Do you “deserve fair pay” just because you work hard?
posted at 2:40 pm on January 29, 2014 by Ed Morrissey
It sounds like the answer should be yes, but Yahoo’s Rick Newman rebuts Barack Obama after the State of the Union address. Hard work matters, but one has to be working hard at something valued by employers — and forgetting that, Newman writes, locks workers into “the modern equivalent of the Stone Age”:
“If you work hard, you should be able to pay your rent, buy your groceries, look after your kids,” he Tweeted following his State of the Union address — a speech in which he used the phrase “hard work” five times and referred repeatedly to the right of Americans to have a “fair shot” and earn a “fair wage.”
Americans feel strongly that fairness is important. They also disagree about what fairness is, exactly. A free-market economy, however, makes is very clear what fair pay is — whatever somebody else is willing to offer for your labor. And sometimes, it’s nothing. …
The point is very simple: Working hard is great, but if you work hard at something nobody is willing to pay for, you’re wasting your time and digging a pathway to poverty. In real life, figuring out what companies or customers are willing to pay for is tricky, because you don’t just have to guess what that might be today or tomorrow. You also have to anticipate how the market for your labor might change, if you want to develop skills that have staying power. With technology changing as fast as it is, even technology experts aren’t sure what will be in vogue five or 10 years from now.
I’d go one step further, at least in the context of government intervention in this process. Employment is a voluntary association in which the laborer trades his time for compensation from the employer. In a market sense, this should produce some equilibrium on relative value; if compensation is too low, employers won’t find people to do the work, while those who offer more will. The difficulty of the work plays into that, too, as well as the objective value of the work to the organization. “Fair” in this context is completely subjective, and assumes eventually that the worker isn’t competent to make his own decision on how to trade his time and effort for pay.
There are other ways to look at this, of course, from a moral or ethical position which heavily weighs on the employer to refrain from exploitation of labor. But in the end, this is a voluntary association, and government’s role in this case runs more along the lines of preparing workers to have essential skills that make their work more valuable in the market than to dictate terms of “fairness.” Putting the government thumb on that side of the equation will eventually make rent, groceries, and clothing and shelter more expensive all the way around, and leave the workers in the same “unfair” buying power position as when he started.