"One theme that I found
especially intriguing in the Mokyr, Vickers, and Ziebarth argument is how some
of our social attitudes about what constitutes a "good job" have
nearly gone full circle in the last couple of centuries. Back at the time of
the Industrial Revolution in the late 18th and into the 19th century, it was
common to hear arguments that the shift from farms, artisans, and home
production into factories involved a reduction in the quality of work. But in
recent decades, a shift away from factories and back toward decentralized production
is sometimes viewed as a decline in the quality of work, too.
That was from the timeless Timothy Taylor. And this:
"There is clearly a kind of rosy-eyed nostalgia at work about the qualities of jobs of the past. Many of us tend to focus on a relatively small number of past jobs, not the jobs that most people did most of the time. In addition, we focus on a few characteristics of those jobs, not the way the jobs were actually experienced by workers of that time."
"After a long delay and plenty of resistance from corporations, the Securities and Exchange Commission
approved in a 3-to-2 vote on Wednesday a rule that would require most
public companies to regularly reveal the ratio of the chief executive’s
pay to that of the average employee."
That from the NY Times.
John Thain,
CEO of CIT Group, said on Bloomberg yesterday that the ruling's
motivation was to appease a populist Progressive position and that
shareholder's don't care about pay differentials. I don't believe that's
really a useful way to think about the rule.
Of course, if we think about promotions as a tournament where
the winner receives a wage higher than his marginal product in order to
motivate all employees to put forth their best effort, then high pay
differentials are "efficient." In such cases, the returns each
subsequent promotion must be increasingly large in nominal dollars to maintain the same relative work incentive.
This might have some truth
to it, but we don't have to decide whether high wage differentials are
efficient or inefficient, just or immoral. A better way to look at it is
whether the information on pay differentials is beneficial to the
decision-making of job-seekers.
If workers value companies with certain wage differentials, then the rule allows for better matching. If society values a more egalitarian pay, then firms with high wage
differentials will have to pay a premium for their labor. In general, more information is better for market efficiencies of all kinds.
I
see this as a labor market equivalent of some consumer protection laws,
like a nutrition label on food (except the gov't here is protecting the
supply side of the labor market).
This kind of information may be relatively unimportant, but at least it avoids more onerous laws which Progressives may easily champion,
such as those which expressly restrict compensation.
