How wages should compensate for what is most important
Time is money as the saying goes, yet when it comes to being paid for the work you have done how are the wages determined? The short answer is supply and demand.
In a labour market with lots of workers (high supply) and a few jobs (low demand), the wages will be low. If there are lots of jobs (high demand) only a few people can do (low supply), then the wages would be high. Of course, this is a simple theory and there are several other variables which will affect the price of wages. In a way, workers are going to an employer saying “I am here to offer my labour to your business”.
However, I believe we need to change this classic paradigm because it is no longer our labour we are offering but our time. Some businesses practice this (for example in Australia) where employees will be paid more on a weekend or night shift. This is because fewer people want to work those hours yet there is higher demand for it, so the wages increase.
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”– Adam Smith
Another way of considering it is the difference between a young adult and a parent. A young adult is going to be less concerned about their days off so long as they still have enough time for a social life. However, a parent is going to be more aware of their time constraints because they have to balance work with being an active parent. For the young adult time is in high supply whereas for the parent it is low.
There is of course a subjective value to setting wages. One person might be happy to receive minimum wage while another of equal experience may demand slightly more. If we ask people to put a price on their time rather than labour, how would this change their perception of their “worth”?
Indeed, time is money. Yet as people increasingly demand a greater work-life balance perhaps it is time to reconsider the price tag.