Economic Hypothetical

[Serpentine]

What would happen if all occupations paid the exact same amount (with various occupation-related costs paid-for such as a doctor's insurance or a builder's tools, to keep the take-home amount the same)? CEOs, surgeons, teachers, electricians, painters, nannies, coffee-growers, prostitutes, strippers, actors, politians... All get the exact same income, but can spend or save as they wish. How would that effect spending? The economy? Society? Pricing and costs?

Optional variables:
- Income is "per hour".
- Income is "per year".
- Income is "per unit of work" (say, I dunno, per patient, or per m2 painted, or whatever)
- Income is at present "well-to-do" middle-class levels.
- Income is at the high end of present levels (CEOs and the like).
- Income is at or close to current minimum wages.
- Income can change (though the same amount for everyone).
- Income cannot change.
- People can only have one job.
- People can have two or more jobs.

[Coidzor]

1&2.
Whether the income is calculated in terms of per annum or per week, it doesn't really matter, since it should add up to roughly the same. Unless you mean how the paycheck is divided up... In which case, yeah... If people receive one lump sum a year, at least initially they're going to be very, very, very stupid with it and that'll cause problems. Once they become used to it though, it just means that expense planning and bugeting are some of the most essential family and household planning/maintenance skills.

3.
If it's per unit of work, it becomes unclear as to what you're saying. Do Dr's get paid X for every patient they examine or surgery they perform and welders receive the same amount, X, for every unit that passes through their stage of the assembly process. Or does a Dr. receive X per patient and receive Y at the end of the year when everything is added up but the welder receives Z amount but also receives Y amount at the end of the year? Because in the first depending upon how many/quickly they get through units they can create an income disparity and in the other it's basically the same as just giving them the same arbitrary salary.

4.
I don't see much change, other than that those who were living below poverty now no longer have as much problems. There'll be some amount of inflation and an increase in sales (and the price) of drugs and alcohol due to the number of people who blow their income on that already having their income increased.

5.
I foresee massive inflation if everyone starts making rockstar salaries, to the point where like, a loaf of bread would come to cost something along the lines of 100-10000 USD, for example.

6.
If income is at, near, or below minimum wage, than the system quickly experiences a bottleneck as people are getting much less money and have less spending power while inflation is still at the level it is now and so money has to be taken out of the system and that's usually fairly messy.

I imagine a sort of, people don't have enough money to spend on anything other than shelter and food and clothing if they're lucky, and so other industries quickly fold or at best become greatly reduced, only patronized by the extremely wealthy who feel tightly the sting of the fact that their cash reserves cannot legitimately increase, unless investments still give returns other than the fixed income, so they will steadily become poorer with every expenditure with no relief. Deflation and stagnation until it stabilized, but I don't see it coming out of it afterwards due to the condition the fixed relative wage and the injury caused by setting it so low compared to what the system was used to.

7&8.
If the wage can change along with inflation/deflation, then, well, that's better than it being perma-frozen, I believe, but I could be recalling erroneously there. I'm pretty sure my gut feeling/recollection is right though. Also, it matters more what the wage is initially fixed at relative to the system before the change more than whether it can change afterwards I think, due to the differing outcomes depending upon whether it was high, medium, or low, based upon my three previous answers.

If Income cannot change, I do not know exactly how inflation could enter the system, but if inflation enters the system, then a frozen income hurts everyone very badly after a certain point. Deflation would do the opposite and be required in order for anyone to buy anything if the wage was set low. Since everyone is making the same income, then deflation actually benefits pretty much everyone due to it allowing them to enjoy more services for how much money they are getting.

9.
Well, as long as the wage was a living wage this wouldn't really matter.

10.
This though is a bit more interesting. Since if the same wage is made at each job or even just half for every job after the first, then that's one of the ways to expend health and sanity in order to save up money or possibly just escape the poverty line in the worse places that the income could be fixed to.

What brings this to mind?

[Nameless]

That's called Communism. :smallwink:

[raitalin]

Oh man, I really want to answer this, but I just woke up and its got me grinding my gears.

The short answer is: Total economic collapse. I'll get to work on the long one.

EDIT: And no, it's not Communism, its even more rigid. Even Communist systems recognized the higher value and rarity of certain professions over others.

[Jade_Tarem]

No one will enter highly technical fields. There won't be any neurosurgeons or engineers, because those fields require higher education and are simply harder to do. That's why they pay more in real life. People will gravitate toward trade skill professions that can be learned more quickly, so that they can start working sooner and produce a higher measurable output.

There was a Dilbert comic a long time ago where the pointly-haired boss brags to Dilbert "I attended dozens of meetings this year, while you designed just one measly microchip. Now do you see what it takes to be a leader?" Dilbert's response was a sardonic "Sadly, yes," but under this system, the Pointy-Haired boss would be correct, and deserve to make more money.

Also, since you can't aquire money from royalties or patents, the rates for advancement of arts and inventions are going to go way down.

Ultimately the advancement of civilization will grind to a halt.

[Jalor]

Nobody would take any job requiring more than minimal effort. Sure, some people would keep doing what they like to do, if they are lucky enough to enjoy their job. Maybe some people would work hard jobs out of a sense of duty.

I would find the easiest job I could possibly think of, with hours as flexible as possible and many opportunities for slacking off. As would 90% of humanity.

Civilization would collapse, in whatever country this happened in.

If this became law by popular vote, I wouldn't be at all surprised.

[V'icternus]

Well, I have a question... How would small business retail work?

Certain things still cost more than other things, I beleive, so a person in retail could possibly either make a lot more than people with set income, or a lot less if they all get high-pay, in which case no-one would want to go into retail. No retail, no jobs for manufacturers and producers. This means no-one wants to be one. This means nothing gets made, no food gets grown for selling, and the only jobs getting done are easy, set-pay jobs. (Bottom-floor window washers, bad lawyers, dog walkers, strippers, etc.)

The Economy would be alright, I beleive. But I give the world a month, tops, before either this system collapses, or everyone dies because no-one is making food, because there's no real money in it any more.
(For example:
Farmer: I'm going to stop grown food... otherwise I wont be able to afford to live in this world with everyone else getting so much money, and therefore expecting more to come in. I'm sure someone else will make the food...)

