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Originally Posted by smooth
So a very simple example: you have $100 dollars to spend on labor.
You can follow the American model: hire one worker @ $10/hr and work him 10 hours.
Or the European model: hire two workers @ $15/hr and work each of them for 3 hours.
Then it becomes an empirical question as to whether or not productivity would increase 3 fold. If I understand him correctly, Rifkin's argument is that it does.
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How would this model be better for the worker?
The American goes home with $100.00 gross.
The European goes home with $45.00 gross.
That American will make over twice what the European will. Factor in tax rates and the difference is even higher.
I may be reading your post wrong, but that just doesn't make sense to me.
Manx -
When it comes to menial labor, productivity isn't always an issue. Only so much can be done in a certain time. What matters to me is what the value of that job is.
For the example, I will be specific. Our firm provides a unique engineering service to our client. Currently, we are the only company in a multi-state region capable of handling the type of work we do. Right now our competition is our customers themselves. What I mean there is that most of our clients have the ability to do what we do in-house. We do it better/cheaper/etc. and people choose to use us instead of their own in-house engineers.
Right now, we spend a lot of time doing things that hold very little value to the finished product. i.e. driving, picking stuff up, dropping stuff at customer's, etc.
Now, add the fun part: there really is no way of learning what we do unless you learned the skills while working for a different company (i.e. you can't go to any school to train on our industry). By that fact, getting a skilled worker is rare and very valuable. An unsklled worker holds very little value to us other than by taking care of the menial work.
For a skilled worker, I would pay around $30.00/hr.
For an unskilled worker, who would just be helping out, I would pay no more than $8.00
Anything above the $30.00/hr, at first, is not worth it to me (I can only charge my customers so much before they look elsewhere/or go back to their in-house options).
For the unskilled worker, $8.00 would be pushing it. For the tasks this person would be done, productivity would not be the issue (i.e. I expect a certain level to begin with and don't have high aspirations for considerably more productivity). For example: I need someone to pick up/drop off packages at our customer's locations. There is a definite limit as to how much can be done in one day (i.e. driving speed, traffic, distance, etc.). Even if I pick up some kid who wants to work his ass off, he will only be able to get XX done each day. Paying him more, whether by force or voluntarily, makes the kid too expensive to keep/hire.
Then, add the work ethic of the average American worker who gets around $8.00/hr and you will see what I mean. How many people will I have to replace at the $8.00/hr level? Probably quite a few. That makes an additional cost and an additional burden to me.
The hope is that I find somebody who understands the concept of entry-level, starts low, learns the business and then becomes worth more money to me. Once that happens, I would happily pay that person more money.