if you mandate the package be good right away then it prices out the poor and unskilled and they never get that first step on the lowest rung of the income ladder. Look at China and how fast their wages have risen over the past thirty years. If you had mandated minimum wages or expensive work rules then it would never have happened.
Sure, but why should Americans support this, if it reduces our wages and standard of living? I mean, I don’t give half a crap about raising people in India up, if it means that people in MY country lose something in the bargain.