[Milskidasith]

Since it's already been said (curse you, ninjas!), I'll just put it into a somewhat workable analogy.

Jobs work by supply and demand just like goods do. The more people who want to hire a certain profession and the less of that person there are, the more people will be willing to pay (there are other factors, like how risky it is, but that's the general way it works.).

Ok, since they both work on supply and demand... imagine that every good and service cost the same arbitrary amount (not counting jobs as services, which they technically are). Everything that takes a lot of materials to make would stop being produced because it would not be profitable.

That's what would happen to jobs. Everybody would be working for previously minimum wage, no training jobs because they get as much money as Bill Gates does.

I also don't see why you even needed to ask the questions about everybody's income being higher or lower. It's basic economics; if everybody is making less money, goods cost less. There isn't much else too it; money doesn't work because it has inherent value, it works because it's backed up by the country running it and/or a certain amount of something with value (gold is the usual standard). So if everybody suddenly starts making billions of dollars... the cost of goods goes up by the same amount, because the money is more worthless.

EDIT: I'd like to point out to V'icternus that even a bad lawyers still need years of law school and to pass the BAR exam, so it isn't exactly an easy job. Neither is stripping (it requires you to be in good physical shape and to keep up your attractive appearance, and it's pay isn't set either.)

[Erloas]

In theory if wages were frozen across the board it would stop most causes of inflation and deflation. Of course that wouldn't really work because we have a global economy and you would never get everyone to agree on a price range.

It would probably lead to inflation on necessary goods and probably devalue a lot of unnecessary goods. At least if it was fixed in a middle/upper middle class range.



Of course the system simply wouldn't work because there would be no incentive for anyone to do anything. Any advancement at work would lead to more responsibilities with less pay. Why take on all the stress of being a manager, engineer, or doctor when you can make the same amount flipping hamburgers at McDonalds with very little stress, no overtime, and no experience needed.
There are a lot of jobs that are required to make the world work that are not great jobs, a lot of repair and maintance, anything to do with garbage or sewage, construction, etc that people generally only do now because its about the best pay they can get for the skills they have and no one would be doing them if they could make the same in a better job.


You would also completely destroy a fair bit of the economy in doing so. Once companies knew what the population had to spend they would raise their prices on necessary goods until it balanced out fairly well with how much money people had. It wouldn't leave anyone with a lot of extra money. It would completely destroy the luxury industries. There are a lot of recreationaly industries that would be killed too because right now they are mostly limited to upper middle class and some from lower classes that really prioritize that activity. However the companies running the necessary goods would adjust their prices until very few people would be able to save to the point of getting that stuff. Right now all those companies are more focused on pricing for the lower middle class because thats where the bulk of the population is at.

[V'icternus]

Sorry, I didn't know you were such an expert on law and stripping. The fact that you are confuses me...

But alright, switch "bad lawyer" with "fake lawyer" and "stripper" with "bad stripper". The pay's the same either way.

[Coidzor]

Especially what with the pay being fixed and there apparently even being a market for poor quality strippers. *shudder*

I don't know if lawsuits would go up or down since no one would be paying the lawyers since they draw from the dole... Then again, the lawyer supply would probably shrink due to its earning power going down unless court winnings and such were left unchanged...

[V'icternus]

Not to mention how many people would suddenly choose to work at McDonalds...

Unless... unless that's the plan... McDonalds institutes this change, and then everyone starts working for them... before you know, it, McDonalds has taken over the world!

[Jalor]

Actually, never mind what I said before. I really hope some country does this, because then I can become a stripper. I'm disturbingly skinny and ass-ugly, but I'd make as much money as a CEO!

[V'icternus]

Hmm...
{Scrubbed}

[Coidzor]

Not to mention how many people would suddenly choose to work at McDonalds...

Unless... unless that's the plan... McDonalds institutes this change, and then everyone starts working for them... before you know, it, McDonalds has taken over the world!

I dunno, the conditions of actually working at a fast food place are very unpleasant and exacerbate the problem of teenage alcohol and drug abuse due to the psychological effects.

I have yet to find out if working in a Big Box store is worse though...

...I can see a large number of women claim prostitution as their primary income source in order to get paid by whatever source that pays them and then just put down whatever casual sex they have as they go about their lives as them being on the clock.

Unless prostitution is either made into kept in the stables at a brothel or taken off of the list of fixed income professions and treated as a small business...

[V'icternus]

Well, when "Work for a day as the head of a world-wide major corporation" pays the same as "Put in 2 hours of serving fat customers", it's not that hard to pick.

(Note: I mean no offence to anyone who works at or eats at McDonalds. I know I do. I don't know what McNuggets are made of, but cover them in Ketchup and I'll wolf down twelve before you're done with your fries)

[Serpentine]

No one will enter highly technical fields. There won't be any neurosurgeons or engineers, because those fields require higher education and are simply harder to do. That's why they pay more in real life. People will gravitate toward trade skill professions that can be learned more quickly, so that they can start working sooner and produce a higher measurable output.I would consider education being included in "occupation-related costs". What if people were also paid, partly or fully, for their education?


Nobody would take any job requiring more than minimal effort. Sure, some people would keep doing what they like to do, if they are lucky enough to enjoy their job. Maybe some people would work hard jobs out of a sense of duty.

I would find the easiest job I could possibly think of, with hours as flexible as possible and many opportunities for slacking off. As would 90% of humanity.That's sort of what I meant by "pay per unit of work", though obviously it would be very difficult to quantify it. If one hour of building is (somehow) considered twice as hard or as much work as one hour of librarian, they could be paid twice as much. So what if that option was in place (and it was possible to quantify it reasonably well)?


