http://www.washingtonpost.com/wp-dyn/articles/A44141-2004Aug5.htmlThe above is one of a series of columns written by this guy recently in the Washington Post. I came upon them in the course of my media analysis job and they speak to that discussion about the wage gap that got going back here in the comments:
http://www.livejournal.com/users/rm/253576.htmlWhen
heron61 posted a table of wage gap stats, I replied all too vaguely that a smaller wage gap isn't indicative of all sorts of things, and in some cases is the result of bad policy and regulation.
I cited Germany on this front, and the above thing from the Washington Post explains it pretty effectively without actually focusing on that part of the issue.
In Germany the small wage gap is the result of a number of things, including caps on executive salaries both by tradition and regulation, a unionized worker tradition that is part of the corporate culture (corporate boards are 50% regular workers), and what would effectively be the equivalent of "living wage" legislation.
They don't call it that there, but we call it that here, at least in our national discussions about whether the minimum wage needs to be increased. The problem of course is that whether you do things our way or Germany's way, someone is going to get screwed, and honestly it's a matter of choosing what type of fuckage our economy can withstand more effectively.
That's the thing about economics. Someone is always going to get fucked. In any type of economic system. It is an inevitable reality. Economics is the pessimistic science, and too often politicians in a desire to get elected now, make choices that have a delayed impact, in Germany this is particularly true when it comes to job availability for people entering the labor market, in the U.S., social security would probably be the best example.
So why does our minimum wage suck? Because you can't survive on it. Hence the living wage discussions. The problem of course though is if you make the minimum wage something people can survive on, you solve a lot of immediate problems, but you also raise the barriers for entry into the job market, and in our system would ultimately wind up with young, inexperienced overpaid workers (think of it as a mirror universe version of the Internet bubble, but not as funny), leading to a rise in unemployment. This sucks, because people should be able to survive on what the earn, but a significantly higher minimum wage (it probably should be raised, just not as massively as some people are talking about) makes a big mess because it doesn't account for student workers and others who are not working to fund a household. Check out Germany:
Why do German wage guarantees suck? Because skill level within a field isn't differentiated via pay (see the thing about chef salaries in the piece above), labor costs are huge compared to pretty much every other first world country, and productivity is low due to insane working hours and store hours regulations (the store hours regulations are also directly responsible for severely limiting the working women in Germany which has almost no female executives whatsoever, but that's a different discussion). Additionally, they create huge barriers for entry into the work force. Because of mandated apprenticeships in nearly all industries, and massive fines for companies that don't meet these apprenticeship quotas, companies are shelling out tons of money to train workers for jobs that don't exist. Jobs in Germany are designed to support single-earner families, meaning that entry level jobs from a salary standpoint just don't exist... hence their ever increasing unemployment rate, especially among those 18 - 25. It's a mess, and an entire generation is getting screwed.
Anyway, if you're smart, you'll ignore everything I just said, and read the Washington Post column. Or watch West Wing, where you'll at least learn that you should pretty much ignore everyone who thinks they understand economics (and they're right).
As a final aside, don't friend this journal because you think I'm always going to be smart or political. I mean I am always those things, but not always here... and it sucks when people come in because they love one of my more erudite rants and then run off because aside from trying to figure out how the country and the planet and the economy should work, I also talk about people I think are hot, or my acting career or the cantankerous nature of living in NYC.