Is the large increase in inequality in America in recent decades driven by wider pay ranges within each corporation? No. The big divergences in salaries are happening between corporations.
The bigger driver of inequality, then, is that companies are becoming more specialized: Some employ mostly high-paid workers, and others mostly low-paid ones.
I'd like to see companies ranked by average pay vs profit growth rate. Are the companies with highly paid workers on average growing their earnings faster than companies with lower paid workers?
There is another angle to this story: Outside orkplaces both automation and greater segregation of neighborhoods by income are reducing the exposure of well paid people to lower income people. Well, the same phenomenon is playing out inside workplaces. It used to be that big industrial corporations employed most of the higher and lower earning people. Now companies that do a lot of design and development outsource manufacturing. Also, more manufacturing is done by machines. So companies are becoming places which insulate people by economic and cognitive strata.
Companies gain public relations advantages if they only hire highly paid workers who generate high value. They are able to brag about their great benefits and working conditions. By contrast, look at companies that utilize a lot of low value and low paid workers, Uber, for example,. Social Justice Warriors are upset at Uber over how much Uber drivers make. Reihan Salam argues that it isn't Uber's fault that there is glut of people available to do low skilled work with limited demand. I agree with Reihan. But the SJWs really don't want to know this.
My guess is that neither Plouffe nor Whetstone will make the most compelling case for Uber, which is that service jobs are often pretty terrible and that even if driving on the Uber platform is terrible too, it is, at the very least, less terrible. That is not a very sexy slogan. Yet it happens to be true. What critics of Uber need to understand is that their real gripe is not with Uber. It’s with larger forces that are making it extremely hard for service workers to make a good living, whether they’re driving cabs, washing dishes, mowing lawns, keeping offices and homes neat and clean, or doing clerical work.
Of course, a company with an overwhelmingly highly paid workforce can hire some administrative assistants and janitors, pay them really well, provide lots of perks in the workplace, and tell the world that the corporation's leaders are a bunch of great guys. This can work. I expect we'll see a lot more of this in the future as companies increasingly specialize by doing work in a narrow cognitive range.
|Share |||By Randall Parker at 2015 May 30 08:22 PM|