Presently in the United States we are experiencing a wealth gap not seen since the gilded age. A plethora of explanations exist for this phenomenon, and along with each explanation, one can find solutions that range from libertarian ideals to large-scale social programs. One portion of the problem can be attributed to low wages. With this in mind, it might be useful to consider how we determine appropriate wages for the labors required of various types of work.
Some contributions, or professions, require a wide range of skills. Some professions require a high degree of physical strength and/or endurance. Some require a high level of intellect, while others require a strong emotional foundation that can endure stress. There are also professions that call upon creative abilities and others that call upon leadership and/or entrepreneurial skills. In summation, one could say there are five broad categories of abilities that humans call upon to work. These abilities could be characterized as domains of the 1) physical, 2) intellectual, 3) emotional, 4) creative and 5) leadership/entrepreneurial realms.
Presently, the way we compensate people for their labors often does not reflect the level of difficulty of the work. To some degree, there is a positive correlation between the amount of schooling one needs for a job and its pay, but the number of non-examples is tremendous. Our highly paid athletes and entertainers earn many times more than those who hold doctorates.
With this in mind, let us consider a scoring of occupations based on a scale from one to 10 for each domain, and, using this scoring system, determine fair compensation for occupations. Here is an example for the occupation of bank teller:
Bank Teller — Score 15 (3 + 4 + 4 + 2 + 2 = 15)
Given the five domains with scores from one to 10, the greatest number of points possible is 50. Which occupation would only score a five? Which would score a 50? If you are old enough to recall the commercials with the Maytag repairman, you might agree that this particular repairman’s occupation could be scored as a five. The famous Maytag repairman never had to work. His days were filled with wishing for an appliance to breakdown, but because Maytag made such excellent products, or so the commercial purported, our repairman sat at a lonely desk with his playing cards for games of solitaire to pass the time.
“Maytag Repairman” — Score 5
At the other end of the spectrum there are astronauts. Theirs is a profession that calls upon each domain to its highest degree. They must be in excellent physical condition, have a keen intellect, be emotionally strong enough to work in dangerous and isolated environments, and to accept that they may be killed on the job as many of us witnessed with the 2003 Columbia explosion or the 1986 Challenger disaster. Astronauts need to possess problem-solving creativity to serve them in the event of a mechanical device malfunction, and they must be leaders who can take charge in the event one of their colleagues falls ill or loses their life. For this occupation, a score of 50, 10 points in each category, is appropriate.
Astronaut — Score 50
With this scoring system in mind, work as an astronaut would pay the most, and the sort of work comparable to the fictitious Maytag repairman would pay the least. If points were converted into dollars, with a minimum wage of $25 per hours for those 25 years old and above, the lowest paid occupation would be set at $50,000 per year, and the highest paid at $500,000 per year, assuming full-time work. All earnings above $500,000 could be taxed at a percentage between 99% and 100%. If the president of the United States only earns $400,000 annually, how can we justify allowing others to earn more than 125% of that amount?
The wealth gap in our society, and many others, is not the result of wages alone. It is comprised also of holdings in the form of properties, businesses and stocks. This exploration is not intended to suggest that a change in compensation will rectify the gap, but rather that is part of its solution. Also, it is intended to call to mind the primary purpose of money: a means to exchange goods and services. At present, however, it is serving another purpose for a small percentage of the population. It is enabling some to live as if they were kings, requiring the labors of multitudes. This is how large swaths of the human race have existed throughout recorded history. There were slaves, serfs and now a compensation system that has resulted in a wealth gap not seen in nearly a century. How it is resolved may depend in part in what our society believes to be the purpose of money and how we use it to compensate people for their work.
Just Economics is written by members of the Economic Justice Collective of the Rocky Mountain Peace & Justice Center.
This opinion column does not necessarily reflect the views of Boulder Weekly.