Optimal Pay

In these econimically troubled times, people think about what they are paid and a "fair" wage and all that. I have thought about it as well. When are employees underpaid? And when are they overpaid?

THE OVERPAID

These are union workers. Union guys will line up in the hopes of getting work because it pays so well. They even forfeit the chance to work at paying jobs in order to wait for some union guy to call off sick or something. The upside for the employer is that he never worries about filling a spot. The downside is that he is probably getting his ass reamed by both the help and the competition.

THE UNDERPAID

These are your fast food workers who treat the job as disposable. People don't show up. When they do show up, they don't give a fuck. And the manager of the place puts up with the shit because they can't attract better employees. Usually, the manager just does all the work. That guy is underpaid. As for the dirtbags, they are overpaid thanks to minimum wage laws.

OPTIMAL PAY

Optimal pay would be the midpoint between these extremes. A business can attract solid employees and still turn a profit. The employees value the job, but they don't treat it the way a union member would.

A wise person once said that if you pay peanuts, all you get are monkeys. In the job market, there is wage competition, and it this competition that determines what people get paid. So, why aren't people paid what they are worth? I think the answer lies in distortions in this market created by labor laws and laws against illegal immigrants and the presence of unions. I think if you eliminated these elements then wages would adjust to where they should properly be.

What I can say is this. Good employees end up with good pay. When you accept the economics of it all, you find that hard work generates rewards. This is because work and the compensation that goes with it flow to the good. It is what the market wants. The lazy find ways around this market mechanism to be the dirtbags that they are.

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