Tuesday, December 12, 2006

A Living Wage

The idea of paying employees an amount they can actually live on is gaining a little traction these days. As someone who has existed in a job that some might consider to be far beneath my educational and age level, I have considered the employer-employee relationship from many angles for many years.

As a full-time employee, you represent an expense in payroll, but -- hopefully -- an asset as a functioning part of the business. The employer will want to dish out as little as possible in cash. But many factors control how much an employer considers enough.

If someone has hired you to work full-time, that means they have purchased all your available work hours. Theoretically, the rest of your time should be your own. In order for you to show up at opening time each and every working day, your employer pays you to exist.

You may enhance your value to society through activities you do outside of work, but unless they benefit the employer in some tangible way, they don't merit an increase in salary. An employer may choose to reward what they view as good character with higher pay, but the business must generate enough revenue to allow for this. Otherwise, you're both goin' down in that brotherly embrace. Enjoy it while it lasts.

In reality, people with so-called full-time jobs choose or are forced to work extra jobs in some circumstances.

If all goes well, an employee who can actually afford to make a living at whatever he or she is employed to pursue will stick around for a while, steadily getting better and better at the job, working more efficiently, generating more revenue for the business. An employee who has to work multiple jobs will have less attention for each one and will slowly or rapidly break down. That helps no one.

Even in capitalism, wages and salaries represent a division of the income from an enterprise. The income is based on the market, which often has very little to do with the absolute value of the enterprise to the greater good of humanity. The workers in that field have agreed to work for a rate based on the average revenues that enterprise brings in. They fall on a hierarchy determined by the various tussling groups trying to wrest a share of the take from the whole pile.

To some extent, these income ranges become institutionalized. People go into a field with a rough idea of average incomes for various functionaries within it. A change in demand may lead a change in compensation by quite a bit. Or the change in demand could send a seismic rumble across that whole economic sector as it grows or shrinks abruptly. Without a massive change like this, people in the field look for some sort of growth to make them feel like they are progressing.

Competition between products can be a healthy driver of innovation and an incentive to keep prices down. But people also feel competitive about their compensation, the income and other perquisites that they receive, if not earn. This drives costs and prices the other way.

Meanwhile, all kinds of people are just trying to live. While I'm absolutely sure there are many reasons for the cost of living to rise, I'm not at all sure most of them reflect terribly well on human nature. Are the jobs created by a billionaire building his sixth house offset by whatever other plagues might have been released to get those billions?

The threshold of a livable wage will continue to fly upward until we rethink our whole approach to work and reward. The answer can't be a uniform mob of gray-clad people in gray cubicles in big gray apartment blocks any more than it can be road-raging suburbanites shouldering each other off the six-lane boulevards of their bedroom community as they hustle home to the tract mansion, aspiring to be richer, driving more expensive cars to bigger houses in more comfortable climates. It's not sandal-wearing subsistence farmers in sod huts, owning next to nothing because it's the right thing to do.

Meanwhile, we're just trying to live. People who are satisfied with less still have to fight the destructive fight to hang on in a world where hard-driving consumers are demanding more.

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