Wages, Productivity and Employment

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In the fall of 1976, the group ABBA released their hit Money, Money, Money. This song reflects on the working class individual working hard every day for what, to make money and pay the bills, fantasying what it would be like to be the rich man. Money is the driving force of our society and without money what would our world be like. Everyone wants money, everyone works for money, but are we being paid a fair dollar for what we do or is income inequality playing a role in our paycheck?

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What is the definition of income inequality? Merriam Webster defines income: as a gain or recurrent benefit usually measured in money that derives from capital or labor. Merriam Webster also defines inequality: as the quality of being unequal or uneven, disparity of distribution or opportunity, or the condition of being variable. Combining these two definitions, income inequality may also be defined as the gap between what the CEO earns and the average worker earns working for the same company, the wage difference between a woman employee or a male employee, or the variance in wages of that of a white individual or a black individual.

So how does income inequality affect our society? Income inequality affects our society by stereotyping an individual based on their race or sexuality not based on their ability to perform the job. The pressure has always been on corporations to make the most money for the lowest amount of cost. The easiest method for a corporation to cut cost is to adjust the wages of their employees or outsource the jobs to countries that pay a lower wage to their employees. Katalin Botos notes in her article, Effects of Income Inequalities: Society and Economy, Over the past two decades, wages and salaries have stagnated, or actually declined in the US (384). This decline in wages or salaries has caused individuals to fall into a lower class and possibly into a poverty level.

Data has shown that Income inequalities have increased extremely in the US in the last quarter of a century (Botos 385). Anne Lowery writes in her article, The Rich Get Richer Through the Recovery, The top 10 percent of earners took more than half of the country’s total income in 2012(Lowery). From 2000 through 2006, the number of Americans living in poverty increased 15 percent.(Income Inequality in America). So is the United States really the land of opportunity or as the saying goes, the rich keep getting richer and the poor keep getting poorer? Katalin Botos writes The American dream that anyone can make it to the top, will remain as it is: a dream… (386). Is this how we want our society to be or do we want to improve the gap in the income inequalities?

The theory to solving income inequality is that society should pay each individual equally. Society would take the highest wages and the lowest wages coming up with a median wage for each individual. Individuals would be happy because there would be no division between upper class and lower class, each individual would be equal. The downfall of this theory would be the loss of the desire to succeed. Individuals would not strive to achieve a higher goal due to the fact why should they, we all make the same money no matter the job. If everyone makes the same wage there will always be that one employee who puts in 110% effort into a job and another individual who only puts in 50% effort, should they be paid equally? We are then back to inequality between workers because why it is fair for one to be working at 110% and another to be working at a 50% level.

Looking into this theory as a society are we able to change this process or is it going to continue to spiral out of control. A policy that could be placed into effect would be that of individuals are paid on their productivity, performance, and knowledge of the job they are doing. Cobb and Flannery state that Firms play a central role in how workers are matched to jobs and how they are rewarded for their labor (331). Productivity would be based on a standardize number or expectation of the job. Performance would include showing up to work, working your assigned schedule, and attitude while at work. An individual would need to know their job, by knowing the job the individual would be able to perform the job correctly and be productive at it. Katalin Botos writes This democratic structure would be the foundation where each individual could get an opportunity to make best use of their capabilities (386).

In conclusion, placing this policy of wages based on productivity, performance, and knowledge of the job will assist in rewarding those individuals who want to work and want to get ahead in life allowing those individuals that do not want to work the option not to get ahead. The policy would not be excluding anyone, everyone would be given the opportunity, but it is up to the individual what they choose to do with it. Society still has a difficult task ahead of them attempting to solve the income inequality of the nation. There will be individuals in our world that still believe they are not being paid a fair wage for the work they do and there will be those individuals who are content with what they are making along with doing. As ABBA put it in the last verse of their song All the things I could do, If I had a little money, It’s a rich man??s world (ABBA).

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Wages, Productivity and Employment. (2019, Jul 01). Retrieved February 6, 2023 , from

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