Widdekind
Member
- Mar 26, 2012
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"Pride & Greed"
workers Pride themselves, in the wages that they can command; and are Greedy for higher pay. Reducing wages, during recessions, would be a blow to workers' Pride & Greed:
"Sloth"
western workers have voted themselves welfare doles, so that they need not work, even when others in their own "nations" must pay for their welfare:
"Deception"
Logically, wages that pay per hour worked do not reflect employer goals. Rather, employers only want their 'widgets' produced, so that their natural pay incentive-structure would be per 'widget' produced, not per hour bodily present and breathing on premises. Hourly wages motivate "going thru motions", "dragging feet", and otherwise making production take longer than necessary. Thus, hourly wages motivate Deception, in the work-place, between workers & managers. Conversely, pay per product produced would honestly reflect employer goals; would generally require no renegotiation during recessions (although order volumes, and hence total pay, would decline); would motivate workers to produce as fast and efficiently as possible, so that they could take their pay, and move on (to other jobs, or leisure). Why do western businesses willfully invite Deception into their organizations? What would be wrong with, "we can afford to pay you $X per 'widget', that's what the customers will pay for, the more product they buy, the more we all make, let's get the production-run done"? Hourly wages are obvious economic mis-communications, mis-representing economic incentives, and promoting Deception & division, within organizations, between workers & management. How is that good management? (Nominal hourly wages could be easily converted into per-item payments, by adjusting accounted hours, at whatever hourly wage, to yield the appropriate total payment.)
reference:
Boyes & Melvin. Economics, p.349+
workers Pride themselves, in the wages that they can command; and are Greedy for higher pay. Reducing wages, during recessions, would be a blow to workers' Pride & Greed:
For Pride & Greed, workers demand mandated minimum wages, and higher wages generally (e.g. Unions), even when others in their own "class" suffer there-from:worker morale is a major reason why wages are not reduced during recessions. Workers would view a wage cut as an indication that the firm does not value their work as much, and they might, therefore, suffer lower morale, with the result being lower effort. When some workers are laid off, those workers suffer from the job loss; but they are no longer at the firm, and thus cannot harm morale & work effort. Only in cases where the very survival of the firm is clearly at stake, do wage cuts appear to be acceptable to workers.
So, wages are "sticky downwards" because this promotes good worker effort, and ensures that workers and firms share the same goals, of efficient production & profit maximization. Rather than keep all workers when demand falls, by paying lower wages to all, it may be better for the firm to lay off some workers, and keep paying the remaining employees the same wage as before
Government Greed, for tax revenues, also impedes business:increases in the legal minimum wage to raise the natural rate of unemployment. When the government mandates that employers pay some workers a higher wage than a freely competitive labor market would pay, fewer workers are employed
By the time everybody gets done Greedily demanding their "special piece of the pie", it's hard to get much done.Income taxes can also affect the natural rate of unemployment. Higher taxes mean that workers keep less of their earned income, and so have less incentive to work
"Sloth"
western workers have voted themselves welfare doles, so that they need not work, even when others in their own "nations" must pay for their welfare:
the more generous the unemployment benefits, the higher the natural rate of unemployment. Increased benefits reduce the cost of being out of work, and allow unemployed workers to take their time finding a new job. For these reasons, we observe higher natural rates of unemployment in European countries, where unemployed workers receive higher benefits.
"Deception"
Logically, wages that pay per hour worked do not reflect employer goals. Rather, employers only want their 'widgets' produced, so that their natural pay incentive-structure would be per 'widget' produced, not per hour bodily present and breathing on premises. Hourly wages motivate "going thru motions", "dragging feet", and otherwise making production take longer than necessary. Thus, hourly wages motivate Deception, in the work-place, between workers & managers. Conversely, pay per product produced would honestly reflect employer goals; would generally require no renegotiation during recessions (although order volumes, and hence total pay, would decline); would motivate workers to produce as fast and efficiently as possible, so that they could take their pay, and move on (to other jobs, or leisure). Why do western businesses willfully invite Deception into their organizations? What would be wrong with, "we can afford to pay you $X per 'widget', that's what the customers will pay for, the more product they buy, the more we all make, let's get the production-run done"? Hourly wages are obvious economic mis-communications, mis-representing economic incentives, and promoting Deception & division, within organizations, between workers & management. How is that good management? (Nominal hourly wages could be easily converted into per-item payments, by adjusting accounted hours, at whatever hourly wage, to yield the appropriate total payment.)
reference:
Boyes & Melvin. Economics, p.349+