Certain things still cost more than other things, I beleive, so a person in retail could possibly either make a lot more than people with set income, or a lot less if they all get high-pay, in which case no-one would want to go into retail. No retail, no jobs for manufacturers and producers. This means no-one wants to be one. This means nothing gets made, no food gets grown for selling, and the only jobs getting done are easy, set-pay jobs. (Bottom-floor window washers, bad lawyers, dog walkers, strippers, etc.)First of all, everyone would have set pay. That's kinda the point. Secondly... Actually, I think I just don't understand this. If a person has a job, they are receiving the same income as everyone else (and I'd like to assume, however unlikely, that everyone has a job). Saying that "a person in retail could possibly either make a lot more than people with set income" is nonsensical in this context, because everyone is making the same, set amount, including retail.


The Economy would be alright, I beleive. But I give the world a month, tops, before either this system collapses, or everyone dies because no-one is making food, because there's no real money in it any more.
(For example:
Farmer: I'm going to stop grown food... otherwise I wont be able to afford to live in this world with everyone else getting so much money, and therefore expecting more to come in. I'm sure someone else will make the food...)Why would there be "no real money" in farming? There's exactly as much as in any other occupation.
Of course that wouldn't really work because we have a global economy and you would never get everyone to agree on a price range.Lets pretend we can. Or not, either way! Erm. I mean... What would the different impacts of either be?

Of course the system simply wouldn't work because there would be no incentive for anyone to do anything. Any advancement at work would lead to more responsibilities with less pay. Why take on all the stress of being a manager, engineer, or doctor when you can make the same amount flipping hamburgers at McDonalds with very little stress, no overtime, and no experience needed. Again, what if the income was per unit work? Or, what if the "harder" jobs had other (non-monetary, and non-exchangable) incentives - paid holidays, better health care, etc?

There are a lot of jobs that are required to make the world work that are not great jobs, a lot of repair and maintance, anything to do with garbage or sewage, construction, etc that people generally only do now because its about the best pay they can get for the skills they have and no one would be doing them if they could make the same in a better job.But presently these people tend to be paid less (I assume - feel free to correct me). They would be paid more (unless it's the low wage) for the same job, and they still don't have the skills for "better" jobs.

It would completely destroy the luxury industries. There are a lot of recreationaly industries that would be killed too because right now they are mostly limited to upper middle class and some from lower classes that really prioritize that activity.I figured there would be some people who spend quickly for all the little things, and others who save up for the big things. I have no doubt that many luxuries, especially the big ones (ultra-expensive resorts, top-end jewellery, etc) would suffer badly, but at the same time there would be more people who currently can't afford any, or only few, luxuries who could afford some. And wouldn't many luxuries, within the limits of the costs to produce them, simply lower the price and sell to more people?

I'm interested in the short- and long-term effects of this, by the way. All pretty interesting so far... although isn't there any way it could not be a disaster?

edit: Ah. There's a problem I didn't think of. Shall we assume that, through force or simply universal good-nature, everyone is working hard at their jobs for the full amount of time? Also, either everyone would be working the same number of hours, or for the same equivalent (however that'd be determined...) amount of "work".

[Coidzor]

Well, when "Work for a day as the head of a world-wide major corporation" pays the same as "Put in 2 hours of serving fat customers", it's not that hard to pick.

(Note: I mean no offence to anyone who works at or eats at McDonalds. I know I do. I don't know what McNuggets are made of, but cover them in Ketchup and I'll wolf down twelve before you're done with your fries)

If you can get a 2 hour shift. We don't know if they'd have to take you anyway. Might be just that McDonalds are constantly fully staffed due to the government paying the employees' wages and to stock the restaurant, but there's only so many people as can fit behind the counter at a fast food joint...

Then again, turnover might be fierce from the abysmal conditions inflicted by the sheer number of customers who are actually just people turning in job applications and eating a meal there at the same time and the mess from the increased volume helping provide incentive to the clean-up crew to think about something else at least...

[Jalor]

although isn't there any way it could not be a disaster?
Short answer: No.

Long answer: Nope.

[V'icternus]

There's no real money in farming because who wants to work in a field all day, making crops grow, when they could just get a job as the co-vice assistant to the vice president of a small company that makes paperclips, where their only job is to say "Good Morning Sir!" and make sure their boss doesn't lose his keys?

And as for retail, you get money based off of what you sell. The price of things more or less depends on their rarity. That means that if you sell only the low-priced items, you're not getting as much as the "average" is set at. However, if you sell the big-money items, you get rich quick. If everything costs the same, then this doesn't work.

One solid gold toilet, and one packet of chips being the same price would ruin a retail businessman. They'd only sell the worst, low-quality stuff they could, because they get the same ammount either way. When quality has no effect on how much you get, quality decreased.

[Quincunx]

I have little patience for this today. Read Walden Two (http://books.google.ie/books?id=KEiYzfCVzv4C&dq=Burrhus+Frederic+Skinner&printsec=frontcover&source=an&hl=en&ei=RLh1Su_KIM6gjAeulNCnBg&sa=X&oi=book_result&ct=result&resnum=6) and assume the controls that were placed upon work in that society.

[LCR]

In theory (like communism, which is kind of similar), this is a great idea.
In practice, I'd be bloody pissed. Why should I endure 4 years of undergraduate education, 4 years of medical school and four to six years of medical residencies and then get paid exactly the same amount of money as someone who barely finished high school.
Sure, in theory, I should be glad to be doing work I enjoy, but this isn't Star Trek.
And outside an ideal society, where everyone has access to everything, I don't think a system without some sort of monetary gratification would work.
Consider garbage men. In Germany, they're paid very good wages for their untrained labour. Now, if they would be paid exactly as much as everybody else, who in his right mind would want to clean out my trash?

[Milskidasith]

Well, retail would work if the government owned everything. And produced everything. And supplied all jobs. So if this economic idea was implemented into some form of super communism and everybody was perfect... it might work. But in the real world, it probably won't, especially not in the US since we are so set in our free market system (not that it is inherently worse than communism).

Anyway, if people were paid for their education... still no! Why would a doctor go through 8 years of college when he gets the same pay as something else? You can get a few doctors out of genuine goodwill, but a significant number are in it for the money.

Also, I'm not sure how you intend to figure out what takes "more work" than something else. If "more work" is just defined by the value of work... it really stays the same as the current system.

This system also collapses when you consider any job reliant on tips; if a stripper got paid the same base salary as somebody else, but was also getting tips, then stripping is going to be one of the most profitable jobs, up there with being a waiter or selling peanuts at sporting events.

