READERS' FORUM
 
     This is your opportunity to put in your two cent's worth.   Please record any comments, demurs, questions , or anything you think I haven't considered in my argument.  Maybe you will come up with something I haven't thought of.  This forum will be edited for vulgarity and irrelevancy.  Otherwise feel free to add to the discussion.  If you have more to say that fits into a comment here, feel free to submit an essay by e-mail which will be published on the essays pages.
 
Visit the forum, and register your comments,      Richard Davis
 
     If we adopt your Free Labor Market, won't competition for jobs drive the price of a job down, down, down to subsistence levels and below, as Marx predicted?  H. Brown, Minneapolis, MN.
     No, because the the cheaper labor becomes, the more valuable it is to purchase.  Employers will want to take advantage of the bargain in labor costs by using more of it.  So as the price of labor falls, more jobs will be added until there is full employment and nobody left to bid jobs down.  That is what we call the Clearing Price.
 
     But what's to keep some fool from bidding the price of my job down, down, down until I can't afford to keep it?  Heather McMannus, Baltimore MD
     If he does, then the more fool he.  You just go out and bid for whatever other job you want, but don't bid lower than is sensible.  Meanwhile the difference between what that fool bid and what the job was really worth goes into the pot and makes the pie that much bigger for everyone else.
 
     If the average wage drops 5% to absorb 5% unemployment, won't we be that much worse off in our income?  A. Gill, Storm Lake IA
     No, because right now those unemployed are not contributing anything to the economy.  Once they are productive, their productivity will be added to the wage pie, which will eventually be redistributed to all of us as we either move on to higher-paying jobs or threaten to and win a raise from our present employer.
     At the same time, productivity will increase as jobs that don't produce anything we want will be replaced by jobs that do.  For instance, every company of any size has  a Human Resources department whose job is to hire people and take care of their benefits.  If jobs are filled in the free market, all a company will need is one person to advertize what jobs are available.  The wage a person bids on will include enough cash for one's retirement fund and health insurance.  Companies will save first by not having to deal with those benefits as separate transactions and second by not having to pay a staff to administer them.
 
     What if you bid for a job you are incompetent for?  C. Landreau, New Orleans, LA
     What happens now?  The employer will have every right to fire you, and less inhibition, because he knows you can easily get another job.  On the other hand, you won't want to get a reputation for taking jobs you are unsuited for.  Anyone can make a mistake, but two or three become a trend that a potential employer has a right to know about.
     On the other hand, a full employment market is in effect a labor-short market, because at the clearing price,  your productivity will translate directly into profit for the employer.  So he will have an incentive to move you to a different position where the job fits you skills.  Employers will have the right to insist on specific qualifications and specific experience.  What he won't have the right to do is to define a job so narrowly that only one person qualifies.  But I would predict that once the Free Labor Market is well established, that won't be a problem, because it simply wouldn't be good business.
 
    What about discrimination by race, gender, or ethnicity?  M. Perkins, Worcester MA
     It is a problem that would automatically solve itself, because it would not make good business sense to raise one's business costs by discriminating.  But even if an employer did wish to discriminate for any reason, it would not affect the economy or the applicant's prospects, because a job or equal value would be out there just waiting to be claimed.  We might well find that jobs are resegregated into men's and women's jobs, but it would be on the basis of a natural division, and as long as there are some jobs that overlap, a woman will be able to get a job of equivalent income, whatever it is.
 
     I think your theory is a load of crap.   Chuck  McK, Augusts, GA.
     You are free to think what you please, as is everyone else.  but that doesn't consitute an argument or a debating point.  I'm as eager as anyone to have the flaws in my argument pointed out .  If I'm right, then my proposal ought to be seriously considered for adoption.  If I am incorrect or other factors outweigh the ones I set forth, then those objections should be set forth.     

     Larry of Ohio asks: I don't know what you mean by a market in free labor. Are you saying any existing minimum wage laws need to be eliminated? How about unions that negotiate contracts which bind both/all parties as to hourly wages?

     In my terminology, a free labor market is one in which any qualified applicant for a job has a right to that job as long as he or she is the lowest bidder. Obviously there can be no question of a minimum wage, But the Law of the Clearing Price will automatically adjust wages to a level far above the present minimum wage, except for people with mental or physical impairments which make the value of their labor less than adequate for their upkeep, in which case the state is obligated to subsidize them.
     Labor unions were set up to use all the social, political, and economic leverage at their command to get their members as high a wage as they can extract from the employer. To the extent that they are successful, the difference between that wage package and the true market value of that labor can be said to be stolen from the Wage Pie. Multiply that by all those who use all the social, political and economic leverage they command to do the same, and you have a deficit in the Wage Pie which must be spread among those with the least leverage in the form of wages lower than the true free market value of their labor or no wages at all. Under the Free Labor Market, such tactics would be not only immoral but illegal.     

     Larry wrote me a lengthy reply to my response. Since it seems too long for this section, I have put it on the Essay Page, where you will find it.

Al from Kentucky writes:

    Your out-of-the norm thinking is interesting but has its challenges as well. If the goal is to wipe out poverty in the US and developed nations then the economic relationship between jobs and poverty levels makes sense. Internationally, undeveloped countries may not have enough employment positions to satisfy the population. For developed nations, a foreseeable problem is bidders could bid salary to zero in an attempt to gain better benefits, such as health insurance, holiday pay, sick time etc. If businesses are willing to go along with the program what incentives would they be able to use to motivate workers to increase productivity?

    I don't profess to have a solution to the problems of underdeveloped countries where the infrastructure is not yet equipped to supply all the productivity needed. But if we solved the problem of underemployment in the developed world, we would be in a better position to help the Third Word develop rationally.

    As for benefits, why do workers need any? If they are working at the true market value of their labor, this value includes the value that goes into benefits. People could afford to buy their own health care and retirement. Work rules would of course be negotiable, but in an economy where everyone is free to change jobs, employers would have a high incentive to create an environment that is worker-friendly. People would be free to negotiate part-time hours, job-sharing, etc. but they would be paid only for hours actually worked. Thus they might negotiate a two-week or five-week vacation but vacation pay would be prorated through the work-year, and it would be the individual's responsibility to save for it, just as it is the individual's responsibility to save for retirement. That might be hard at first, but people would gradually become socialized to it. (Read the novel!)
    The one exception I might make is profit-sharing programs. But these would have to be clearly spelled out to every applicant. I am opposed to stock options for company executives because they encourage policies that may pay off in the short term while not being good for the company's long-term health. Whatever happened to the idea of a CEO doing the best job he can for the job satisfaction that comes from that? McWeb Software - WYSIWYG HTML Web page editor, Javascript effects and DHTML scripts 

 

 

 

                                                              Return to Home