
How do people justify earning more than others? - edward
http://www.bbc.co.uk/news/magazine-33613246
======
Patient0
I wish someone in the article had said something like this:

We live in a society where individuals are mostly free to negotiate salary and
compensation with whoever they choose to work for, and employers are in turn
free to negotiate with who they want to employ.

The actual compensation then comes down to a mixture of supply, demand and
negotiation skills. This can often lead to "unfair" outcomes - but we've found
that alternative systems in which prices and wages are externally regulated
result in everyone being worse off.

Why is this so? It is not so much to do with how _hard_ people work, but how
much risk-takers are compensated for taking on risk. If risk takers aren't
adequately compensated (and for sure, part of what they are risking is the
time they are spending), it becomes irrational for _anyone_ to take on the
risk, and so no-one does. Then, everyone is worse off.

To give a concrete (but arguably overly simplified) example: During the
industrial revolution, there were lots of different attempts at making more
efficient steam engines. It wasn't possible to know up front which designs
were going to work and which weren't. But people were motivated to _try_ lots
of different things, because they knew that if they succeeded, all of the time
and money spent researching each failed attempt would be more than paid for
once they succeeded. Without that compensation though, it doesn't make sense
to even try, leaving everyone with the inefficient steam engines.

~~~
pbhjpbhj
Your concrete example doesn't work.

In a system of equal wages you'd still get paid for developing your steam
engine even if it didn't work - the safety net means that engineers won't have
to take a risk (beyond wasted materials) in order to develop new designs.
You'd need a central bureacracy [which is the problem] so you could apply to a
group akin to the InstMechEng and they would asign finances for your project
or not (or you could self-finance if the costs weren't too high).

It also however means that when they make the new design everyone can benefit
rather than just them. For sure, some people will consider it only worth
working to improve things for themselves and so refuse to work to make new
engineering advances.

A better example you could give IMO would be something like coal miners. "No
one would want to work in a coal mine, as it's high risk, if the reward is the
same as working in an office as that's low risk.". I don't think it's true,
some people will still want to work manually, despite the risk - people take
risks for pleasure so the economics are far more complicated than "people only
take risk if there's greater financial compensation".

It's a source of sadness for me that one might feel the only reason to do
something is to have more than other people rather than to give more, to make
everyone's world better. Greed is hard to combat, I certainly haven't managed
that, but it's not the only motivation to work.

~~~
objectivistbrit
"You'd need a central bureacracy [which is the problem]"

It's more than a problem - you couldn't implement such a system without a
totalitarian state.

"It's a source of sadness for me"

It's a source of sadness for me that you haven't thought through the details
of your plan to "make everyone's world better".

~~~
pbhjpbhj
"one might feel the only reason to do something is to have more than other
people"

Are you saying you do ascribe to this position, that your only motivation to
work is to get more money (and by extension luxuries) than everyone else has?

My plan, which I haven't mentioned is to guard against my own tendency towards
greed and basically follow Ghandi's maxim of "being the change you want to see
in the world". Do you have specific objections to that plan?

~~~
objectivistbrit
"Are you saying you do ascribe to this position, that your only motivation to
work is to get more money (and by extension luxuries) than everyone else has?"

No. I never said anything like that, and you are arguing dishonestly.

(For the sake of other readers: the goal of work is to achieve eudaimonia,
productive happiness. The false dichotomy between "material greed" and
"spiritual self-sacrifice" causes massive and unnecessary misery. See the
books in my profile for details).

"Do you have specific objections to that plan?"

The change you said you wanted to see in the world was everyone earning the
same wage. Here's a specific objection: let's say I'm a plumber living in your
utopia, and some of my neighbours complain that InstPlumbing is often slow
fixing their pipes. Though it's a fair bit of work, I'm willing to do it
myself in exchange for a few of their hoarded dollars (or cigarettes, or
whatever), which I later barter for extra bread rations for my kids. Whoops,
now I'm earning more than other plumbers and we have inequality again.

Should I be banned from performing this greedy, selfish activity? And how are
you going to stop people from engaging in such voluntary trades without
totalitarian surveillance?

------
eulji
95% of us are doing shitty low IT as well so please do not pretend we are
better than drivers or cooks. We are not.

5% of population is working on really groundbreaking stuff. We are just lucky
we are in demand but our time will come as well and then those Senior Software
Engineers that brag about how they are rich and successful will be useless
once again.

95% of software is pure s...t so please show some respect.

The more I work in IT and meet more people the more I appreciate "normal
workers" that take care of our stomachs,clothing,trash and so on.

~~~
nailer
> 95% of us are doing shitty low IT as well so please do not pretend we are
> better than drivers or cooks.

I don't think anyone is saying we're better people. Programming - even basic
programming - is harder than driving a car.

~~~
eulji
That does not mean it's more useful than being able to drive a car properly.

It's pure capitalism I get it. I like capitalism okay ? I live in a socialist
corrupt hellhole.

Even if it's harder that does not mean it's more useful than to drive car
properly.

