Millionaires and Wage Slaves
A Fair Day’s Pay for a Fair Day’s Work?

The vast majority of working people slog away in factories and offices for the best part of their lives with nothing but a meager pension at the end of it – and even that may be in doubt – while the "fat cats" walk away with millions for making no useful contribution whatsoever. "A fair day's pay for a fair day's work" – a fine-sounding slogan but hardly a reality today.

So what is "A fair day's pay for a fair day's work"? Can it be calculated or objectively defined? The answer's "yes". And it's already happening.

For many years, government agencies and corporations large and small have been using a system of job evaluation to evaluate the work contributed by each employee. Each job is analyzed, and its essential characteristics and demands, such as training, responsibility, working conditions and physical/mental effort involved, are measured on a series of common scales. The job "value" is then directly related to remuneration. In this way, pay is fair, both in relation to the work done, and in relation to the pay and the work of others.

Work evaluation can ensure remuneration stabilization. What about price evaluation?

A factory's, or a business's total costs consist of three elements: bought-in raw materials and components, the direct labour added in the factory, and third, the costs of capital write-off, overheads and finance. From these costs a Unit Production Cost can be calculated for each product or service. Add the net profit to get the Selling Price. How is the net profit disposed of? Currently the answer is 'the shareholders' - not just as a reasonable dividend, but through the ever-increasing use of buybacks and other devices which serve mainly to reward the already over-paid executives.

An alternative approach now gaining currency would set limits on the total remuneration in whatever form a company pays its executives and shareholders.

In summer of 2019 CEOs from 181 of the world's largest companies, members of The Business Roundtable declared that the purpose of a corporation is not just to serve shareholders (their official position since 1997), but "to create value for all stakeholders" including employees as well as customers. Indeed, it is the customer who pays the price and generates the profit; with this view a further claim on profits would come from the consumer in the form of lower prices.

As productive efficiency increases, so production costs fall. And passing on part of the gain to the customer in the form of lower prices increases product demand thus lowering production costs yet further, thus benefiting both business and customer.

Deflation – a Rich Reward

Inflation is a permanent feature of every world currency today, and though economists and politicians seem quite comfortable with its existence, even promote it (yes really), inflation is a manifestation of gross monetary mismanagement, for it is a denial of one of the two basic purposes of money: that it should serve as a store of value. Sensible people put their savings into property which pushes up prices, and explains why 'a home of your own' is now simply a dream for young folks living with their parents well into their thirties.

The longterm result of productivity maximization, combined with the stability of a labour-based monetary system, is negative inflation. As productivity increases, the labour-content decreases, and it becomes possible for goods and services to be produced and offered at lower prices, thus progressively lowering the cost of living. Your money buys more each year, not less.

This in turn means that as we get older we can look forward to increased purchasing power for our savings. A wild dream? No. This is as it should be, the normal course of events. We should be increasing productivity, producing more and better at less cost. And with a stable monetary unit, increased productivity involving less labour should be reflected in lower prices.

Ultimately the idea of living in a society where the cost of living goes down slowly, year by year instead of up, where your savings are not only safe but increase in value as productivity reduces prices, where your domestically produced goods get progressively better and cheaper, where a fair day's pay for a fair day's work in decent conditions is an accepted norm rather than an on-going battle... it may all seem utopian.

But it's possible.

Development Banking can spread growth across the nation, creating jobs and providing the wherewithal for existing companies to increase their competitiveness and productivity.

Productivity in Government Government takes half the nation's income. It needs to maximize its own productivity.