No. of Recommendations: 17
Your mental model is missing A altogether
Absolutely. But it's entirely irrelevant to my point.
B and C live in different places and get paid different amounts, for a wide variety of reasons. That's the issue at hand: It never really made sense in the grand scheme of things, and some of the big reasons for the disparity are going away. The reason that this issue is more relevant than in the past is that a person providing labour now has to compete with people in many different places in the world, not just his/her home town. The shipping container got invented, and it isn't going to go away.
If B is getting paid a lot more per hour than C, that's great for him, and again, it might be for a wide variety of reasons. If I lived in the same country as B I might even be happy to see income distribution in our mutual country so that can happen. But it is not his/her right to get paid more than C, and most especially not a right to get paid more than the actual value of what is getting done.
i.e., it's particularly a concern in this case:
Imagine that B (Bill) adds nuts to the bolts on widgets. A widget with the bolt added is worth $1 more than one without. He is not the fastest guy in the world, so he adds 10 bolts per hour. His labour is adding $10 to the value of the employer's inventory, and therefore adding $10 to the sum total of the wealth of the world. Added information: this work can be done pretty much anywhere in the world. But Bill lives in the US. What should Bill be paid per hour? Stop and ponder the question, seriously.
On the one hand, a basic "living wage" of $15+ would be nice for him. Or maybe he has a great union and he gets paid $55/hour. But the labour he is providing is demonstrably worth only $10. This is true of essentially all jobs: they have only a certain value to the world. The only variable is really how obvious that number is.
Now, maybe he would like to get paid $15 or $55, and maybe I would even support an income redistribution scheme to let him get considerably more than $10, taking the money from somebody else in Bill's country. (if it's a company, then that industry is going to suffer and produce less, hurting global wealth). But I can't see my way to the notion that it's Bill's "right" to get paid a lot, and in particular NOT a right to get paid more than $10 for that value added. Especially since C, a very nice fellow, is ready willing and able to do it for considerably less, making the world better off. Everybody everywhere is better off if Bill does something else for a living.
Yet, due a quirk of history, B lives in a town with fabulous unions where he and his mates have been conditioned to think that a job like his is worth $55/hour, and that he has the right, goldarnit, to be paid at least that much because his dad was. He is going to have to learn, one way or another, that it ain't so. The period of basic manual jobs (as at GM) getting substantially above-median wages was, I think, a one-time historic anomaly unlikely to be repeated except in the most transient of times and places. My cousins worked at GM Diesel most of their working lives and got paid way more than I did (until the plant closed in 2012--surprise, surprise). But economically unsustainable jobs like that are unlikely to be common in future.
Jim
