There’s sort of an unstated belief among many that those who make more money contribute more than those who make less.
Is this always true, sometimes true, or something else?
In the interest of full disclosure, I’d argue it’s rarely true: income is a measure of how much you can consume, not how much you produce.
Tricky to measure.
The guy on the production floor actually produces product.
The HR manager who oversees him produces nothing…physical. How do you measure the “productivity” of management?
There are a number of university presidents who get paid more than the President of the U.S. Are they really “producing” more than he does?
This just isn’t the sort of thing that can be calculated on a line-item basis. The best we can work out is the bottom line.
I can’t possibly figure out how income is a measure of how much you consume. Many people with low incomes consume beyond their means, and many people with high incomes consume within their means and save or give away the rest. Income doesn’t necessarily correlate with expenses in the short term.
Hey, we have disagreed in the past I think, probably my fault, so I am asking you this as neutrally as possible but still stating that as usual I have an anti-capitalist position. Anyway, your description was very good, it is accurate and easy to understand. My question: In addition to balancing/comparing pay between jobs in the same company/feild there is also balancing/comparing pay between industries. For example, lets say a highly successful Interior Designer will make at least $150K a year. The average salary for a teacher is about 53K. How can we possibly say fancy drapes and cool looking modern art are $100K more valubale than a kids education???
Salary: http://www1.salary.com/Public-School-Teacher-salary.html
Sounds like a strawman to me. Who says this, and in what context? Are ‘they’ saying in all cases? In some? Most? Few? Depending on the context you can either dismiss them or basically they are saying that water is wet.
Don’t know…can you give a cite of someone saying this? I mean, if it’s simply YOUR impression of what they are thinking, well…you seem to often come from left field in these discussions, so it’s hard to say whether your impression of what you think they are thinking is thunk.
However, I’d go with it’s sometimes true and sometimes not.
Well, there’s a shock. 
And, as usual, your argument is simply wrong. Income is a measure of what society, a.k.a. The Market(tm…arr) assigns to the worth of the work you do. This figure can be distorted by various factors of course, but roughly society has collectively decided the Michael Jordan’s salary is worth more than my own, regardless of how hard I work or how often he plays golf or is paid to make commercials or give speeches for a fee. It has nothing to do with how much either of us consumes OR produces, depending on what you mean by that. On the other hand, The Market has said that my own worth in the form of what I’m compensated for my time (a.k.a. what I’m paid in terms of salary, benefits, etc) is more than, oh, say the guy who sold me a breakfast burrito this morning, again, regardless of how much either of us consumes or produces, and regardless of how hard that guy works and how often I post answers to silly threads like this while I’m working.
That was a good description. “What the market demands”. That sounds almost like saying “Oh well, nothing we can do about it, might as well move on.” Well the point is there are some people who don’t like it and we want things to change. To say “The market demands” sounds casual and callous and I know that you - XT - are neither casual nor callous because we have spoke many times before, you’re allways telling me even people on the left can disagree where the bar is set.
So I’m not really sure what to think when I hear “The market demands…”
[QUOTE=Robert163]
So I’m not really sure what to think when I hear “The market demands…”
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Well, if it helps you, me and even good old LinusK ARE the market. We all are, collectively (figured I’d toss in that word to make LinusK feel better about it ;)). We, all together, decide what labor is priced at by the choices we make. How much are we willing to pay for that breakfast burrito…do we go and listen to a speech Michael Jordan gives or buy products he endorses…what, exactly is XT’s labor really worth to the organization he works for, and is XT willing to work for what’s being offered or does he take his labor to the circus instead and try his hand at feeding the elephants? The reality is that, individually we have almost no say in where the price of labor is set, broadly. Collectively, however, we all drive it by the myriad choices we, as a society make every day.
Regardless, income is not a measure of what you consume OR produce, except in the broadest meaning of those terms…it’s a measure of where the market or society or whatever you want to call the cogs and wheels that determines compensation for the various jobs out there sets the bar. This includes what CEOs, rock stars and premium athletes, IT network engineers and the guy making burritos all are compensated for. Individually we all might not agree with where the various bars are set for the myriad jobs, but collectively and broadly those bars are set by the decisions we all make each and every day in what we buy and what we do.
Nothing wrong with disagreements. Great Debates would be pretty dull without 'em!
I don’t think there can possibly be any answer to this. Is a baseball player getting ten million a year more “productive” than a welder making 40,000?
This is why we rely so heavily upon “the market” to make these decisions. Under market principles, a thing is “worth” whatever someone else is willing to pay for it. How can an issue of Action Comics #1 really be “worth” 3.2 million dollars? Under any objective set of standards, that’s beyond insane. But since there are people who are willing to pay it, that means it’s “worth” it.
But this is why I think the question in the OP can’t be answered. It’s looking for objective standards…and the free market doesn’t work that way.
ETA: I’m not much of a capitalist either. I favor a slightly more socialist position than a free market position.
