Value of labor?

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This subject all over the place. You see people spending a lot of their energy yet getting very little in return except burning a few thousand calories so their bodies might be a bit healthier although the trade off can be stress and damage to sensitive areas.

Then there are those who's day consists of shuffling a few pencils and an odd paper here and there yet they get paid something like $300 an hour.

Every monetary value in between can be found across the line.

You got your sports people and entertainers who are able to convince people their labor is worth much, much more than anyone else's and folks are more than willing to buy that fallacy time and time again. So, they get paid the most per hour simply because they have their bluff over the most.

So how much is our precious energy really worth?

It's worth whatever somebody else will pay for it.

There is nobody who gets 300$/hour for shuffling pencils and papers. But 300$/hour does sound about right for a good lawyer. You don't get paid for shuffling a pencil. You get paid for knowing exactly what to write with that pencil based on acing the bar exam and winning cases because you understand the law so much better than a non-lawyer (or a bad lawyer) could ever bear to.

People who get 300$/hour know things that other people don't know. That's what they get paid for, not the medium (pencil and paper) that they use to convey that knowledge. Knowledge is a valuable commodity and people who get paid for it (not just lawyers) are doing far more than the mere expenditure of calories.

Skill is another valuble commodity. The plumber didn't overcharge you. If it was possible to do it yourself, you would have.

Highly paid sports stars and entertainers? Their labor is worth so much more than other peoples' (for those who are at the top) because people put such a premium on being entertained. Once they cease to be considered entertaining, the money stops. Their pay is in direct proportion to how many people they can sucesfully entertain at a time.

This isn't a moral thing. It's a market thing. If people really put children's education first, teachers would get paid more. But entertainment is top priority.

A lot of times you can study and know as much as them, though. They get paid so much because they have created a system that ensures they will get paid that much while others who have gotten paid less have not created that system.

Take higher education, for example. It has a system around it as well, meaning, you cannot set your own price, so it has nothing to do what people are willing to pay. It is simply what they must pay in order to access higher education.

I notice you have some naive faith in the world, Janissy, and you take for granted everything is fair when in reality, people want money and are willing to go the extra effort to be sure they will always be able to get their hands on it. It's not just a matter of saying, looky what I can do, it's different from what the other guy can do so give me a thousand dollars.

Labor is a commodity, something that is bought and sold. It's price is determined by supply and demand, just like any other commodity.

ruveyn

Labor permeates all other commodities. It's unique in that regard. Meaning, for the other commodities to exist, you must have labor first. You gotta plant and harvest the crops, chop and mill the lumber, mine the coal, drill for gas, feed the livestock. All that has labor as its foundation.

What you say is true, but that does not change its commodity nature. In a market economy labor is bought, sold or stolen (as in slavery).

ruveyn

It doesn't behave like a true commodity because there are so many variables in the value of it. All it takes is a formula and suddenly someone's labor is worth a lot more not because of what he does, only because of the formula he uses.

I work in law.

Often I have heard newly hired legal researchers say they make more much more in law than they did in engineering.

They will work a few years in engineering, change to legal research and make more money than the head of engineering does at their old employer. Twenty year olds can easily make 100-120k/year in legal research, but that is hard to make in engineering.

In an ideal world you'd want to be paid enough money so you could run a family.

I really don't think you can. Not all the knowledge comes from books(or other study-able media). Much of it comes from experience. No matter how much you study, you will never know as much as somebody who has the experience of doing it for years and has learned things that never got into the books.


Have the people making the money actually created the system? Sometimes they have created part of it. Sometimes others have created part of it. Law would not be so layered and convoluted if nobody ever brought lawsuits up or insisted that some things be legal whereas other things are illegal. Every time somebody says "there oughta be a law" and then convinces government to make one (I left out several million steps but still...) another layer of convolution gets added.

To step away from law, look at medicine. It sure is expensive to get treatment. But was this created by doctors? What about insurance companies? And back to law, how much of the price is because of malpractice suits? There are systems enmeshed with other systems and no single entity creates them all.



You can't set your own price (you can't set your own price for any commodity) but you can decide who you want to buy from. If you want to access the same 100 most popular colleges in the world that everybody else does, then you will have to pay stratospheric tuition because everybody else wants to buy the same thing. But for a fraction of that price you can go to a community college and access their higher education.


