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View Diary: "People are poor because of the bad choices they make" (39 comments)

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  •  Do you contend that (0+ / 0-)

    wages are allocated fairly between capital/owners/executives and labor?

    That is my point: the structural problem is not in people's training or ability, but that not enough of the profit made by labor is passed on to the very people who made it.

    Should a CEO be paid 500 times what those laboring on behalf of his company earn?  Is that part of the structural problem of our economy?

    •  The problem I have with your premise (1+ / 0-)
      Recommended by:
      VClib

      is that it assumes someone, or some entity, is (1) defining what is a "fair" allocation, and/or (2) doing the allocating for all of us.  

      For example, I think the owners of a company are the ones who get to decide what is "fair" compensation for the CEO of the company.  I don't think some external person or group or agency gets to decide, for a privately owned company, what is "fair" compensation.  The shareholders of Apple are the ones who get to decide how much Steve Jobs was worth to that company, not you or me.  If I think he's paid too much, and I own shares, I sell my shares.  If enough people do that, stock goes down and the company loses money.  If the owners of the company are happy with their return on investment and are happy with what Steve Jobs was paid, they stay put.  The point is that it is their decision, not mine.  And Bill Gates is a billionaire because he created a company, not because anybody decided whether or not he was "worth" his income or because anybody decided what his income should be.  

      Labor is priced like anything else in a capitalist society -- by supply and demand.  It is very hard to become a brain surgeon -- you have to go through years of education, training, etc., and few people can, or are willing to, do that.  So they are paid very well.  Same for jobs like engineers (the best degree to get right now).  When you say "engineering," most people think "that's too hard" or "I'd rather poke my eyeballs out."  So people who are willing and able to be engineers get more money.  

      On the other hand, I can find a lot of people with the ability to work in a fast food restaurant, or to do simple unskilled labor. So they aren't paid well.  

      In our society, what has been happening is that our information age has meant that we, as a society, put more and more value on knowledge as a commodity and less and less on unskilled labor as a commodity.  WE are generally willing to pay more for knowledge than for labor, because knowledge is scarcer and more profitable, generally, for a business, and labor is more plentiful and not as profitable for the business.  I don't know how to reverse that.  We pay more for the engineer (knowledge) than we do for the person who cleans the office (labor).  It's a growing pain, like the kind the country went through with the Industrial Revolution.  

      Whenever I hear someone talk about an "unfair allocation" of income or wages, I always ask, the following, and I'd be interested in your answer.  How do YOU propose income be "allocated"? Specifically, who should have the power to do that allocation, and what criteria should he or she use to decide how much money you, or I, or anybody else, should make?  That's always the problem I have with someone talking about "allocating" wages or income.

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