A Solution To Minimum Wage That May Become Popular With Employers



I decided to do a little bit of research on how people got paid prior to minimum wage laws, and why those laws were passed. Long story short, and a lot of research nutshelled, minimum wage was a response to employers switching from a productivity based pay system to a wage system in order to control costs and thereby pay their employees less for the production that they contributed.


Yep, in the "olden days of yore," many people were paid similarly to how farm workers are paid today. You had a daily productivity report, and at the end of the day, you turned in your production and were paid for it. Think Rey, in Star Wars episode 9, on Tatooine. Except most employers were not so crooked as the guy behind the counter... yet some were.


But the owners decided that this was too expensive, so they switched to paying people per hour and in the aggregate they paid less overall, even if they paid the lower productivity employees more than they used to. This led to wage decreases and caused the government to step in with minimum wage laws in order to bring it back up.

 
 

It is hard for us to apply such a construct today in a raw form as our society has changed. Some jobs do not have an easy to report "productivity," but many do, and as minimum wage rises, returning to the old system could become a smarter, and less costly, option for many employers.


To illustrate how it works, think of a commissioned sales person. That person can spend ALL DAY on the sales floor, but if they do not sell anything, they do not make any money. Their income is completely tied to their productivity. It is easy to understand it in the sales industry, but what would it look like in others?

How about retail?


Well, cashiers are already going away with the advent of self-checkout, so it is not too difficult to see one person at the front being paid an hourly wage, yet what about the others? Bakery department? You get paid $x per bakery item you bake and put out, and $x more if they sell.


Stockers would have to turn in a production report which tells the company how many products they put out that day. You get paid $x per product you put out. Be high speed and do a great job? Get paid for it. Go slowly, sit on your phone, take longer breaks? No problem, no one cares, you just will not be paid for what you did not produce.


Fast Food? Easy, go to self ordering and paying terminals like Sonic and then the employees are paid $x per food item they cook and deliver to a customer. The only people who would be making a wage at that point are the managers. You work your butt off, get customers helped and make money for the company, you get paid better. You choose not to, it is directly reflected in your pay.


Call Center?


Come on, this one is easy pickings. You get paid per customer interaction you have. $x for successful ones, and $y for unsuccessful ones. More calls taken equals more money.


Restaurants?


Waiters will be paid a percentage of what they get the customers to order, and cooks will be paid per food item they cook. The only hourly employees would be the host and the manager.


It is like being a paper boy all over again. You only got paid $x for each subscription. It did not matter how long it took you to run your route. Some days it took me 2 hours, others it took 1. Weather and day of the week had a lot to do with it, but it never changed my pay.


When you unlink time and pay, and instead choose to link productivity with pay, then you change the entire employment equation. It eliminates employers paying people for time spent goofing off, and it allows for people who want to be paid more to just put in some extra effort to get the results that they want.


It is, by far, the most equitable pay system.


Yet it will be met with absolute derision by the left, and when it does begin to happen (which I think is less than 5 years from now) you are going to see a lot of people screaming about how it is unfair to those who "cannot be as productive."


"After all," they will say, "those people are giving their time too."


Yes, but you have removed the ability of the company to reward productive employees differently than unproductive employees. I am sorry to have to break it to you, but not everyone's time is equal. At least not from an employment standpoint.


We already see this beginning to creep in with things like "bonus pay" and "bonus hours." It is really small right now, in fact you have likely not really even heard of it, but it is the beginning of something, and I imagine that it will not be long until you are seeing it percolate through the broader economic system.


When you demand equity, you should expect a demand for equity in return.


Businesses pay for productivity, not your time. Your time is worth nothing to them if you produce nothing.


We may see a return to the ultimate equity soon.


I imagine people are going to lose their minds.

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