no third solution

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Salary is a Scam!

August 29th, 2011

Can anyone explain to me how the majority of entry- and mid-level white-collar workers were hoodwinked in to accepting “salary” compensation, rather than hourly compensation?

Before you purists cry “Foul!” let me assure you I don’t give a shit about the CEO’s and senior management. If you are making that sort of money, you pretty much forfeit any right to complain about working too much. I am talking about the run-of-the-mill cube jockey who is earning median-level income, give or take a few bucks.

One theory is that salaried employees have more freedom in setting their working hours, etc., and that if they finish their duties early, they are essentially rewarded with time off from work. Or, to put it another way, you accept a regular salary compensation rather than variable hourly compensation, based on the assumption that in some weeks you will work 50 hours but in other weeks you will only need to “work” for 30 hours, and in the long-run these should balance out.

In practice though, this is never the case.

  • If you are not working 40 hours or more, you will probably be classified as “underutilized”. You will either be:
    • encouraged to make yourself available to assist other employees,
    • or canned as redundant/unnecessary.
  • The idea of a regularly scheduled work week becomes a fantastic memory; you have committed yourself to be available whenever someone else demands.
  • If you are working more than 40 hours, you do will not receive any additional compensation for the hours over-and-above your “regularly scheduled” workweek.

It is pretty obvious that the workers are getting boned by this arrangement: they have signed up for a compensation plan that has essentially zero upside.

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no third solution

Blogging about liberty, anarchy, economics and politics