Wednesday, 25 January 2017

Free market in everyday life.

As I begin writing this I know that the people who might need this explaining to them, are unlikely to even care if they are not going by this wisdom. However, it is simple reality explained. But if a person is gifted at doublethink they can ignore anything!:

So here is a basic run down of free market principles in a minimum wage job:

To start with, clearly if you want your store to work properly, then you have to reward the people who work hard and do the job properly, and somehow discipline or incentivise those who do not do the work properly. There will always be people who do not do the work properly. If you want a clean store, good products, no mistakes with orders etc.

So, lets say that there is work to do once the store is closed. If you have three people working. Then there are two ways to get the work done: 

A) You give each of them a certain amount to do in relation to their roles, and if there is a difference here, i.e. more than one person doing a role then rotate these fairly throughout the week.

B) You simply keep everyone at the store mixing up the jobs so that everyone goes at the same time. Or keep people around until the team leader goes home.

If you intend to reward good work clearly A is the best one. So the person who works well will be noticed as working well. If they are doing a set role then the manager can see the results of that work. If the jobs are mixed up there is no one to notice who does what. With A If the member of staff is efficient they can go home early. With B they are at the team leaders beck and call (which is of course why a team leader may prefer this arrangement).

If you are to follow B the bad members of staff will stay because others will do their work for them if they slack, the good will leave and the downward spiral will continue. If you are to follow A you are more in the free market and this expands to where other free market principles become relevant.

Over time following A you will notice who is doing the work and who is not. You can then bring pressure on those who do not do the work. Under B if there is someone not doing the work the management will likely try and clamp down on everyone, or instinctively choose the more reasonable people to nag because that's what bullies do. The more reasonable, and likely best workers will then clearly leave, if they can. (Under a proper free market system they will leave to a better job, one that works on free market principles and is hence more successful.)

If you are to follow A and you now have a good worker and a bad worker. One who cleans properly perhaps and one who cuts corners. You might have to discipline the bad worker. The reason companies do not want to take it that far is if the bad worker then turns around and says 'well if you want me to do this difficult work then perhaps you should pay me more than minimum wage'. Or the similar 'stuff your job I quit'. 

Also, if a person is experienced and skilled at a job and can get better pay doing an easier, less skilled job elsewhere then the company could lose out from not paying its staff.

This is why they like immigrants at these types of jobs. An immigrant is more likely to need the job so badly they will not complain in general about the minimum wage or bad working conditions. In this way the management can do the easy and unprofessional behaviour of simply shouting when something is wrong rather than dealing with the member of staff or situation more professionally.

Someone who is native to the country will likely have family supporting them, they will be able to reduce their hours and may have other commitments which stops them being able to give their employer maximum flexibility. They will simply leave if shouted at and treated disrespectfully. Then the customers will be dealing with a group of foreign staff which they may or may not be OK with. (Of course under a proper free market they can shop elsewhere.)

This is not the only place where pay is a problem in the free market. Consider a company that does not pay its team leaders properly. The team leader is the leader and sets the rules, and determines a large part of the atmosphere and culture... Will a team leader for instance stand up to someone else who wants to be 'the boss'? If the team leaders are paid badly then a company will lose staff in that role, but will not gain any. So it will continually suffer from a dearth of proper leadership. It will not gain the value of experienced team leaders. Everyone who is any good will leave.

But so what? Without the free market, these businesses will never suffer. They will be artificially supported by mass immigration, they can just go to the airport and pick up some new staff if someone leaves. They will be helped with high entry requirements in the form of taxes and access to capital for their competitors. Why would they care? Most of these people would rather steal from their own mother than pay their staff more!

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