Understanding the problem
How Are Wages Determined?
Wages are influenced by supply and demand, but also by
bargaining power, the skills a job requires, working
conditions, labor laws, and the availability of
alternative employment.
When a position requires little specialized training
or credentials, an employer may have a large pool of
applicants to choose from. That can weaken an
individual worker's negotiating position, particularly
when the worker urgently needs a paycheck.
A worker's contribution to an organization does not
necessarily translate into higher pay. The amount a
company earns, the value an employee creates, and the
wages that employee receives are related questions,
but they are not the same thing.
The Cost of Living Matters
The costs for rent, groceries, transportation, utilities, and
other necessities all affect whether a paycheck is
sufficient to live on. A job can be essential to
an organization and still fail to provide the
employee with financial security.
The central question is not simply whether someone
has a job. It is whether the compensation for that
work allows the person to meet ordinary expenses
and maintain a reasonable standard of living.
Not Everyone Can Be a Manager
Every functioning organization relies on people
performing a wide range of jobs. Not everyone can
be a doctor, executive, or manager. Businesses and
communities also depend on receptionists, service
workers, clerks, warehouse employees, drivers, and
countless others.
These jobs may differ in their training requirements
and responsibilities, but the people who perform
them still have to pay their bills.
What Is a Fair Wage?
There is disagreement over how best to address
inadequate wages. Raising minimum wages is one
proposed approach; other approaches include skills
development, stronger bargaining power, changes to
employer practices, and greater competition for
workers.
This book presents the author's perspective on
these questions and invites readers to consider
alternatives to the status quo.