That's why the rich countries are outsourcing to cheaper countries so much.

How do you justify 150k salary in US vs 25k salary in India ? Different costs
of living ? Yes and no. In many poor countries some stuff is just more
expensive than in the richer ones.

~~~
nailer
I'm actually surprised people are asked to justify why harder jobs should be
paid more.

Someone considering that they deserve the same as someone else for doing and
easier job is a kind of entitlement. I'd like to see someone justify that.

~~~
Nadya
_> Someone considering that they deserve the same as someone else for doing
and easier job is a kind of entitlement. I'd like to see someone justify
that._

I'd like to see someone provide a reason why anyone would pick the "harder"
jobs if they were paid the same.

If I could choose between a job digging and filling holes all day or a job
where all I do is play video games - I'm not sure many holes would be dug.
Extend this to hundreds of "easy" jobs and hundreds of "hard" jobs and it
makes one wonder how many jobs requiring physical or repetitive labor wouldn't
exist.

------
iagooar
I think the article misses the point. Since when do you need to "justify"
getting a salary that is above average?

I see it as simple as: I wanted X, I was offered X-10%, we settled on X-5%. I
don't need to justify anything, to anyone.

~~~
octo_t
When your X is double, triple (sometimes even quadruple) the national median,
I think you need to justify why you wanted (and felt entitled to) X.

~~~
fieryscribe
Why? If someone is willing to offer me X, they value what I can do at X (or
more). Why does that need justification if it's some multiple of the median?

------
estefan
> Finn Brennan, who drove London Underground trains for 23 years and now works
> for union Aslef, says drivers deserve their £49,673 annual pay because they
> do a "difficult and skilled job".

> He says they start work as early as 04:45 and finish as late as 01:30,
> working eight-hour shifts in a "small metal box underground" \- conditions
> he says would be considered "cruel and unusual punishment" in other
> circumstances.

And yet whenever LU try to automate them they go on strike. Guess it can't be
that bad after all. I wonder if he can say "hypocrite"...

~~~
harperlee
Eh, it's not inconsistent to have a very bad job, and that such a bad job is
better than no job - the same way that one is not a hypocrite for not quitting
from a bad job. People generally need money to have shelter, food, healthcare,
education, etc. for themselves and their family. Do you think these merit
sacrifice?

~~~
estefan
That would be something they should discuss. Instead, by striking and getting
what is a well above-average salary, it could be argued they are perpetuating
the suffering of future workers to have to put up with those conditions, on
account of having created a very attractive 'pull' in the form of a good
salary.

There could perhaps be some way of bringing in automation, moving existing
employees into different roles for the remainder of their careers and
therefore satisfying both aims.

Instead, from the outside, the tube unions seem to go on strike every other
month. I don't see my water, gas, electricity or internet connections being
switched off because workers at those companies are striking. Tube workers
seem more than happy to inflict financial damage and inconvenience on the
other 8 million people who live in London and who depend on them. Apparently
they don't care that their actions are likely to be having a much more
damaging impact on those Londoners on average salaries (as well as the large
numbers on below average salaries).

I know someone on the breadline who works all hours and makes an absolute
pittance. One day of not being able to go to work for someone in such a
situation can literally risk their job, rent and ability to feed themselves.

I find the actions of the - by comparison wealthy - Tube unions generally
disgraceful.

------
Rainymood
I have spent the last X years studying hard and earning good grades. I still
have nearly 5 years (planning on getting a PhD after this terminal MSc) left
of education ahead of me. Why do I do this? Because it makes me entitled to a
higher pay? No. I do this because I enjoy studying.

Am I entitled to a higher pay? No! But I have spent the last X years NOT
earning an income. The longer you are working to amass a certain skill set the
longer you defer income you could have earned. It would be nice to recoup
that.

Not everyone can do what I (and my fellow) peers can do and thus we have some
sort of leverage in an interview. I demand X, they offer Y and then I can
negotiate because I have certain skills they want. If they want skill set Z
and there are 100 people lining up in front of the building with exactly the
same skill set they can just say find the first person that agrees to their
abhorrent demands.

Does a higher education make you entitled to a higher pay? No. It's all about
supply and demand.

This post has become kind of ranty, long, and unstructured. Sorry.

~~~
zo1
It's also about value, not just supply and demand. Your extra X years of
studying most likely includes increases in the value that you can provide a
potential employer.

------
agentgt
_> So as pay goes up, workers may feel less and less like they're getting what
they deserve._

I remember an anecdotal story told in a social psychology class (sadly many
many years ago) where a psychologist is annoyed with some kids playing in
their yard. So instead of telling them to stop he/she pays them each a quarter
($0.25) and tells them if you come back tomorrow I will pay you $0.50 to play
in the yard. The kids do and he repeats his promise but raises the pay to a
$1.00. The kids come and the psychologist pays them. The final day the kids
come but the psychologist tells the kids he is all out of money..... What do
the kids do?

They stop playing in the yard. Something they did for free they are not
willing to do anymore because they are no longer paid.

Sadly I can't remember what theory the anecdote was teaching (maybe
consistency theory?).

------
lukasm
Well this demonstrates how economically illiterate people are. What matters is
market rate and how well you negotiate. The rest is part of market rate
equation or irrerevant.

