Equally preposterous is the justification for inequality from the supply side of the labor market. In a review of Eric Schutz's fine book, Inequality and Power: The Economics of Class, I wrote:
"Let us imagine, as Schutz does, a man making a labor market decision. Assume that he has complete knowledge of the wages and benefits associated with every occupation he is considering entering. He also knows what it will cost him in terms of schooling and training to be eligible for employment in each occupation, as well as the income he will have to forego by not working while he is getting the necessary schooling and training. Any particular disamenities of an occupation, such as physical danger, are also costs of entering it. Given these considerations, what will he do? He will assess the costs and benefits of each occupation and choose that for which the difference between the two is the largest. Implicit in this scenario is a wage for each occupation that at least covers the cost of entering it. Competition in the marketplace will, in fact, make the wage just equal to the entry cost. An occupation with a wage higher than the entry cost will attract new applicants; thi! s will put downward pressure on the wage and upward pressure on the costs (as more people demand schooling and training); and eventually, the above average wage-cost difference will disappear. The implication of this theory is not intuitively plausible. It is that, while some workers earn higher wages than others, higher wages must reflect higher entry costs. In a sense, then, a doctor is not really better off than a motel room cleaner; in terms of wages minus costs, they are in exactly the same position. Voila! At least as far as labor income is concerned, there can be no inequality." _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
