Wealth Distribution in the USA

Why shouldn't wages be set by the market? What calculations determine the value he adds? How can you say the value he adds is actually 2-3 dollars per day if someone else can do the same job just as well but for only 1-2 dollars per day?--Percy

Could you flesh that argument out a bit?

Is this person a slave?--Percy

The same thing they did before the employer moved into town.When a company builds a new factory in a low wage country, workers beat a path to their door because it beats the alternative.--Percy

So you believe people should be paid according to their needs rather than the value of their work.--Percy

Really? What was he doing before the employer built a factory in his country? Did the employer build the factory only by destroying the job he used to have?--Percy

You must have missed my point, maybe you took the reference to slavery too literally, let me try again. Did he accept the job of his own free will, probably because it was an improvement on his previous job? And can he leave it of his own free will? The value of anyone's work is what someone is willing to pay.--Percy

Not even close.But you were pretty clear about believing that people should be paid according to their needs rather than the value of their work.--Percy

Well, since you bring it up, yes, you're advocating the half of communist idealism that advocates paying people according to their needs. Again, not even close.--Percy

I agree that you should do that.

I don't agree with the label you're assigning me, but my theory is more accurate because my math works and yours doesn't. Value is determined by markets, not by politicians or bureaucrats. Of course the regulatory environment is part of the competitive landscape, but if, for example, the minimum wage rises to $20/hour, people working at jobs worth substantially less than that will no longer have jobs because employers will no longer offer those jobs. That's because value is determined by markets.--Percy

If that had even an iota of a smattering of truth than diamond cutting would be one of the most lucrative occupations in the world. But the value of a diamond cutter's work (leaving aside the inevitable differences in skill) is set by the supply/demand curve for diamond cutters, not by the amount the diamond increases in value when they're done.--Percy

Your final paragraphs rebut an argument I wasn't making. If he has sufficient reality for someone to base an argument on him receiving $2-3 an hour, then he has sufficient reality for me to point out that if one removes the employer then he's worse off.It doesn't take any great sense of compassion to judge that it isn't fair when wages are too little, and I'm with everybody on this. It isn't fair that we were born in wealthy countries instead of Bangladesh or Burma. Even in our own countries, it isn't fair that some of us were born to families who could afford to send us to college and some weren't. It isn't even fair that some of us are born with inherent qualities that enable us to earn far more than others. But it is a leap of not only illogic and irrationality but even worse of really, really bad math to believe that fairness demands that a job's worth be at least equal to a person's needs.Government can play a significant and important role in remedying the inherent unfairness of the world through laws and regulations and treaties and tariffs and so forth, and I think some European countries do a very good job of this. But that doesn't change the fact that markets (which are always strongly influenced by regulatory environments) set values. Compassion doesn't demand that we forget our math skills.--Percy

No, no, of course not. I thought your statement that, "...the laborer's wage is a poor proxy for the value the laborer has added to the materials," included an implicit, "But they should be equal." I don't think anyone is suggesting this. Workers contribute value equal to their wages.--Percy

The value of a worker's labor is one thing, his contribution to his company is another. Consider the diamond cutter again. His company pays him $500 for a days work during which he transforms a $1000 rough diamond into a $10,000 cut diamond. The value of his labor is $500. His contribution to the company's value is $9000.Your side in this discussion has a completely unworkable notion of the value of labor. I used the diamond cutter as an example because it is so easy to understand how much he is paid and how much the value of the diamond increases, but most contributions to a company's value are not clear. What is the contribution to a company's value of the night watchman, the delivery truck mechanic or the computer repair guy? You just have no idea. Even the companies themselves can't break it down with any reliability.But we do know the value of the employee's labor - it's equal to their wages, and wages are largely set by market forces.--Percy