Underpayment

[Agnapostate]

What are your thoughts on its prevalence and potential methods of combating it?

I have little doubt as to its existence. For instance, we might examine Hofler and Murphy's Underpaid and Overworked: Measuring the Effect of Imperfect Information on Wages, which incorporates the stochastic frontier regression technique to reach its conclusions regarding mass underpayment of workers.

As noted by the abstract:

This paper investigates the degree of shortfall between the wages workers earn and what they could earn assuming perfect or costless information in the labor market. The authors use the stochastic frontier regression technique to estimate the degree of shortfall found in wages on an individual basis. The paper tests, in addition, a number of hypotheses supplied by search theory in this context. The results generally confirm the propositions from search theory and indicate that, on the average, worker wages fall short of worker potential wages by approximately 10 percent.

Just another casualty of asymmetric information.

 

[roomy]

Another heap of shite that no one will respond to

 

[Agnapostate]

Another heap of shite that no one will respond to

Really? People do respond to you on occasion, so that may be wrong.

 

[editec]

It might help advance the dicussion if we could actually read the paper and not just try to imagine it based on the abstract, ya know.

Some workers are obviously underpaid.

Some obviously overpaid.

I've been in both positions.

I preferred the ones that paid me more than I was worth.

Ironically, in those cases where I thought I was probably being overpaid, my employers were far more generous with praising me for my contributions to the company, too.

Odd isn't it?

I suspect that in that case my emploers were the victims of casualty of asymmetric information.

 

[Paulie]

It might help advance the dicussion if we could actually read the paper and not just try to imagine it based on the abstract, ya know.

Some workers are obviously underpaid.

Some obviously overpaid.

I've been in both positions.

I preferred the ones that paid me more than I was worth.

Ironically, in those cases where I thought I was probably being overpaid, my employers were far more generous with praising me for my contributions to the company, too.

Odd isn't it?

I suspect that in that case my emploers were the victims of casualty of asymmetric information.

Who or what decides what you're worth?

 

[Neubarth]

Who or what decides what you're worth?

That is easy. Your conscience. When I was a manager with Pacific Bell there were times that I felt that I was overpaid and there was one time that I felt I was way underpaid. I guess they balanced out, but that period when I was way underpaid was hard. Luckily Pacific Bell brought in a work analysis auditing team to survey the management jobs where I worked. The recommended only one substantive job change and that was that MY JOB be split into three full time jobs.

Pacific Bell took their advice and ignored it and left me in my overworked situation. Luckily for me the company offered a reassignment to Marketing to any and all employees who were interested in a job change. I opted for it because one of the provisions was that if we decided that the job was not a good fit, we had full retreat rights.

Well, I went to marketing and completed four months of training and just did not like the job, so I opted to return to my old job. My former boss had quit about a month after I left. Once I was gone the job was too stressful for him and things were going wrong. The new boss had taken my job responsibilities and divided them up among three full time managers. When I came back I relieved one of those three managers of his job and he was assigned elsewhere.

By taking the Marketing job and then returning I had shed two thirds of my old job responsibilities and received an increase in pay. All of a sudden I felt I was overpaid. Compared to what I was doing before, I was. Compared to a NORMAL workload I was sort of in the middle when it came to work for pay. I liked my new job better.

 

[Agnapostate]

It might help advance the dicussion if we could actually read the paper and not just try to imagine it based on the abstract, ya know.

Academic papers typically have to be purchased, and are often set so that they can't be copied and pasted.

Some workers are obviously underpaid.

Some obviously overpaid.

I've been in both positions.

I preferred the ones that paid me more than I was worth.

Ironically, in those cases where I thought I was probably being overpaid, my employers were far more generous with praising me for my contributions to the company, too.

Odd isn't it?

I suspect that in that case my emploers were the victims of casualty of asymmetric information.

Yes, that certainly happens.

Who or what decides what you're worth?

In the case of the study that utilized the stochastic frontier regression technique, they set optimal prices according to market forces with perfect information...but in the real market, asymmetric information is bound to exist.