I will add that I do not think that differential pay is solely justified by productivity differentials, but also by various other incentives to get people to do socially useful work. I am not sure that one can or should seperate out what percentage of the differentials are due to what.
As to how to show that there are incentive effects that benefit all, we know,a s Yoshie was pointing out, that Soviet-style egalitarianism produces disincentives. We know that neoliberalism capitalism produces incentives, but there almost certainly unncessary differentials. So you play around. You raise the tax rates and see if that has the dire effects the right warns about. You try to create greater equalization and promote moral incentives, see if that helps. I mean, what did you expect me to say?
Personally, I think this talk of equalization of compensation if petty bourgeois idealism; workers don't want it; Marx rejected it. It's liberal guilt. But of course that doesn't mean it might nor be supported with good arguments. As it happens, I don't think so.
--jks
>
>
>A general point about differential pay - it only makes sense (in the Rawls
>formulation you presented) if productivity can be improved to the extent
>that the economy is so much more productive that the standard of living
>increases to the point where being on the tail end of the differential pay
>economy is preferable to living in the everyone-gets-paid-the-same economy.
>And we're talking about more than material well-being here - you also need
>to factor in the social fallout from such an arrangement (the stigma
>associated with low wage jobs which go hand in hand with the prestige of
>high wage jobs, as well as the differentials in decision making power which
>usually accompany pay differences and the way this tends to undermine
>democracy, etc.) That's a tall order, and a case I haven't seen anyone in
>favor of differential pay even attempt to make beyond some handwaving
>claims that IF this burden could be met, then income inequality is
>justified. I want to see some justification. The world as it exists today
>seems to be an excellent argument against differential pay.
>
> >Right, Yoshie, but just because we haven't got the rewards and incentives
> >right now doesn't mean that we shouldn't have rewards and incentives. No
>one
> >on thsi list thinks we have the rewards and incentives right now. No one
> >here who defends differential compensation thinks that the current
> >capitalist market produces defensible outcomes. It's not to the point,
> >therefore, to say to someone like me, who thinks that we should
> >differentially reward effort and achievement, or like Catherine, who says
>we
> >should encourage education by paying the educated more (and I agree),
>that
>
> >there are peverse incentives and rewards built into our current way of
>doing
> >things. However, Yoshie knows this, as her thoughtful post on the lessons
>of
> >perestroika from yesterday shows. --jks
>
>You have to be very careful when deciding on what grounds to distribute the
>excess. For example, let's say you reward productivity. The more
>productive you are, the more money you get, up to twice as much as the
>lowest paid worker (to use the example you suggested yesterday). Imagine,
>just for the sake of argument, a logging operation. What makes a worker
>productive? Certainly effort, but also physical prowess. Some guy who is
>6 ft. 6 inches tall and built like a rock will be more productive than
>someone who is 5 ft. 8 inches and scrawny. Unless the big guy is a total
>slacker, the little guy works will always be on the low end of the pay
>scale. What incentive does the little guy have to work hard? He might as
>well not work too hard since he'll make the same (low) salary in any case.
>His incentive to work has been _reduced_, or at best not enhanced.
>
>This isn't a very realistic example, but the point is generally valid.
>People's capacities vary, and those who are well suited to a given task
>will benefit, not only because of their extra effort, but also because of
>their natural aptitude. I understand that you are aware of these types of
>issues, but they shouldn't merely be glossed over - they need to be
>adequately addressed, because it is a very difficult task to design
>rational criteria for above average pay.
>
>So, I'm curious - what do you (and Catherine and others) propose?
>
>Brett
>
>
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