What does it mean to be paid "what your worth"?

[Stevicus]

So this question usually comes up when discussing minimum wage. When people advocating increasing the wage some would argue that increasing the wage results in people being paid more than their worth.

So, my question to those who believe that minimum wages can result in paying people more than their worth, can you enlighten me, how is the value of a persons work determined?

I suspect the answer some might offer is that is that the market determines the value value of work.

IMO that's problematic, but I'm curious what my fellow posters think.

A few years back, I started a similar thread asking if anyone could justify the "worth" of CEOs, considering how much they make - even in cases where the company is losing money. I couldn't really get much of an answer from anyone. I wanted someone to show me a mathematical equation, showing their work, justifying CEO salaries and the disparity between the front line employees.

 

[PoetPhilosopher]

A few years back, I started a similar thread asking if anyone could justify the "worth" of CEOs, considering how much they make - even in cases where the company is losing money. I couldn't really get much of an answer from anyone. I wanted someone to show me a mathematical equation, showing their work, justifying CEO salaries and the disparity between the front line employees.

I've definitely noticed that RF seems to not have a very high opinion of CEOs.

 

[Subduction Zone]

A few years back, I started a similar thread asking if anyone could justify the "worth" of CEOs, considering how much they make - even in cases where the company is losing money. I couldn't really get much of an answer from anyone. I wanted someone to show me a mathematical equation, showing their work, justifying CEO salaries and the disparity between the front line employees.

Justifying CO's salaries takes far more economics than I know. Perhaps they can be, perhaps they can't be. I have a suspicion that it is the latter, but I cannot prove it.

 

[PoetPhilosopher]

Justifying CO's salaries takes far more economics than I know. Perhaps they can be, perhaps they can't be. I have a suspicion that it is the latter, but I cannot prove it.

I believe that CEO's are especially hated because they can do little physical work, just have the financial know-how and use it, and potentially make more money in say a day, than a hard worker could generate in a year.

 

[Stevicus]

Justifying CO's salaries takes far more economics than I know. Perhaps they can be, perhaps they can't be. I have a suspicion that it is the latter, but I cannot prove it.

I see economics as merely a social science, a branch of philosophy. There is no mathematical precision or anything that can be "proven" using the tools of hard science.

That's why it was a trick question, since too many people try to make it seem like economics is a hard science and that people who criticize capitalism simply "don't know about economics." But for those who aren't aware that economics is a social science, they're the ones betraying their own lack of knowledge.

"Let us assume we had a can opener."

 

[Subduction Zone]

I see economics as merely a social science, a branch of philosophy. There is no mathematical precision or anything that can be "proven" using the tools of hard science.

That's why it was a trick question, since too many people try to make it seem like economics is a hard science and that people who criticize capitalism simply "don't know about economics." But for those who aren't aware that economics is a social science, they're the ones betraying their own lack of knowledge.

"Let us assume we had a can opener."

I would say that it is in a gray area in between. Can a CEO make a huge difference? Yes, look at Twitter, now X. A new CEO ran it into the ground. It may recover. It may not.

 

[Heyo]

I believe that CEO's are especially hated because they can do little physical work, just have the financial know-how and use it, and potentially make more money in say a day, than a hard worker could generate in a year.

Who says we hate CEOs? While that is a position that tends to attract psychopaths, saying they get paid too much isn't hating on CEOs, it's critiquing the system. And "the system" is US type, late stage, casino capitalism. In the rest of the world CEO salaries are reasonable (comparably). Some CEOs are hard working, well educated, highly intelligent people with track records to justify their salary.

 

[Subduction Zone]

Who says we hate CEOs? While that is a position that tends to attract psychopaths, saying they get paid too much isn't hating on CEOs, it's critiquing the system. And "the system" is US type, late stage, casino capitalism. In the rest of the world CEO salaries are reasonable (comparably). Some CEOs are hard working, well educated, highly intelligent people with track records to justify their salary.

Here I think that the stockholders expect CEO's to be miracle workers. They want them to have the company make ridiculous amounts of money. Now many can do that. for a short period of time. Either cutting pay, or avoiding required maintenance can both increase the bottom line, for a while. But sooner or later the best employees leave if pay is minimal or suddenly small maintenance problems become enormous ones.

