Here’s a shocking bit of news: wages, after decades and centuries of market pressure, haven’t equalized! How can that be? In a reasonably efficient market, shouldn’t the forces of supply and demand bring all wages into parity? Or, more logically, shouldn’t the least desirable jobs command a premium? But contrary to the laws of economic science, equality doesn’t exist and, most extraordinarily, the most desirable jobs actually pay more than the least!
According to the US Bureau of Labor Statistics, the median wage and salary of top executives is $158,560 plus many perks; for electricians $46,425; architects $70,320; retail salespeople $20,508; dentists $142,870; and cafeteria cooks $22,210. Is this not stark evidence of a malfunctioning market? According to the laws of supply and demand, there must be a vast shortage of people trained to be CEO’s, dentists, and architects; and a correspondingly immense oversupply of retail salespeople and cafeteria cooks. We can’t blame this inefficient allocation of resources on some temporary phenomenon or shock; it’s been going on since records exist.
The answer to this puzzle, though, seems pretty clear. The reality is that there’s little basis to think of labor as a market. High income jobs are high income because of some combination of their traditional status, monopolistic barriers to entry, or union collective bargaining. Low paying jobs lack these protections.
The focus today is on the aristocracy of the top 1% and that’s certainly where the grossest injustice occurs. But we shouldn’t ignore the reality of a labor aristocracy that’s far too often glorified as the holier than holy “middle class”. Those supporting the concept of a “middle class”, though, are necessarily fighting for wage differentials unless one takes the position, which I do, that everyone should be “middle class” and cafeteria cooks and retail salespeople should earn the same as dentists, architects, and CEO’s.
There’s no moral or economic basis for wage differentials (cost of schooling and job hazards aside) and the ultimate goal, in my opinion, must be to assure that everyone willing to contribute to society shares equally in the rewards.