Given the recent protests by fast food workers wanting increased wages, I’ve come up with some ideas on what determines a reasonable income.
Education Level and Experience
Higher education level and more experience in a field = higher income. Logically, the more qualified you need to be for a job, the more you should be compensated for it. Education requires time and often large sums of money. If someone puts in numerous years of school for a degree, they deserve higher wages than a high school dropout. Jobs that require or heavily encourage a degree, then, should pay more.
In some edge cases, a job may benefit slightly from higher education, but not to an extreme degree. For this circumstance, individuals who obtain a higher degree than what is necessary or encouraged in the field shouldn’t be compensated as much as a comparable job that could greatly benefit from more education. Ideally, this would prevent people from getting degrees just for a higher salary, when the skill and knowledge obtained from the degree is far from crucial. I’m a huge proponent of education, but paying people for the degree they have rather than the degree a job needs would open up a vulnerability in which people could get a doctoral degree just to increase their paycheck without putting in any more work or bringing any more skill to the table.
Importance and Necessity
More important or necessary for economic and societal function = higher income. If a position is massively important for the day to day process of society, it should be justly rewarded. Positions like healthcare workers, social servants, and other jobs in which lives are on the line should receive more pay than something inconsequential like food service or secretarial work. It is undeniably more important for a doctor to diagnose me properly than for the cashier at a fast food restaurant to get my order right. We benefit significantly more from the services of teachers than those of gardeners.
Harder work = higher income. Difficulty isn’t necessarily just manual labor: tasks that are mentally puzzling should be considered hard in the same way that physical acts are exhausting. If a job is stressful to employees, that should be accounted for as well. Stock traders move enormous sums of money with the wealth of themselves and their customers on the line. Is this not as hard as construction work and the physical strain of moving large materials and machinery?
Local Cost of Living
Higher Cost of Living = higher income. In a perfect world, cost of living would not vary region to region. In reality, goods and services differ in price tremendously across the country and even city to city. As such, the wages of jobs in any given area should reflect the cost of living there. If gas is $4 per gallon in New York City and only $2 in the backwoods of Tennessee, jobs in the NYC area should pay more.
Opportunity and Availability of Labor
More job openings = higher income. Fewer workers in the field = higher income. One huge problem in the job market is field saturation. In the realm of technology, multitudes of students are obtaining degrees in Computer Science because they’ve been promised massive salaries, only to find that there are few to no jobs available for the majority. I’ve been extremely fortunate in going from an internship directly to a full time position, but many of the people I graduated with two years ago still haven’t gotten programming jobs. With income being the biggest reason many people get into the field, there should be some way to reduce the promised wages without penalizing those who are already in the field.
Such a system of rewarding people for getting into fields that need workers and avoiding fields that are overflowing with willing laborers would be difficult to properly administer, but would hopefully balance out jobs and workers over time. Of course, there would be a natural waxing and waning in much the same way that predator-prey populations fluctuate, but it should prevent massive pools of labor in empty job markets or huge demands for a certain profession with no qualified individuals to do the work.
To implement a structure like this fairly would be difficult. Are people grouped by entry year and locked into a certain pay brackets? What happens to people who have been in a certain field for decades when demand for that field shifts up or down? How is a field discouraged without punishing those already in it?
More risk of injury or death = higher income. Nobody goes to work expecting to be hurt or killed, and precautions are taken to reduce this risk as much as possible. Some jobs, however, are simply more dangerous than others by nature. Getting hurt at a desk job is far more difficult than getting hurt in a position that involves gunfire, heavy machinery, or some other danger. Therefore, these more dangerous positions should be compensated based on how likely it is to sustain injury. Not that a human life is worth a certain dollar amount, but people that go into these fields accept the risk it entails.
Effects on Existing Occupations with Examples
This sort of system would drastically shift the wages and demand for numerous jobs. Let’s look at a few examples and compare their current wages to what sort of salary they should receive based on these criteria. Please note, this segment gets rather verbose and goes on for a while. If you don’t care about individual examples, feel free to skim on down to the next section.