 

[Heyo]

Here I think that the stockholders expect CEO's to be miracle workers. They want them to have the company make ridiculous amounts of money. Now many can do that. for a short period of time. Either cutting pay, or avoiding required maintenance can both increase the bottom line, for a while. But sooner or later the best employees leave if pay is minimal or suddenly small maintenance problems become enormous ones.

That may be one aspect but it can't be the only one. If it were so the stock holders wouldn't agree on bonuses not coupled to performance. I suspect tribalism/partisanship. CEOs are seen as "one of us", the elite, worthy of privileges and entitlements. They deal with the "other", the unwashed masses of workers who try to cut into the profits by demanding higher wages.

 

[Stevicus]

I would say that it is in a gray area in between. Can a CEO make a huge difference? Yes, look at Twitter, now X. A new CEO ran it into the ground. It may recover. It may not.

In Twitter's case, I'm not even sure if their CEO even wanted it to succeed. I agree that a CEO can effectively ruin a company if they put their mind to it, but there's still the question of where a company's value actually comes from, the workers, managers, or the CEO?

 

[wellwisher]

So this question usually comes up when discussing minimum wage. When people advocating increasing the wage some would argue that increasing the wage results in people being paid more than their worth.

So, my question to those who believe that minimum wages can result in paying people more than their worth, can you enlighten me, how is the value of a persons work determined?

I suspect the answer some might offer is that is that the market determines the value value of work.

IMO that's problematic, but I'm curious what my fellow posters think.

To stay in business and provide jobs, business revenues need to exceed your costs. Labor is one of the largest costs when it comes to smaller businesses. As businesses get larger and larger, they can take advantage of economies of scale. That means they can get bigger and bigger wholesale discounts on input good and services, that they need to run the business, thereby lowering their costs. They can afford to pay higher wages and give benefits and still be ahead. A big corporation can handle a larger minimum wage, but many small businesses often cannot.

Say you own a fast food franchise. You hire a bunch of young workers at minimum wage. To be good fast food, you need enough workers to meet customer needs in terms of quality and speed of service. You train and setup a team that can provide for your customers. All is well and the business cost to revenue ratio is good.

If minimum wage was to increase by say 25%, all you other costs equal, you may need to layoff a 25% of your workers and hope you can get 25% more productivity from the remaining workers to get you cost to revenue ratio back to optimum. The young workers may or may not want to work that hard, thinking this is still the same job. They meet you half way, so quality and service suffer, since there is less total worker hours. This then causes revenue to decrease, until costs are more than revenue.

At the same time, you are in competition with other fast food franchises, from fish, chicken, tacos, subs, to burgers, so there is no time to rest on your laurels. You may not be able to rise prices to offset the extras labor costs. You may now need to work 60 hours a week to keep make up for labor costs with you now often earning a minimum wage per week, to offset costs and stay alive for you and your employees.

Raising minimum wage could be a well meaning act, but it can also be a stunt used to kill small business in favor of the big box stores. Government mandated health care killed small businesses since the big box stores could buy insurance in bulk and lower the unit cost for this new mandated expense. Raising prices also happened.

Small business has to pay full retail for insurance, while already having a much higher starting ratio of cost to revenue. That alone destroyed a lot of small businesses and causes lost jobs, who then have to depend on Big Government, who now gets to grow, feeding off the carcuses. While the rich donors are better off; big box, by getting help eliminating the large number of smaller competitors.

 

[Kfox]

So this question usually comes up when discussing minimum wage. When people advocating increasing the wage some would argue that increasing the wage results in people being paid more than their worth.

So, my question to those who believe that minimum wages can result in paying people more than their worth, can you enlighten me, how is the value of a persons work determined?

I suspect the answer some might offer is that is that the market determines the value value of work.

IMO that's problematic, but I'm curious what my fellow posters think.

Why is the idea of the market determining the value of work problematic?

 

[Kfox]

That is so hard to say. The problem with minimum wage laws is that they have to be very general. For the average person, no disabilities, it can be argued that one should be forced to pay a minimal amount. If one cannot do that then one either does not really need the workers or one cannot afford them. That is the business's fault.

