Having a job is more important to people than how much they are paid, according to the first official inquiry into what makes Britons happy.
Excellent, that does make it simple then, doesn\’t it?
Lower everyone\’s wages and everyone will have a job and thus everyone will be happier.
No, really, this works. Unemployment is evidence that wages are too high for the labour market to clear. Lower wages and it will clear.
Job done.
Gosh, aren’t easy answers easy? Except consider the millions who in your opinion should have a downwardly variable income, yet whose debts are fixed in nominal terms and whose other living expenses (esp. food, energy) are rising. Is this a case of Dives laughing at Lazarus?
Sackerson: ever heard of the reductio ad absurdam? People say salary matters less than having a job, but if you carry it through to its conclusion, you can see that for people in a job, salary matters more. As you so well demonstrate.
Sackerson – isn’t it worse for those who are unemployed, and whose debts are fixed in nominal terms and whose other living expenses are rising?
Sackerson, tell you what mate: why not pass some laws to make everyone richer and, er, oh, wait a minute…….
When you say ‘lower everyone’s wages’
a) how?
b) why won’t there be an impact on incentives to work?
c) why won’t they demand a pay increase?
I’m not an expert or even an amateur, only picking up bits and pieces from this blog and others but I think one method of lowering wages is to allow inflation to take its course.
That’s a good answer, but it doesn’t have a micro-foundation, nor can it be said to be desirable.
If you’ve negotiated a salary with your employer that you both believe to be fair, why should general price inflation change it? And why is it desirable that such market signals are obliterated in that way?
Unemployment is evidence that wages are too high for the labour market to clear. Lower wages and it will clear.
Not so simple. In a complex economy where skills are specialised, labour is not a fungible commodity. Unemployment is evidence that the unemployed have unrealistic wage expectations, considering the current state of the demand for their skills (or lack thereof). This may be caused by the fact they have fixed outgoings or that they can claim more in benefits than the market offers them.
I don’t see why lowering the general wage level of the population would reduce unemployment. Assuming most employees earn their higher wages through higher output because they are skilled, cutting wages arbitrarily would blunt the incentive to become skilled and damage the chances of the unemployed learning skills that get them into jobs.
@ Tracy – yes, but kicking a few more people off the bottom of the ladder to join them won’t help
@ Johnathan – wish I could. Meanwhile we could do with a few less Bounderbys.
Sackerson, what are you talking about? Tim’s idea is to lower wages, thus getting the unemployed a job, thus kicking them up onto the ladder. Which is the opposite of kicking them off a ladder. “Kicking a few more people off the bottom of the ladder” would be the result of, say, raising the minimum wage (all else remaining equal). Rather the opposite situation.
It’s all in the phrasing isn’t it? It’s more important to Person A that Person A has a job, than that Person A is well paid.
It’s not automatically more important to person A that all Britons have a job, than that person A is well paid.
This doesn’t make much sense.
Surely it depends who you ask?
If you don’t have a job and have never had a job and no one around you has a job then how do you know what you are missing?
If you have worked and felt more satisfaction from working than not working then having a job is more important than what you are paid.
When you get a job and hopefully make yourself more employable as a result then how much you are paid seems to be more important than having a job where you are currently employed.
If you don’t have a job and have never had a job and no one around you has a job then how do you know what you are missing?
You might still however be bored out of your tree.