Fast Food, the industry that has sparked such heated discussion on fair wages lately, is an obvious candidate for the first example. Education and experience are completely unnecessary for fast food workers. The majority of the employees in food service are high school and college kids just looking to take care of bills until they get a full-fledged career. Flipping burgers and working a cash register are simple to teach and some intelligent apes may be capable enough to handle those. The preparation and delivery of food are neither necessary nor important for daily life, no matter how much some people may beg to differ. I will admit, food service does appear to be difficult work. It may not take a genius, but it is physically exhausting. Opportunity and availability of labor net about even, since there are a ton of positions open, but there are also countless able bodies willing to fill those positions. These positions are not exactly hazardous to one’s health: you might get a burn here and there, but you’re hardly likely to lose a limb or die. Overall, these jobs don’t deserve a high salary; higher than the current federal minimum wage, perhaps, but not by much.
CEO and Board Members, on probably the complete opposite end from fast food workers, deserve far less than what they receive in my opinion. Education is important, since management does need to be trained well, and prior experience in successful management positions is important. While it is important for the success of a company that the higher ups be in power, life would certainly go on without these positions filled. As for whether the work is difficult, I cannot attest. I don’t know anyone personally in extremely high ranking positions of large corporations. Logically, it seems as though such occupations would be highly stressful and mentally strenuous, so I’ll give them the benefit of the doubt and say it’s hard work. Opportunity is extremely limited, since corporations typically do not have a plethora of administration positions available. Availability of labor is greatly increasing, considering how MBA degrees are nearly a dime a dozen these days. Unless you count the possibility of mafia influence for corporations, risk is negligible for these jobs. Given these criteria, I cannot possibly justify the exorbitant salaries that high ranking officials receive, no matter how successful their employers are.
Politicians fall into an interesting category, since their salary is not necessarily the amount of money they receive in a year. Lobbyists that pool money in order to swing a vote probably account for far more income than what the government pays politicians. If this source of outside income were eliminated, the position still stands to earn a respectable income. I think education is important, since a good politician should know the ins and outs of the law in order to better understand overarching effects of decisions. Government is necessary to avoid anarchy, so I would say that these jobs are more important than food service. Maybe I have only a cursory knowledge of government, but these jobs do not seem remotely difficult. Hard to keep the popular vote and stay in office, perhaps, but relatively easy day to day responsibilities. Politics encompass a huge range of levels and positions, so there are many spots to fill. Much like food service, there are also a number of able bodies to take these spots. Similar to CEO jobs, risk is nearly absent. I doubt that politician salaries would differ much from where they stand today, but lobbyist money should be completely removed from the equation, for both the economic and governmental hazards it poses. That cesspool of corruption and backstabbing should be completely overhauled, but that’s another rant for another day.
Programmers, my occupational brethren, fall into the middle of the road for many categories. Education and experience are vital, since programming is a complex science with touches of art mixed in. A skilled programmer is a vital asset to any company. Given the increasingly high tech nature of our world, coding is quickly becoming more and more necessary. Without it, automation and programmatic innovation would come to an immediate halt. The work, while physically effortless, is extremely mentally taxing. To build efficient software requires planning and execution that cannot be adequately expressed. Though software is extremely prolific, programming jobs are not as available as food service occupations. With the boom of Computer Science degrees, there are a huge number of capable programmers that are unable to get jobs in the field. As with many of the occupations listed here, risk is slim to none.
Healthcare workers are a shining example of an occupation that deserves far more than it is currently paid. Education plays a large role in healthcare, and experience is absolutely necessary. Clinicals are necessary to prove skill, and patients are typically much more comfortable in the hands of someone with many years of experience. I cannot imagine a more necessary field, since healthcare workers save lives and heal ailments on a daily basis. They slave long hours, usually with back-breaking labor, all the while dealing with often emotional patients. Hospitals and doctor’s offices are fairly common, but they should be given that everyone needs medical help from time to time. With the extreme difficulty of many healthcare degrees and certifications, many people are turned away from even attempting the rigors of a medical education and thus the supply of capable workers is rather slim. Risk of contracting disease is a constant pressure on healthcare workers, and they must go to extreme measures to risk spreading these ailments to other patients or themselves.