But there are special needs people that want to work, but cannot produce at a profitable rate. I can see exceptions being made for them, but those employers also need to be monitored more closely to make sure that they are not abusing these special needs people.

One needs both basic rules and ways to get around them when there is a good reason to.

Each state is different, but there are almost always exceptions to the rule when it comes to minimum wage.

 

[Kfox]

I agree, but who is going to pay it? Special needs people could get a combination of both money that they earned from a business and state money. I have seen too many programs where it is all or nothing. And the "all government support" is still insufficient and the ability to earn money just does not exist.

I know it is more bother but we need to find a way to help those that need help, but still want to work

I've worked my entire life; but for MY goal. My goal usually involve getting paid, or even learning a skill so I can go elsewhere to get a better job. If somebody else is benefiting from me working towards my goal, why should I care?

 

[Kfox]

If the phrase, "you should be paid what your worth" has any meaning at all, shouldn't someone be able to tell us how one determines the value of work?

This is one of those catch phrases that sounds good, but when analyzed; doesn't really have any type of an objective meaning in most cases.

 

[Kfox]

That can be tricky in some cases. For example a google search turned up this:

For example, Insure.com figures the wage a mom should earn for the 18 or so jobs she must tackle throughout the day is $126,725 in 2022, which is 9.2% higher than the 2021 report's findings of $116,022. And according to Salary.com's most recent Annual Mom Salary Survey, moms should be paid even more — $184,820.May 14, 2023

Completely absurd! Driving kids to school does not make you a professional driver, cleaning the house does not make you a professional house cleaner; all the chores a mother does around the house does not make you a professional at that job.

 

[Kfox]

Also, I have heard of businesses being able to guesstimate how much the "average employee" could bring in, using a bunch of numbers. Online, I have heard about a supermarket that has numbers saying each employee brings in an average of $130,000 for the store each year. Yet each employee probably only makes about $25,000 a year on average. Getting more than that, and a bit closer to that $130,000, would probably require either special conditions, or finding ways to market yourself as being worth more.

There are a lot more expenses that goes into running a supermarket than paying employees

 

[Nakosis]

So this question usually comes up when discussing minimum wage. When people advocating increasing the wage some would argue that increasing the wage results in people being paid more than their worth.

So, my question to those who believe that minimum wages can result in paying people more than their worth, can you enlighten me, how is the value of a persons work determined?

I suspect the answer some might offer is that is that the market determines the value value of work.

IMO that's problematic, but I'm curious what my fellow posters think.

Why is this a problem?

If the market consists of two people, the seller and the buyer. The seller determines what they are willing to sell their product for and the buyer determines what they are willing to pay for the product. The value is determine when they have reached an agreement on the value?

Something like minimum wage takes this power away from the seller and the buyer and sets an arbitrary value. If neither the seller nor the buyer agree to this arbitrary value then no transaction is made. Within a larger market a much greater potential for agreement is found. More transaction will take place. When an arbitrary value is set, then there is a reduced chance for agreements to be made. Fewer transactions take place which suppresses the economy.

If you prefer not to be involved in the process of determining your worth I suppose you find some benefit in letting some government official do this for you.

 

[PureX]

If you hire someone to do a job, they have value because they can do that job. (It's why you hired them.) And they deserve a livable wage in return for doing it. Any business that cannot pay all the people engaged in it a living wage or better is a failed business enterprise and should not be engaged in.

Every human being that provides their labor deserves to be provided a livable wage in return. Otherwise the enterprise they are laboring at is not worth the effort. We humans need to stop wasting our efforts at tasks that only make a few people rich while keeping others in poverty. By definition these are failed and exploitive enterprises that do not serve humanity, but only the greed of a few.

 

[Kfox]

I believe that CEO's are especially hated because they can do little physical work, just have the financial know-how and use it, and potentially make more money in say a day, than a hard worker could generate in a year.

Average CEO pay is $178,000 per year; and much of that is bonus by the company reaching certain goals. Though a lot of money, it is nowhere near the average NFL pay of nearly $3 million.

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Top executives plan strategies and policies to ensure that an organization meets its goals.

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