You know what, that was a very good explanation. But I think our society values the wrong things. Our value systems are… superfluous and exaggerated. (I had to check the Thesaurus under the term excessive to get those terms. I wanted terms precise and descriptive). Now, I am not saying I am an expert on this topic just because I have traveled some but I much prefer the Canadian and European POV. I’v been to Canada 2 or 3 times and I’ve been to Europe three times, the last trip, 10 years ago, I stayed with some friends of mine in Finland for 10 days. 10 days is not that long of a time but I got a chance to meet people, go into their homes, hang out at restaurants, etc. My experience is that people there were much more relaxed than we were, they liked nice things like ipods and expensive lattes, but they weren’t like Americans, they were not on the “Rat Race”. Staying there was one of the favorite things I’ve ever done in my life.
Now, being an Anti-Capitalist, I argue a lot about all the things I don’t like about the USA. But even I have to admit there are lots and lots and lots of good things about what the USA produces. Only a fool would argue otherwise. I just wish… we had more balance and less Rat Race.
Ok, I’m getting tired, almost too tired to think well. I started out making a real easy example, very loaded to each side, teacher vs interior designer but I think your example, welder vs baseball player is good too. Ironically, and I don’t know why, I guess it never occurs to them, people complain about the baseball player who makes 10 million a year but they don’t even bother to mention the owner of the team, worth probably 5 billion dollars who sits on his ass and does nothing to contribute to winning the game. Oh well…
Indeed; this is why Realtors in the Hamptons so vigorously market multi-million dollar estates to those earning less than $20,000 in The Bronx.
You mean the owner that provides employment (and pays salaries) to the entire roster of players on the team, along with coaches, trainers, groundskeepers, office personnel, stadium workers, etc? The guy without whom none of those people would have jobs? The guy who takes the risks associated with owning a business? The guy who pays for the advertising, printing, travel, insurance, promotions, etc?
That owner?
Everyone (those gainfully employed and not in some sort of performance counseling situation) by definition contributes exactly what they’re worth to the employer. How are you valuing their contribution, if not by the dollars they’re paid for it? Do you have something else objective in mind?
One thing that throws a wrench in to this is immigration controls, which are the most powerful labor controls out there.
A teacher in Cameroon makes about $10 a day. Are they 20 times less productive than an American?
I don’t know how salaries are set in Cameroon. But in a more or less free market economy (that includes most of the industrialized world), salaries are set by how the market values your work. That may or may not be correlated to productivity. You could be an artist cranking out 7 paintings a week, but if no one likes them, you’ll not make much even though you are incredibly productive.
In the US, [public school) teachers salaries are set somewhat indirectly, since they are government employees and they pay depends to a large extent on how much taxes people are willing to pay. There might be some “market information” lost as that get translated to salaries. I think, though, that school boards try and set salaries at comparable rates to what teachers could make in the open market. If they don’t, then they should.
The idea that salaries must be tied to productivity is yet another attempt to validate the labor theory of value. Something I thought had been thoroughly debunked in earlier threads by the OP.
Quick google search:
[ul]
[li]“Why am I being punished for being productive?” And it seems the more productive I am, or try to become, the stiffer my punishment. America is punishing the productive[/li]
[li]We should: Abolish the IRS and pass the Fair Tax. Let’s encourage hard work and productivity — not tax American wages. Mike Huckabee: Stop Punishing Productive Workers[/li]
[li]A progressive tax code discourages productivity, actually rewarding you for producing less. This system destroys much growth in the economy that would flourish otherwise. Purposefully doing this simply so the rich have less is evil, and it hurts society as a whole. A Progressive Tax Code is Economically Destructive[/li][/ul]
The “market” is sort of a nebulous concept, and maybe a topic for a different thread. But I would say a couple of things about it. One is that markets are ruled, regulated, and policed by people. Another is that markets need police. One good example is the systemic corruption that lead up to the '08 financial panic. The market decided that selling fraudulent financial products to naive investors was worth billions of dollars. The people who perpetrated the fraud (to my understanding) mostly got away with it. The rest of America suffered profound financial and personal losses. The market doesn’t work in a vacuum.
But some get more votes than others. Doing face lifts and boob jobs in Hollywoods may be fantastically well compensated. Saving the lives of poor children, on the other hand, not so much. Is that because you and I have made some decision about the relative worth of boob jobs vs. the lives of poor children? No. It’s because Hollywood wives have lots of money, and poor children have none.
To be clear, I’m not advocating the abolition of markets. I’m merely asking whether income is a measure of productivity. If it is, it makes sense to reward people who are most productive, and punish those who are the least.
If income is a measure of something else, of some combination of other things (charm, family of origin, good looks, cunning, luck, lack of conscience, or the ability to throw a ball through a hoop) it makes less sense to punish the least fortunate, and punish the most.
Well, it’s because you and I and et cetera made decisions about the relative worth of seeing the latest Hollywood movie vs saving the lives of poor children – and after we decided to give that money to guys in Hollywood, they made decisions about the relative worth of boob jobs for their wives vs saving the lives of poor children.
Hollywood wives don’t just happen to have lots of money while poor children have none; Hollywood wives have money because people decided to give them money, and those people have money to give because yet other people made decisions too.
OK, then, it’s not.
It isn’t, so it doesn’t make sense to do that.
Gee, are those the only choices we have-- whom to punish? Are you sure about that?