[V'icternus]

And then there are the buskers to consider... those who have talent, but may not have jobs, and they perform out on the street for money. I doubt that could have a set pay attached to it, but with people having more money (if the pay was set high) or less money (if it were set low) busking could become either very profitable or become worse than being a CEO who took forty years to get to that position, only to have him being poorer than the salad tosser who's smart with his money.

[Serpentine]

There's no real money in farming because who wants to work in a field all day, making crops grow, when they could just get a job as the co-vice assistant to the vice president of a small company that makes paperclips, where their only job is to say "Good Morning Sir!" and make sure their boss doesn't lose his keys?How about because there's only, say, 10 of those positions available? Personal preference? Skills and ability to get the job? The co-vice assistant job may not, presently, receive as much as a farmer, but it's certainly more reliable. So why aren't all farmers going after that job?

And as for retail, you get money based off of what you sell. The price of things more or less depends on their rarity. That means that if you sell only the low-priced items, you're not getting as much as the "average" is set at. However, if you sell the big-money items, you get rich quick. If everything costs the same, then this doesn't work.No, not in this case (with the possible exception of a "per unit work" option, maybe). EVERYONE is paid the same. Retail, medicine, law, trades, whatever. There's no "set average", there's the "set income", with the possible possibility of taking on extra jobs if that option is included. As long as everyone do their jobs, everyone, at the end of the year (or day, or week, or amount of work, or whatever) has the exact same amount to spend or save as they wish.

One solid gold toilet, and one packet of chips being the same price would ruin a retail businessman. They'd only sell the worst, low-quality stuff they could, because they get the same ammount either way.Why would everything cost the same? I never suggested that, so I'm curious as to where this came from.

[Jalor]

Why would everything cost the same? I never suggested that, so I'm curious as to where this came from.
All the retailers make the exact same amount of money.

[Coidzor]

I would consider education being included in "occupation-related costs". What if people were also paid, partly or fully, for their education?

It's still opportunity cost. Why go to college and stress out over tests and papers when I can start making just as much money right now? Sure, there'll be a subset who'll go on because they actually want to learn and maybe a smaller subset to whom the business world still holds some appeal to for anything beyond the ground level...

With the whole lack of consequences in terms of income from working a crappy job which leaves time in the evenings, a youth party culture would probably arise if it were possible to do so in the economic clime due to the liquid cash of fully mature adults flowing around in the pockets of young people who are just moving out of their parents homes or who are living with them for a few years until they've saved up enough to just move on to the stage of home ownership(if that's possible) rather than going up from dingy flats to more respectable flats and so on.


That's sort of what I meant by "pay per unit of work", though obviously it would be very difficult to quantify it. If one hour of building is (somehow) considered twice as hard or as much work as one hour of librarian, they could be paid twice as much. So what if that option was in place (and it was possible to quantify it reasonably well)?

You'd have a lot more headache in establishing the rubric, but you'd essentially be trying to duplicate what the market does already. So you'd have to 1. accept that you're not going to do as clean of a job due to the bureaucracy involved and 2. that periodic maintenance is necessary to make sure that everything is still as it should be since it's fixed in place rather than naturally flowing with the changes of the market.


First of all, everyone would have set pay. That's kinda the point. Secondly... Actually, I think I just don't understand this. If a person has a job, they are receiving the same income as everyone else (and I'd like to assume, however unlikely, that everyone has a job). Saying that "a person in retail could possibly either make a lot more than people with set income" is nonsensical in this context, because everyone is making the same, set amount, including retail.

This was working off of the assumption that you weren't eliminating private business ownership and so they were still dependent upon their business's profit for income. I interpreted it as complete taxation of all profits and the salary of each working citizen being doled out to them from the central government.


Why would there be "no real money" in farming? There's exactly as much as in any other occupation.Lets pretend we can. Or not, either way! Erm. I mean... What would the different impacts of either be?
Again, what if the income was per unit work? Or, what if the "harder" jobs had other (non-monetary, and non-exchangable) incentives - paid holidays, better health care, etc?
But presently these people tend to be paid less (I assume - feel free to correct me). They would be paid more (unless it's the low wage) for the same job, and they still don't have the skills for "better" jobs.
I figured there would be some people who spend quickly for all the little things, and others who save up for the big things. I have no doubt that many luxuries, especially the big ones (ultra-expensive resorts, top-end jewellery, etc) would suffer badly, but at the same time there would be more people who currently can't afford any, or only few, luxuries who could afford some. And wouldn't many luxuries, within the limits of the costs to produce them, simply lower the price and sell to more people?

On the small scale, farming would not be worth the time and effort put into it relative to the profit. Since a much easier and less involved job would provide just as well. This is drawing again from the idea of a family or personally owned farm though. If businesses still existed, then big agra would still be growing crops. Though why it allowed this to happen....:smallconfused:

If you include better healthcare as part of the incentives for jobs where you want people to continue to go to despite them being probably too much effort for the reward, then you're basically making them have more reward, but you're also getting back into that whole classist thing which this is supposed to be getting everyone away from. If only farmers and sewage disposal men and others in a tier are allowed to get modern dental care and everyone else has to make due with subsequently lower tiers, then, well, you really haven't changed all that much, just who gets to enjoy being able to afford good teeth.

You're right though, some people will take jobs just to have jobs, but that's harder to anticipate and account for with this system which seems to be more like everyone is receiving welfare from the government in exchange for working.


I'm interested in the short- and long-term effects of this, by the way. All pretty interesting so far... although isn't there any way it could not be a disaster?

Not in the short term at least. It's a very violent, jarring break with the past. If you worked it out just right you could probably have it halfway workable but you're basically trying to artificially imitate what the market does on its own in the best example so far, where you're adjusting wages for how valuable the work is (since, y'know, having a person being paid for two hours for every one hour they work is, in terms of income, the same as simply doubling their hourly wage).

I don't know enough to really speculate on what kinds of cultural indoctrination and ad hoc things could be done to force a society to work with these constraints. I don't imagine it to be very pretty though.