I am well aware that not everything is fair


And this is where we differ. You are only looking at people getting the money. You aren't looking at people spending the money. Every person who got a lot of money (excepting straight up crime) got it from somebody who was willing to spend it on them. You say 'people want money and are willing to go the extra effort to be sure they will always be able to get their hands on it' and thinking I naively disagree with you because I think the world is fair. But I absolutely do agree with you. I just extend that point to the people paying as well as the people getting the high salary. An NFL team doesn't sign a multimillion dollar contract for a star player because they have been railroaded by a system the high paid players designed. They pay the multimillion dollars because they have reason to believe that they will get every penny back and far more from the revenues that the player will bring in. Nobody pays a high salary to somebody else unless they have reason to believe they will get full return on that investment. And it is an investment.

Last edited by Janissy on 09 Mar 2015, 10:54 am, edited 1 time in total.

I got curious about this because both are knowledge workers with a knowledge base that takes considerable effort to acquire. So something must be driving the differential.

Google found some interesting tidbits.

http://www.ign.com/boards/threads/question-about-salary-engineer-vs-lawyer.116976106/




So that's interesting. Going from engineering to law really is a thing.Also maybe the differential isn't quite so great once you factor in the extra cost of law school both in terms of tuition and in terms of not earning the engineer's salary because you are in law school instead of working as an engineer.

Also this:
http://askville.amazon.com/lawyers-make-money-engineers/AnswerViewer.do?requestId=1551411

One guy says lawyers get paid more because they are needed in greater quantity due to the density of U.S. laws.



Another guy says that the idea that lawyers inherently make more comes from comparing high tier lawyers to low tier engineers rather than to employees at the same tier.



This seems to conflict with your observations since you have new law employees saying they make more than the top tier of their old engineering companies. So maybe that guy is wrong or maybe he is right and you are hiring former engineers who fled dying engineering companies not reflective of the industry as a whole. I dunno. There is probably not a one-size-fits-all observation about lawyer vs engineer salaries since it may vary by firm.

For clarity:

-The proper comparison is engineering to patent law. Since patent law is where engineering people are wanted.

-Patent law pays more on average than the linked site uses, especially based on one's degree. M.S. in Electrical Engineering being the most desired. The sites use pay numbers for all lawyers.

-And there is very low unemployment in patent law, your unemployment numbers include non-patent lawyers.

•Patent Attorney I (JD + 0-2 years of experience) – $80,683 (average); low 41K and high 128K
•Patent Attorney II (JD + 2-5 years of experience) – $123,276 (average); low 88K and high 179K.
•Patent Attorney III (JD + 5-8 years of experience) – $146,262 (average); low 115K and high 195K.
•Patent Attorney IV (JD + 8 years or more of experience) – $170,971 (average); low 140K and high 214K.
•Top Patent Attorney (JD + 15 or more years of experience) – $210,437 (average); low 145K and high 270K.
http://www.patenteducationseries.com/pa ... anges.html

These numbers are not obtainable by most engineers.

-You will see engineering manager jobs only paying 100k or so.

-Four years ago, my step-dad retired from Ford Motor Company, after 32 years, as a supervisor of an electrical engineering department, and was only making 95k/year.

Actually as far as medicine is concerned, many of the pharmacological companies really do set themselves for excessive profits regardless of the cost in lives. There are no major pharmacological companies left in America that study bacterial resistance despite the fact that the problem is getting increasingly worse. The last laboratory was shut down almost a decade ago and it was owned by Pfizer. Pfizer was the last company to maintain a laboratory studying antibiotics. Without antibiotics, modern medicine will be nearly worthless. Traditionally, other drug treatments tended to have paid for antibiotic research (which has little return in profits comparatively.) Now, however, the extra costs are mostly just pocketed.
And now, last time I checked, there are only two major labs in the world that still study antibiotics. You are right that you can't really blame the doctors, but there are definitely prominent people who deserve blame.

Additionally, what about all the CEO's that simply pocketed the stimulus package money?

Even if they didn't create the system, exploiting the system to make it more broken for personal gain still is blameworthy.

