To: WSFAlist at keithlynch.net
Date: Thu, 4 Apr 2002 19:42:08 -0500
Subject: [WSFA] Re: equal pay
From: ronkean at juno.com
Reply-To: WSFA members <WSFAlist at keithlynch.net>

On Thu, 04 Apr 2002 11:36:11 -0500 Steve Smith <sgs at aginc.net> writes:

> ronkean at juno.com wrote:
> As I understand economics, wages in a free market tend to be set by the

> forces of supply and demand, and employers who insist on making
> irrational wage offers are working against their own economic success.
>

> This is pure Libertarian theology, and has no particular
> relationship to reality.

I think it's generally accepted economic theory that supply and demand
set wages in a competitive market.  Employers who don't offer what an
employee is worth in the market will not succeed in hiring the employee.
It seems logical, not theological.

> In the 1960s, I heard exactly the same argument against
> civil rights laws.

There are different kinds of civil rights laws.  Laws which compel
government to treat people equally, regardless of race, religion, gender,
etc. generally do not violate any individual's rights.  But laws which
seek to compel private individuals to treat all others equally, though
well-intentioned, can interfere with freedom of association, and lead to
disputes which can be very difficult to resolve fairly.  Perversely, such
laws have led us to racial quotas, which institutionalize racial
discrimination.  Much of the segregation which formerly existed in the
South was imposed by state law - such laws interfere with freedom of
association.  A free market naturally discourages bigotry in commerce.

As to "morale", it has simply never been a
> consideration
> anywhere I've worked.  Term now is "motivation", and it basically
> translates as "I want the bricks without straw by tomorrow noon, or
> you're fired."
>

Employees should have the option to quit, just as employers should have
the option to fire employees, subject to contract.

> As to the "economic success" of a business, the differences in
> labor costs between men and women (or blacks and whites) is in the
"petty
> chiseling" category.  You want to lower labor costs?  Move the
> whole operation to Malaysia.
>

Free trade enhances prosperity, as Adam Smith pointed out.

> Anybody who's ever dealt with the higher levels of a real
> corporation knows that it's run, not by economics, but by ego.
>

Ego is always a factor, and business decisions are not always rational.
But rational decisions should yield better results than irrational ones.
Free markets reward rationality.

Ron Kean

.

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