[Serpentine]

Anyway, if people were paid for their education... still no! Why would a doctor go through 8 years of college when he gets the same pay as something else? You can get a few doctors out of genuine goodwill, but a significant number are in it for the money.Funny... I was sort of expecting people to argue the other way. Why work for that 8 years when you could go to uni for 8 years and get paid for it?

Also, I'm not sure how you intend to figure out what takes "more work" than something else. If "more work" is just defined by the value of work... it really stays the same as the current system.Yeah, I know, very unlikely to really be possible. Thus the "hypothetical" :smalltongue: And yeah, that is possible.

This system also collapses when you consider any job reliant on tips; if a stripper got paid the same base salary as somebody else, but was also getting tips, then stripping is going to be one of the most profitable jobs, up there with being a waiter or selling peanuts at sporting events.Well, in Australia I don't believe there is any job in which tips are considered a significant - much less official - part of income. I don't really know how to fit that in.

[V'icternus]

It came from this:

If you sell something, you lose the item then get the money paid for it. To receive the same ammount of money as someone else, your prices either have to be modified, or someone has to come and take your money if you do well.

Let's say there's a $50 "set pay".

Businessman does a day of work: $50
Retail person does a day of work, and sells three $400 items that cost him $350 each to obtain. He gains $150 in profit.

Now, modify prices...

Businessman does a day of work: $50
Retail person does a day of work, and sells three $50 items that cost him $50 dollars to obtain from the manufacturer. He gains $0 in profit.

Retail can't have a "Set pay" because no one is paying them. It is an exchang eof money for goods and services.

[Coidzor]

All the retailers make the exact same amount of money.

That just means that their profit is taxed completely while their overhead is provided by the government which also pays the salaries of everyone working in the business.

[endoperez]

There's no real money in farming because who wants to work in a field all day, making crops grow, when they could just get a job as the co-vice assistant to the vice president of a small company that makes paperclips, where their only job is to say "Good Morning Sir!" and make sure their boss doesn't lose his keys?

And as for retail, you get money based off of what you sell. The price of things more or less depends on their rarity. That means that if you sell only the low-priced items, you're not getting as much as the "average" is set at. However, if you sell the big-money items, you get rich quick. If everything costs the same, then this doesn't work.

Re:farming
Because the co-vice assistant has to "work" 8-to-18 every day almost full year, because that's how his work is evaluated, while the farmer's work varies with seasons, and he is given longer holidays/equivalent.

Re:retail
That's not how retail would work in this system. Shop-workers are paid for working in the shop, and someone (perhaps a bureaucrat) is paid for making sure the shop has things to sell, but the money for the goods doesn't come from their pockets.


There's yet another problem for this system: different areas have different situations. People in cold countries with snow and storms and several months of freezing can't work like the people near the equator. It's too difficult to factor in things like how much a farmer would have to work, and how different types of farming would work (maize vs grain vs rice vs pigs vs cattle vs several different ones), etc etc.

[V'icternus]

So who pays for what the retailers sell? The government? The manufacturers have to get equal pay, too.

And for that matter, how would the government get anough money to support this system? They're the ones paying everyone for everything.

[Quincunx]

If Walden Two takes rather too long to get to the economic meat of work (Chapter Eight (http://books.google.ie/books?id=KEiYzfCVzv4C&pg=PA45&lpg=PP1&dq=Burrhus+Frederic+Skinner)), a similar system was hinted upon in The Giver, which was a school text for some of you.

[Faulty]

That's called Communism. :smallwink:

Communism doesn't involve money. Every person gives they're labor to who needs it. Doctors treat patients, farmers give food to individuals, barbers cut hair, etc, for whomever or too whomever needs it. Everything is essentially free, because it's on a per-need basis, thus resulting in everyone's needs being met.

[Serpentine]

All the retailers make the exact same amount of money.All the employees of the businesses make the exact same amount of money. Businesses (and retailers) make different amounts.
With the whole lack of consequences in terms of income from working a crappy job which leaves time in the evenings, a youth party culture would probably arise if it were possible to do so in the economic clime due to the liquid cash of fully mature adults flowing around in the pockets of young people who are just moving out of their parents homes or who are living with them for a few years until they've saved up enough to just move on to the stage of home ownership(if that's possible) rather than going up from dingy flats to more respectable flats and so on.First of all, I was intending to just snip out the sentence I wanted to comment on, but it turns out that's all one sentence :smalleek: Anyway, why wouldn't home ownership be possible? Loans and saving are still possible.

This was working off of the assumption that you weren't eliminating private business ownership and so they were still dependent upon their business's profit for income.I admit, I don't know how it would work in practice, but I intend that everyone is receiving the same income regardless of the profit of the business. The background stuff is definitely something I don't know where to begin theorising, but I was hoping more for a discussion on just what would happen if everyone was earning the same amount of money, not how everyone would be earning the same amount of money... if you know what I mean.

If you include better healthcare as part of the incentives for jobs where you want people to continue to go to despite them being probably too much effort for the reward, then you're basically making them have more reward, but you're also getting back into that whole classist thing which this is supposed to be getting everyone away from. If only farmers and sewage disposal men and others in a tier are allowed to get modern dental care and everyone else has to make due with subsequently lower tiers, then, well, you really haven't changed all that much, just who gets to enjoy being able to afford good teeth.It would be more "luxury" type incentives, like, say, fancy bracers and an extra-nice hospital room, not basic stuff like, as you said, modern dental care. But still, good point.

You're right though, some people will take jobs just to have jobs, but that's harder to anticipate and account for with this system which seems to be more like everyone is receiving welfare from the government in exchange for working.Quite possibly.

How about some more social impacts? Could there still be a rich/poor divide? Could there be an elite, and if so, based upon what? Who do you think would save, and who spend? and so on.

V'icternus: I hope that stuff I've already said addresses it, but otherwise:
1. Basically what endoperez said. They have their set income regardless of sales. Their income comes from elsewhere.
2. Where this "elsewhere" is is something I wouldn't know where to begin considering, and not what I hoped the discussion would focus on (not that there's anything wrong with it focussing on it, I just don't have an answer).

endoperez: What sort of problems are you predicting?