And finally, as far as the labor market is concerned... Knowledge = A piece of paper with writing on it, also known as a degree. Karl Gottlieb Mauch, the man who discovered Great Zimbabwe, was one of the foremost explorers in his time. He was denied all jobs in his subjects of expertise for the sole reason that he didn't have a degree... Yeah, sure his discoveries were taught in universities and sure he was fluent in several languages. But, he was denied a jobs for a lack of degree in the subjects he was cited to be an expert of. Srinivasa Ramanujan was similarly turned down repeatedly, but he actually got lucky when a mathematician actually read some of the work Srinivasa sent him rather than turning him down immediately.
The world isn't any different nowadays. It doesn't matter how much knowledge of a subject you have or even if you have been published in credible scientific journals, if you don't have that degree you are screwed.

I'll just leave this here...

Studies in Mutualist Political Economy

I do appreciate the ones who have been there a while, but you have to keep in mind, curriculum changes so the newbies fresh out of school often actually are exposed to the latest info while those who have been out of school for a while, like residents, for example. It just depends though. Do not discount a rookie for merely being inexperienced. Sometimes they are up on all the latest info. And do not discount someone who has made a profound study of a subject. We have been conditioned to believe one must be surrounded by degrees and years of experience to merit any kind of livable wage when that might not be the case at all.

Yes, by setting their prices instead of letting someone come in and name a price. Ideally, the price should be named by the one with the money. I mean, it does make sense in a free market society. Is that or is that not the meaning of a free market? Is it based on what you are willing to pay? Often it isn't though. Like, if I want to go to the doctor but I only want to pay $20 it is unacceptable but it shouldn't be because that is what I am willing to pay and what I am willing to pay is supposedly what will drive the price. Ideally, anyone who studies law should be named a lawyer and in a truly free market, we should all be able to afford one because there will be so many, demand will be met and we can set our own prices. See? Now they just have it structured so there's a system around it, trying to limit the number who can study to become lawyers when it should be anyone who is willing to study should be allowed. All because they don't want too many so we are their mercy instead of them at ours. With less lawyers practicing, they control their prices, we don't.



That's one of the worst offenders - medical profession. It's absolutely-through-the-roof ridiculous. Many of them seem to think people should hand over their life in exchange for medical treatment, their life through money, that is. What I mean is they want every penny you earn over a lifetime just to have your medical needs seen to. If the medical industry could do that, they would. They would own us all. It is so obvious it is an extremely avarice laden industry only because we are desperate and they know our health is the most valuable thing we have. They take full advantage. It's deplorable and shameful to be so inhuman about it. You shouldn't have to pay so much money to access medical services and you wouldn't except there are few doctors, medical school is expensive, so is malpractice insurance, and that's not even addressing the insurance companies, the pharmaceutical corporations. Our government is completely helpless to do anything about it because of the system that ensures the industry gets as much money as it possibly can on all levels. We need to seriously develop an entirely different mindset when it comes to medicine and treatment in this country. Just because you are a doctor doesn't mean everyone owes you every penny you make and it should be easier and cheaper to become a doctor as well so there are more of them and the drug industry acts like a legalized drug pusher a lot of the time, too. It's why they should make all the drugs legal and available through the companies where they would be regulated because doctors will keep on scripting narcotics anyway.



My argument is, in a truly free market, there would be so much supply, yes, you could pretty much set your own price for everything. You would pay what it is truly worth. Let's say there's not so much of one thing, in a free market, you simply wouldn't be able to afford whatever it is unless you were really rich because it is scarce but anything that is in abundance you would get for a very low price. Under such conditions, price of labor might be higher so you would pay for the actual labor.
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Because of these systems in place protecting the monetary assets of a few, we see people deprived of opportunity and prices that are way over inflated, bubble like, so they will only collapse, one day, just like real estate bubbles we have already seen. Nobody addresses these problems but they do exist.

The "Law of Supply & Demand" in a nutshell.

D / S = V

Demand for a certain number of skilled people, divided by the number of people with that skill equals the relative value of that skill.

Thus, if I need 10 people who are skilled at programming in Boche, and ten qualified people apply for the jobs, then the relative value of their skill is 1, and I have to offer each of them the going rate, or they will go to work for my competitors.

If only 5 programmers are needed, and 10 apply, then the relative of their skill is 0.5, and I can offer each of them a salary of only half of the going rate, knowing that enough of them will accept the offer to fill my needs.

But if I need 10 programmers, and only 5 apply, then the relative value of their skill is 2.0, and I have to offer twice the going rate, just to keep them away from my competitors.

Simplistic, I know, but it illustrates the basics of S&D.