The government should set a fair wage based on market data
We cannot rely on the market to fix wages. The market wages depend largely on bargaining power. The worker is at a weaker position relative to the employer and has to accept a wage that is lower than a "fair rate".To overcome this weakness, the workers have to join a trade union and bargain for better wages and working conditions. In some cases, they have to go on strike. This is a destructive process.
What is a better way?
The government can use the data of the wage levels for different occupations fix the recommendation wage for each occupation and skill level. This is a "fair wage" and takes into account the supply and demand for the occupation. It overcomes the distortion caused by the relative bargaining power.
When I describe this system to a friend, he asked - are you advocating a communist system?
I replied - I am advocating common prosperity.
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1 comment:
A lot of households depended on maids to buy groceries or food. Their safest way of payment they gave the maids cash money to pay. Generally cashless does not work all the time.
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