~~~
fsloth
Those are not the only variables affecting leverage when negotiating pay. As
reference see Hollywood actor paychecks after and before Michael Ovitz and
CAA.

~~~
lukasm
Yes they are. He negotiated market rate for the actors.

~~~
fsloth
Ok, if we take this wide view then yes. But "market rate" is not always a very
descriptive when discussing pricing in general because there are often time
corner cases where the phenomenon that's actually important is not captured by
it. I.e. in market situations where the price can be effectively agreed in an
oligopoly then the discussion about oligopolists' pricing has a social context
as well, and things like "political leverage" are far more important in
studying the phenomenon in larger context than just observing the preset
"market rate".

------
Havoc
I've made peace with the fact that life isn't fair...and work hard to be on
the right side of that coin toss.

------
nxzero
Funny thing is the opposite is true too; if you make less than others, at some
point people expect an explanation.

__________

Even more bizarrely, if for some reason people believe you're doing "nothing"
they rapidly switch to projecting their expectations of what doing nothing
means to them.

In the end, it's just hard for people to understand that some people are
different than them and the answer is not to suggest everyone be the same.

------
cubano
I wouldn't even attempt to justify this in a market-based economy...earning as
much as you can to _take care_ of yourself and your family and _shelter_ them
from the vagaries of life is kinda the point, right?

Actors acting in their interest to maximize happiness and well-being is the
basis of all modern non-Marxist economies, and every metric related to those
goals shows that this albeit-non-perfect-system works pretty damn good.

There really isn't any point in rehashing the 160yo Marxism v. Capitalism
argument here, I know, but there is almost zero evidence that _in a wildly
diversified and large society_ (not Sweden or Denmark, for example), that a
government-controlled economy can bring happiness and well-being to its
people.

~~~
kuschku
Wildly diversified and large society?

As far as I remember Germany has 1/3rd of the population of the US – and a
social democracy very similar to Denmark or Sweden. And Germany has large
immigrant populations as well.

Could you explain why this concept can work with 80 million people in Germany,
but not, say, the 40 million people living in California?

~~~
cubano
Germany is a complex and rather unique blend between both systems, and frankly
wasn't really that diverse until rather recently with Merkel's high-volume
immigration policies.

The US has a plenty of "safety-net socialism" as well, so I'm not sure of your
point you are making about CA..a country that almost doubles its national debt
($12t to $20t) in only 8 years is surely doing its best to provide for its
people, no?

For how many generations is that possible before the country bankrupts itself?

~~~
kuschku
> frankly wasn't really that diverse until rather recently with Merkel's high-
> volume immigration policies.

That’s not true.

The current influx of foreigners is about an order of magnitude smaller than
the influx of foreigners from Turkey during the 70s.

------
stkni
This topic is explored in Michael Sandel's book Justice[1]. IIRC his
conclusion is that we are products of our environment and as such we owe a
debt to the environment that helped create us: university, school, parents and
not least of all the society that helped to build everything that came before
us.

So the question should not be how do you justify earning it but just how much
can you justify keeping it?

Kind of lefty, I know, but it's Friday :)

[1] [http://www.amazon.co.uk/Justice-Whats-Right-Thing-Do-
ebook/d...](http://www.amazon.co.uk/Justice-Whats-Right-Thing-Do-
ebook/dp/B002RUA4XE?ie=UTF8&ref_=dp_kinw_strp_1)

~~~
wiz21c
I prefer a lefty guy on a friday than all those cynical-I-deserve-to-be-rich-
they-deserve-to-be-poor guys on monday, thursday, wednesday, tuesday ...

------
facepalm
I think it should be the other way round: if somebody thinks somebody else is
being paid too much, they should have to explain why they think that is
possible. That is, there has to be a market failure and they should explain
what caused it.

Often the envy seems to be about jobs where people have little idea of what is
involved. For example in banking or being a CEO. I guess most people have a
rough idea of the importance of a doctors skill, so they complain less. I also
see few complaints about artists earning millions of dollars. How does Beyonce
justify her income - maybe she should be replaced by some random street
musician?

~~~
whatok
People absolutely complain about artists earning millions of dollars. Do you
remember Lars and Napster?

~~~
facepalm
To be honest, I don't remember. I know Napster, but not Lars.

------
anonymfus
How hedonic adaptation produces just world assumption.

------
vintermann
Instead of talking about money, turn it into man-hours. How many regular
people do you deserve working full-time for your personal benefit?

I think that puts claims on millions of dollars in perspective. Of course,
given global inequality, most of us here probably have more than one full time
servant-equivalent working for us.

------
aaronhoffman
Supply vs Demand x Potential Benefit of your position?

------
fche
How do people justify asking such stupid questions?

