One-paragraph explanation of compensation rates

[KingNothing]

Goal: to very concisely explain how & why certain people are paid a particular dollar amount (in the USA).

I'll go first:
In the US, compensation is generally based on the availability of labor, and the value added (expected revenue gain) by your work. Thus, skills which are very common but rarely needed are the least valuable in terms of making money.

 

[JaredJames]

People are paid based on the demand for the work they do and the number of available people to fill those jobs and skill level required. Where candidates are equally skilled for the position, pay may be determined by the 'lowest bidder' or simply personal choice by the employer.

This sounds suspiciously like homework. Why could you need such a thing?

 

[Ken Natton]

It is all about the market. The question has often been asked – why do we pay our sports stars such obscene amounts of money and pay our nurses and teachers so poorly? Because we the consumers are prepared to pay over inflated prices for tickets to the see the game, for our subscriptions to television channels covering the sports, and to buy the products that are advertised at the game and on those TV channels. But we expect to pay as little as we possibly can for our education and our health care, and we grumble and begrudge every penny we are made to pay for them.

 

[S_Happens]

What's the point of speaking in general? I see your point about athletes vs teachers, but you said in general. Is that the specific comparison you want to discuss?

I know of many jobs that have thousands on the waiting list for a handful of positions that do not require much specific pre-training (1-2 years of community college, 2 years similar experience, or sometimes even just high school), that pay far above the median (close to quite a few league minimums, especially when benefits are accounted for). On the job training may take 6 months to a year, so all the positions couldn't be IMMEDIATELY filled with untrained people, but there is really not that much specialization. There are FAR too many people qualified for it to simply be based on skill (especially since the required skills aren't that uncommon), so it almost comes down to a lottery. In this case these are companies that make huge profits, so similar to teams that can pay professional athletes because fans are willing to pay a large amount of money, minus the very specialized skillset.

There are also private schools, where people can choose to pay large sums of money for eduction vs government funded. I'm not sure if you can ignore this small percentage. By number of people it is small, but difference in income might be significant.

I'm sorry that I didn't follow your guidelines, but to me it is pointless if not impossible. For me, any general statement would be too general to be of any value. Maybe I could make the paragraph itself appear to be concise by keeping it short, but the description could never be.

 

[mathwonk]

as the guy in the airline magazine says: "you make what you negotiate". by the way i am making nothing for my valuable service here, except for the pleasure i derive, and the time i lose doing it.

 

[KingNothing]

I think it's a good exercise in speaking. Conveying ideas concisely and effectively is an art form and I believe my question holds merit in that regard.

I also do volunteer work with a refugees who are entering the job market. A lot of them are baffled by compensation rates because their home countries do not follow the same sort of patterns that the US does. I don't have time to give an in-depth explanation, but I do want to help them understand. Is that a good enough reason? Sheesh.