Hard Figures and Problems
How much weight does each of these categories hold and how many dollars are we expecting to earn?
Though there are plenty of factors I haven’t accounted for, I feel that the above mentioned variables make up a large portion of defining how much income a job deserves. In order to assign a specific salary, I propose we form a scale from 0 to 100 and allocate a number of points to each of these categories. Factors of greater importance should be worth more points. In general, jobs with higher point values should receive a higher income.
To reduce corruption and bickering about jobs being unjustly compensated, every single job position should explicitly list the point values of every category and a breakdown of why these points were assigned. The problem arises, who should be responsible for this? Is a government association enough to handle such a responsibility? Certain political groups are known to favor certain industries over others, which could result in an uneven distribution of wages. Could an independent organization be formed with enough integrity to handle occupation management for everyone?
Once point values for jobs are established, the scale of points to salary could be calculated. In order to form a fair distribution, we could calculate the total earnings of all American laborers and find a median value that serves as the midpoint. Jobs around 50 points should roughly earn this median value. The baseline of 0 points should be minimum wage. With wages receiving a complete overhaul, it may be necessary to recalculate minimum wage as a fair value. The upper bound of a perfect 100 points is uncertain. For jobs so important, so difficult, and so risky, should there be a maximum limit on how much money someone can earn? Would every position with 100 points or nearly that receive the same salary? Should there be a certain standard deviation from the median, outside of which jobs are considered unfairly compensated
Should all jobs of a certain point level receive exactly the same dollar income? Instead, should there be a range for any point level that is considered acceptable and vary based on employee performance or other factors? Do benefits such as bonuses, retirement packages, and insurance count into the salary, or are those calculated seperately? Can we be certain that this doesn’t open of a means of corruption or cheating in which a job can be low in points and receive absurd benefits, or high in points and receive absolutely no extras besides pay?
Many jobs depend on a source of income that isn’t guaranteed. Store owners make money based on how many products they sell. Waiters and other jobs that are not required to receive minimum wage depend on tips. Car salespeople, realtors, and other purveyors of large purchases depend on commission from their successes. Should it be that these workers have accepted the risk/reward of taking such a position, or can we impose special cases for them? If numerous stores fail, we run the risk of removing the means of obtaining certain goods. What measure can be taken to prevent this from happening?
A business doing well can likely afford to pay employees far more than a business that is tanking. Should we base these income values on the monetary value of individual employers rather than a national or regional average? Who gets to pocket the extra money made in a good year, and who pays the penalty for the slow years?
As employees devote time to a certain employer or industry, at what rate does this experience increase their income levels? Should it increase at a certain percentage per year? Certainly there would need to be a cap of some sort, in order to deter the eldest senior citizens from hanging around despite losing skill due to age.
Obviously, such a dense and controversial issue has numerous facets that would need to be ironed out. I don’t have the same skill set or knowledge as economists or other who are intimately familiar with how industry and economy work. Furthermore, people have different personal opinions on what is fair and how things should work. This sort of complete overhaul of our occupation system wouldn’t happen overnight, nor would it be decided on a whim. There should be a number of issues to vote on, there should be studies done to get more information on the matter, and tests should be made in order to judge successes and failures before going large scale.
Overall, I likely have more questions on the matter than I do answers. This post is not meant to define an entire economy. Instead, I write to make you question why any given job deserves any given pay level. Ask question, make your opinion known. I don’t think that fast food workers deserve $15, but some people clearly do. While I may not agree with their opinion, I respect them for making it known. If you don’t like the way things are, seek to change them.
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