Category : Books-Non-Fiction

Sub Category : History

How much is my labor worth? Should I demand a higher minimum wage, or demand that the government forces corporations to rise wages at a certain amount per year? This book wishes to answer these burning questions you have. 

The first factor is population. How many people can do that job? In India there are many factories that require hard work, and can often be dangerous; however because so many people can do these jobs, the labor is cheap. If someone tried to open one of these factories in America, without being raided for breaking the law, the wages would be higher, because most Americans work in the service industry, which means unless they import there workers, these shops are less profitable. The population only rises the vaule to the capitalist, not the worker.

The second factor is the wealth of the society. If you were to ask for 5$ to mow someones lawn in the 1890s, you would have been seen as spoiled. Now if you ask for 5$ to mow someones lawn, you would be seen as cheap labor. If you see the price of labor as based on time, and energy, then this would be a paradox, because now nearly everyone has a lawn mower, but back in the 1890s it would be hard to mow the lawn. This is for 3 reasons, but we'll get to those 2 in time. The first reason for this paradox is that majority of people in the 1890s would basically be making 5$ an hour; however now that it's illegal to pay anything less then 8.50$ per hour, in America, that 5$ to mow the lawn doesn't seem so expensive. 

The third factor is the importance of the job. "Why is it we make less, when were working harder then you?" This is because of job importance. The reason why janitors are payed so little is because we don't really need the floors to be clean. The reason why CEOs are payed more then janitors is because that they plan out deals, and help make the company profit. This is also why in the 1890s you wouldn't make 5$, because having a cut lawn wasn't that important. There also social importance, that's why the kid now makes 5$, because his labor is now viewed as important. The janitor is basically the lawnmower of the office. 

The fourth reason is productivity. Why is it that a man who run with a bucket of water to the store, is payed less then the man using the train to trasportoin coal? The man with the bucket works harder, so why is he payed less? If you view the vaule of labor is determined by how hard you work, this would be a paradox, but there other factors that explain this away. The conductor is more productive then the man carrying the bucket. If water, and coal are the same price, then the man is basically carrying a bucket of coal, and the conductor is carrying a couple of carts of coal. This is another reason why the kid is getting payed 5$. Because even if someone cares about lawn care, then that kid has to work for a long time, which is a longer time period without a well cut lawn. Although the kid in the 1890s was working harder then you are, he's less productive. 

The fivth reason is requirements. This is what most people believe control the vaule of labor, but it's just one factor. Wether it's how long you work, how many hours you stay, or how much pre-work it took you to be qualified for this job, it increase how much the worker thinks his labor is worth. The capitalist can vaule this to, but not as much because he's not the one bing hired to do it. 

The seventh factor is profitablity, the more you're promised to bring in, the more they'll pay for you.

This brings us to minimum wage. The capitalist believe the vaule is determined by supply, and the worker believes that the price is determined by demand. Just like in normal supply, and demand, there an equilibrium, which is both how much the capitalist vaules the labor, and how much the capitalist vaules the labor. If the equilibrium is lower then the minimum wage, then the capitalist will buy less then if there was no minimum wage. 

But, what about a minimum rise, were they must rise the mage over a certain amount per year? Well when someone gets a rise this means the equilibrium has rised, and when someone gets a pay decrease the equilibrium lowered. The equilibrium usually rises because of trust, and it often lowers because of trust, but it can be for other reasons. This means that if someone doesn't trust you anymore then before, then they don't believe you're worth more, so the weaknesses of minimum wage still accompany minimum rise. 

The reason why wages differ so much, is because of key factor. Each person has a different key factor, which they vaule you more then any other factor. If a company only cares about profit, you'll be payed as little as possible, but if they don't pay you enough, you will probably leave.