[Coidzor]

Funny... I was sort of expecting people to argue the other way. Why work for that 8 years when you could go to uni for 8 years and get paid for it?

Well, it would become more of a cultural thing than a class thing then. Probably pretty much stay the same other than allowing some of those who were previously barred from higher education to have access to it.

I imagine that the universities would have a bit of a split between those who tightened up everything so that those who were not serious left or flunked out and those who embraced basically being paid by the government to run a party school... producing many pickled hospitality majors.


Well, in Australia I don't believe there is any job in which tips are considered a significant - much less official - part of income. I don't really know how to fit that in.

Hmm, Australia is different from the US then, as waiters are dependent upon their tips for a significant portion of their income. I believe there is actually a separate minimum wage in certain areas/businesses where the tips constitute a major portion of the employees' living, as one of my friends is a waitress and her actual wage that she is paid by the business is about half of what I was making when I made minimum wage. Since she's cute and manages to maintain a winning personality despite the BS of the job, she actually makes, on average, a bit more than I was at my last job once I was around for the compulsory union membership to quit garnishing my wages for being a new employee and the negotiated wage increase hit me simultaneously.

Pretty much the only way to fit it in there would be to remove the mental association with tipping said professions. Or accept that they're going to be earning unreported income. In the case of waiters this is going to go down anyway, due to the perceived lack of obligation to continue to tip them if they make as much as you do. Strippers though, due to demand, might still be able to command their tips. I don't really see it as game-breaking discrepancy though, but it could be. Might need men with gold teeth and diamond rings to make sure the girls don't take any of the thong money home with them.

[V'icternus]

Alright then, disregarding where the money comes from, and how everyone earns the same ammount of money...

This would work fine. The world has infinite money, and everyone can afford everything.

Now the only problem would be the hardest jobs would likely go undone. Sewage workers would be nonexistant (unless, you know... it's what you like doing.) and there would be no reason to advance in whatever corporate ladder you're on. Find a fun job, and do it.

The only way to get more money than anyone else is to be good with money, and perhaps by exploiting the system...

[Serpentine]

People keep bringing up jobs like sewerage workers and garbage men as examples of jobs people wouldn't want to do if they were paid the same amount as, say, a businessman.
1. A significant (if not large) portion of the business population is paid an incredibly disproportionately large amount of money.
2. Aren't sewerage workers and garbage men and the like (and trades and such) paid very little?

If these assumptions of mine are incorrect, I may have (yet another, obviously :smalltongue:) problem with my hypothetical.

[V'icternus]

Actually, they pay decently...

Because when there's a job no-one wants to do, but needs doing, people get desperate and are willing to pay more to get it done. However, with everyone being paid the same ammount, who's going to take the incentive and say "I want to work knee-deep in raw sewage to fix that leak on the other side of town that has never and will never bother me!"?

And forget anyone going above and beyond what their job says they have to do. They don't get paid extra for that. And, as promotions are worthless...

[Coidzor]

^: For the amount of skill their labor requires, garbage men and sewage workers and the like command a higher wage due to the fact that no one wants to do the job. In some cases similar jobs no one wants to do are taken by the destitute who are desperate for any income, but this usually happens more to new immigrants to a country, at least with the US as an example.


All the employees of the businesses make the exact same amount of money. Businesses (and retailers) make different amounts.

So everyone makes a fixed wage except for the people at the top and small business owners and people who can afford enough stock to make money off of it.


First of all, I was intending to just snip out the sentence I wanted to comment on, but it turns out that's all one sentence :smalleek: Anyway, why wouldn't home ownership be possible? Loans and saving are still possible.

Aye, I know, sometimes I even impress myself with the girth of my sentences. :smallwink:

The main concerns here are 1. whether private property is to be abolished and 2. whether the economics of the situation either causes a housing boom from everyone being able to afford home ownership (and the associated environmental/space costs) or if the planned nature of society causes more high-rise apartment complexes to be built rather than new subdivisions.


I admit, I don't know how it would work in practice, but I intend that everyone is receiving the same income regardless of the profit of the business. The background stuff is definitely something I don't know where to begin theorising, but I was hoping more for a discussion on just what would happen if everyone was earning the same amount of money, not how everyone would be earning the same amount of money... if you know what I mean.

You would pretty much have to seize their profit via taxation and tariffs, really, so that the individuals only get their government issued salary and if the business wants to expand they have to apply for the government to grant them the funds.


It would be more "luxury" type incentives, like, say, fancy bracers and an extra-nice hospital room, not basic stuff like, as you said, modern dental care. But still, good point.

Hmm. Land of differently colored hats. social control of prestige is always something. Could work. Could possibly create racism-like problems down the road, like in that one highschool where the dominant blue-armbander crowd started beating people for being part of the orange-armbander-crowd and I think almost or actually did kill someone before they finally said, whoa, we should stop this social experiment before we ruin some people's lives. Which was a bit late since they already had.


Quite possibly.

How about some more social impacts? Could there still be a rich/poor divide? Could there be an elite, and if so, based upon what? Who do you think would save, and who spend? and so on.
There could be, but it would mostly be based upon who was who in the old system and managed to retain vestiges of it. Or bank accounts and stocks. if everyone makes the same wage, then the only way to get ahead is to control stock in a company making a profit so as to enjoy a percentage of that profit. So potentially, those at the top would heavily invest in profitable businesses more fiercely due to their legitimate income options being more limited in such a world, since they can't command a fat salary in exchange for surrendering some of their position/backing down in a majority stockholder fight.

[endoperez]

endoperez: What sort of problems are you predicting?

Mostly a problem in evaluating the amount of work, and the fact that some areas would effectively be "cheaper" to live on.

In some regions, more effort is required for the same result, such as building a house that stays warm in -25 celsius is harder than a house that stays warm in -5 celsius. If effort is compensated for per-house-basis, the builders in these areas get less income than builders in other areas. If effort is compensated per-hour, houses are more expensive in some areas, which means more money is spent on houses, which means people effectively get paid less. There's also the fact that somewhere like Finland where the winters are cold, more has to be spent on warming the buildings, keeping the streets clean (all that snow has to be taken out), farmers can't farm year-round, etc etc. More work is required, so same income can buy you less commodities.
Siberia vs Mediterranean vs China vs Australia: some of these would be "poorer", some "richer".

[Serpentine]

^: For the amount of skill their labor requires, garbage men and sewage workers and the like command a higher wage due to the fact that no one wants to do the job. In some cases similar jobs no one wants to do are taken by the destitute who are desperate for any income, but this usually happens more to new immigrants to a country, at least with the US as an example.I think it's sort of that I've never heard of a rich muck-worker.

So everyone makes a fixed wage except for the people at the top and small business owners and people who can afford enough stock to make money off of it.Hrm. I don't get the stockmarket at the best of times... I'd like to ask "can't we leave that out?" but I think I've been stretching that liberty somewhat too far already :smalltongue:
The main concerns here are 1. whether private property is to be abolished and 2. whether the economics of the situation either causes a housing boom from everyone being able to afford home ownership (and the associated environmental/space costs) or if the planned nature of society causes more high-rise apartment complexes to be built rather than new subdivisions.1. Nope. 2. Dunno. You tell me :smalltongue:

You would pretty much have to seize their profit via taxation and tariffs, really, so that the individuals only get their government issued salary and if the business wants to expand they have to apply for the government to grant them the funds.I was (very vaguely) thinking that "employee" and "business" would be kept separate, with profits and debts (beyond the set wage) going into the business, not the pockets of employees.

Hmm. Land of differently colored hats. social control of prestige is always something. Could work. Could possibly create racism-like problems down the road, like in that one highschool where the dominant blue-armbander crowd started beating people for being part of the orange-armbander-crowd and I think almost or actually did kill someone before they finally said, whoa, we should stop this social experiment before we ruin some people's lives. Which was a bit late since they already had.Yeah, true.

There could be, but it would mostly be based upon who was who in the old system and managed to retain vestiges of it. Or bank accounts and stocks. if everyone makes the same wage, then the only way to get ahead is to control stock in a company making a profit so as to enjoy a percentage of that profit. So potentially, those at the top would heavily invest in profitable businesses more fiercely due to their legitimate income options being more limited in such a world, since they can't command a fat salary in exchange for surrendering some of their position/backing down in a majority stockholder fight.Hrm.
...
I got nothin' :smalltongue: Okay, what if they do keep everything (or most things) they had in the present system? What if they don't?

Endo: Ah, gotcha.

[V'icternus]

I think it's sort of that I've never heard of a rich muck-worker.

That's because once they have the money, they usually leave to greener pastures. And better jobs.

[Coidzor]

I think it's sort of that I've never heard of a rich muck-worker.

Is more that they're Lower-Middle class than being the lowest run of the working class. Which is a fair bit of elevation, I tell you what.


Hrm. I don't get the stockmarket at the best of times... I'd like to ask "can't we leave that out?" but I think I've been stretching that liberty somewhat too far already :smalltongue:

Vooodoooo *waggles rattle at serps* voodooo economics....


1. Nope. 2. Dunno. You tell me :smalltongue:

I'm not exactly certain of the outcome myself, but if unchanged in western society then the housing market and associated construction jobs would have plenty of work as everyone would be equally eligible (at their baseline before stupidity and foolishness entered into it) for loans. Meaning there'd basically be one type of house built normally with anything else needing to be a custom job. Eventually the extent to which these rings of suburbs could be built would be reached but that's not really within my ability to foresee the future.


I was (very vaguely) thinking that "employee" and "business" would be kept separate, with profits and debts (beyond the set wage) going into the business, not the pockets of employees.

Well, the problem here is that the money is going into the pockets of the owners and shareholders and thus the top rungs and a number of people in the middle are making a significant amount more than their fellows. But maybe this is not problem. *shrug*


Yeah, true.
Hrm.
...
I got nothin' :smalltongue: Okay, what if they do keep everything (or most things) they had in the present system? What if they don't?

If they do, more or less the classes remain the same for a very long time down the road unless other measures are taken to destroy them other than the wages.

If they don't, then I imagine there'll be some manner of violent resistance or at least a diaspora of the wealthy, landed, and high level businessmen.

[Serpentine]

Is more that they're Lower-Middle class than being the lowest run of the working class. Which is a fair bit of elevation, I tell you what.In that case, it'll still be a step up. There's no more reason for them to not go from same to same than to not go from same to better. That is, if there are already occupations that pay better and have better conditions that they don't go to, why then are they less likely to stay when all other occupations have the same pay?

[V'icternus]

Because that's the highest paying job that rewards the skills they have? Take out the "highest paying" part, and you've got a job that matches your skills. You could likely find one that suits you better that is more enjoyable in a world where money wasn't a factor when getting a job.

[raitalin]

What would happen if all occupations paid the exact same amount (with various occupation-related costs paid-for such as a doctor's insurance or a builder's tools, to keep the take-home amount the same)? CEOs, surgeons, teachers, electricians, painters, nannies, coffee-growers, prostitutes, strippers, actors, politians... All get the exact same income, but can spend or save as they wish. How would that effect spending? The economy? Society? Pricing and costs?

Optional variables:
- Income is "per hour".
- Income is "per year".
- Income is "per unit of work" (say, I dunno, per patient, or per m2 painted, or whatever)
- Income is at present "well-to-do" middle-class levels.
- Income is at the high end of present levels (CEOs and the like).
- Income is at or close to current minimum wages.
- Income can change (though the same amount for everyone).
- Income cannot change.
- People can only have one job.
- People can have two or more jobs.


Alright, this question is huge and you could answer it fully with about 2 years of college Econ, so I'll try to keep this as brief as possible.

Firstly, your variables fall into 3 basic catagories: Rate of Income (1-3), Level of Income(4-6), and Variability of Income (7-10).

We have to take the last one first, as it effects the first one: If income is not variable and you can only have one job then the rate of income is irrelevant and static. However, if you can have 2 jobs and your income can change, then you end up with a similar system to what we have in that harder and/or longer work can net you more pay. Assuming this is true while all professions pay the same rate you'll have a movement to longer hours at easier professions.

The rate of income also enables a system where income can be uneven, as pay by hour or unit of work will lead to longer hours at easier jobs. Pay by year is the only one that will lead to static income for all.

The level of income is completely irrelevant in the long term, as currency's value is determined by its rarity. If everyone is paid lower-class wages, you'll get a recession and deflation. If everyone is paid CEO level wages, you'll get hyperinflation. If everyone is paid middle-class wages you'll probably also get some inflation, as there are more lower-class than middle and upper.

So as a control I'll construct the most static of these systems where:
1. Workers are paid yearly
2. Income is set at current middle-class rates
3. Income is not variable; you can ony have one job and income will not change.

In the short term you'll have an immediate collapse of the luxury goods and services market, as the costs of materials that are difficult to acquire and require huge amounts of manpower to find, retrieve and manufacture (e.g. gold, diamonds, exotic woods, plants and animal products, high-quality alloys and polymers) do not fall at a rate to make them viable. Simply because these things are not necessary they will be consumed at a lower rate, and jobs will be lost.

The economy would shrink massively and suddenly, causing the lay-off of many non-essential workers. An economic reality is that while the lower and middle classes provide a stable base for an economy, the upper classes are the driving force for its growth. A real problem comes with existing credits and debits: how would these be resolved with the new values of currency? A doctor that was formerly paying off a loan for a 1mil. house and 80k car is now SOL if debits and credits are not scaled accordingly, so lets just assume they are. Now the finance industry is unable to operate as its working capital is diminished, unless it continues working with the "imaginary" money that has gotten the world into its current financial troubles.

And this leads to another problem: what about income from investments? Most investing isn't done by professional investors, its done by people with other professions. If you can't make money by investing, there's no point in taking the risk. Without investment small businesses and the creation of new technology almost shuts down completely.

Now, at the level of employees we'll have very little short-term change, but in the long term you'll get shortages of people in dirty, difficult and dangerous jobs (sewage, garbage, construction, materials extraction, food production (especially fishing), electric line workers, etc.) and an explosion of people attending 12 years of school to get positions that will almost assuredly be filled when they graduate due to a saturations of the market. You'll also see the various lower level service and manufacturing jobs fill up with no desire among their workforce to pursue advancement, as lower and middle level management get their pay-rates by taking on responsibility, which few will want if no additional pay comes along.

Whew, I'm done for now, but I think I've given some idea of how catastrophic this would be. Of course, if you change any of the variables the scenario could also change drastically.

[V'icternus]

Gee, thanks Serpy... it looks like you're going to pretty much destroy the world with this plan of yours. Way to go.

:smalltongue:

[nothingclever]

How about the possibility that countries might invade each other to gather slaves to do the jobs their citizens don't want to do? Or the government punishes criminals by making them spend the rest of their lives doing the nasty jobs or mass outsourcing to other countries if the world isn't using a universal currency.

[Trog]

I think each person would have to be tested and assigned a career that they could excel in, keeping in mind that some people will have to be ditch diggers because the world needs them. Then they would be in that career for life, likely. To have this system exist and still allow free will in deciding one's career will lead to everyone wanting to choose the easiest (and least time consuming) career since the pay is the same no matter what. And also by doing so you would negate a lot of competition which can lead to innovation.


It's an interesting hypothetical but ultimately this system would fail and another would replace it in short order I think.

[Milskidasith]

Funny... I was sort of expecting people to argue the other way. Why work for that 8 years when you could go to uni for 8 years and get paid for it?

You said paid partly or fully for their education. I kind of assumed that was saying "your education is paid for" not "you are paid to go to college."

Paying people to go to college is a great way to drain funding in order to allow more people to drain funding, IE a very bad economic idea. The entire hypothetical is, at one end, super communism requiring everybody working together and caring more about what job they do than how hard it is (unlikely, but great with mind control!), and at the other end replacing the free market system with something just like it, but with the government controlling it. And since the government would require a ton more work to figure out what a doctor is worth than the free market system would, it would just be a really big waste of resources to get a worse free market in place.

[Miklus]

What would happen if all occupations paid the exact same amount (with various occupation-related costs paid-for such as a doctor's insurance or a builder's tools, to keep the take-home amount the same)? CEOs, surgeons, teachers, electricians, painters, nannies, coffee-growers, prostitutes, strippers, actors, politians... All get the exact same income, but can spend or save as they wish. How would that effect spending? The economy? Society? Pricing and costs?

It is almost like this in Denmark already. The joke is that after taxes, everybody makes the same. Well, almost.

The consequence is that nobody can be bothered to take a long education. It might give a slightly more interesting job, but you actually loose money while under education. This is a problem for the overall economy. There is nobody to innovate and nobody to start any good buisnesses.

[Erloas]

2. Aren't sewerage workers and garbage men and the like (and trades and such) paid very little?

Well I can't say for everything. But my dad knows someone that ran a sewage sucking truck and someone asked him why he didn't get a job out at the mines (the perdominate industry where I live) and he said he couldn't afford the pay cut. For comparision the average hourly job at the mines is about 55-65k a year before overtime.

For a lot of trade skill jobs, pipe fitting, welding, plumbing, electrions, a lot of those jobs start at about $20/hr, but its not uncommon for a lot of the skilled ones in important industries to make $30-35/hr. They don't take masters degrees to do, but they also aren't something that can be done right out of college (at least none of them that require certification for their work). They are hard job, they aren't all that plesent, but people do them because they can make pretty good money at them without having to be really smart or go to college for 4-8 years.

The reason for that is that if they were only paying them $12/hr to do the work no one would do it.

Of course like all things, jobs are paided based on supply and demand. If people really want to live somewhere the jobs there tend to pay a bit less because some people will take less money from a job just to be where they want to live. If your business is in the middle of no where and the conditions kind of suck you had better be prepared to pay employees enough so that they will live there and put up with those conditions, even if it is a rather remenial job.

The oil fields are a very good example of that. The jobs suck, long long days with little time off and a week or two at a time out in the field in mancamps. They get a lot of people wanting to do those jobs though because they pay a lot better then someone without any real educations or job skills can expect to get from any place else.