Chap. 10b, Part I: Inequalities from the Nature of Employments

Constancy of Employment

  1. 14 Wages vary with the constancy or inconstancy of employment.

15 “Employment is much more constant in some trades than in others.”

  • In most manufactures, a journeyman may be sure of employment almost every day.
  • A mason or bricklayer, on the contrary, cannot work in bad weather.
    • His employment depends on the calls of his customers.
    • He frequently has no work.
    • His earnings must maintain him while he is idle and compensate his anxiety and despondence.
    • Where the earnings of most manufacturers are nearly equal with the day wages of common labourers, the earnings of masons and bricklayers are generally 50% or 100% more than those wages.
      • Where common labourers earn 4 or 5 shillings a week, masons and bricklayers frequently earn 7 or 8 shillings.
      • Where common labourers earn 6, the masons and bricklayers often earn 9 or 10.
      • Where common labourers earn 9 or 10, as in London, the masons and bricklayers earn 15 to 18.
  • Skilled labour, however, is not easier to learn than the labour of masons and bricklayers.
    • Chairmen in London are sometimes employed as bricklayers during summer.
    • Their high wages are not the recompence of their skill.
      • It is compensation for the inconstancy of their employment.

16 A house carpenter has a nicer and more ingenious trade than a mason, but not in most places.

  • His day-wages are lower.
  • His employment also depends on the occasional calls of his customers.
    • It is not interruptible by the weather.

17 When the trades which usually afford constant employment do not bring constant employment, the wages in those trades are always higher than the wages of common labour.

  • In London, almost all journeymen artificers can be hired and dismissed by their masters daily and weekly in the same way as day-labourers.
  • The lowest order of artificers in London are journeymen tailors.
    • They earn half a crown a day, though 18 pence are the wages of common labour.
  • In small towns, the wages of journeymen tailors are rarely equal those of common labour.
    • But in London, they are often unemployed for many weeks, particularly during summer.

18 When the inconstancy of employment is combined with the hardship, disagreeableness, and dirtiness of the work, it sometimes raises the wages of  common labour above the wages of the most skilful artificers.

  • A coal miner working by the piece at Newcastle earns double the wages of common labour.
    • In Scotland, he earns three times.
    • His high wages arise from the hardship, disagreeableness, and dirtiness of his work.
    • His employment is constant.
  • The coal-heavers in London experience hardship, dirtiness, and disagreeableness, almost equal that of coal miners.
    • The employment of coal-heavers is inconstant because of the irregularity in the arrivals of coal-ships.
    • If coal miners earn double and triple the wages of common labour, it is reasonable that coal-heavers should earn four and five times those wages.
  • Coal miners earn from 6 to 10 shillings a day.
    • Six shillings are about four times the wages of common labour in London
  • The lowest common earnings may always be considered as the earnings of the majority.
  • If wages were higher than necessary, competition for those wages would soon increase.
    • This competition would quickly be reduce wages in trades which have no exclusive privilege.

19 The constancy or inconstancy of employment cannot affect ordinary profits of any business.

  • Whether the stock is employed or not depends on the businessman and not on the business.

Trust

  1. 20 Wages vary according to the trust reposed in the workers.

21 The wages of goldsmiths and jewellers are superior to other workmen because of the precious materials with which they are entrusted.

22 We trust our health to the physician.

  • We trust our fortune, life, and reputation to the lawyer
  • Such confidence could not safely be entrusted to mean or low people.
  • Their reward must give them that rank which so important a trust requires.
  • Their long and expensive education, combined with the trust needed, enhances their wages.

23 When a person employs his own stock, there is no trust

  • The credit from other people, depends, not upon the nature of his trade, but upon their opinion of his fortune, probity, and prudence.
  • The different profit rates, therefore, cannot arise from the different degrees of trust reposed in the traders.

Risk

  1. 24 Wages vary according to the probability or improbability of success.

25 The probability that any person will be employed in the occupation he was educated for is very different in different occupations.

  • In the mechanic trades, success is almost certain.
  • In the liberal professions it is very uncertain.
  • If you put your son as a shoemaker’s apprentice, he will no doubt learn to shoes.
    • Send him to study law and there is a 5% chance that he will be able to enter the law profession.
  • In a perfectly fair lottery, those who draw the prizes should gain all that is lost by those who draw the blanks.
  • In a profession where 20 fail for one that succeeds, that one should gain all that should have been gained by the unsuccessful 20.
    • The 40 year old successful law counsellor should receive the retribution of the more than 20 others who failed, on top of the recompense for his education.
    • The extravagant fees of law counsellors are never equal to their real retribution
  • The income of all workers in common trades will generally exceed their expense.
    • The income of all counsellors and law students in all courts, bears but a very small proportion to their expense, even though their income is high and their expenses are low.
  • The lottery of the law is very far from being a perfectly fair lottery.
    • They are under-recompensed like many other liberal and honourable professions.

26 Despite these discouragements, the most generous and liberal people are eager to crowd into them because of:

  1. The reputation attached to the superior excellence in them
  2. The natural confidence which people have in their own abilities and good fortune.

27 To excel in any profession is the most decisive mark of genius or superior talents.

  • Public admiration always makes a part of their reward.
    • It makes a big part of that reward of the physician
    • It makes a bigger part in the reward of law.
    • It makes almost the whole reward in poetry and philosophy.

28 There are some beautiful talents which commands admiration but when used for private gain is considered as a sort of public prostitution.

  • The monetary compensation of those who use talents for private gain, must be sufficient to pay for:
    • The time, labour, and expence of acquiring the talents
    • The discredit it brings as the means of subsistence.
  • The basis for the exorbitant rewards of players, opera-singers, opera-dancers, etc. is:
    • The rarity and beauty of their talents
    • The discredit of employing them this way
  • At first sight, it seems absurd  that we should despise them yet highly reward their talents.
    • While we despise them, we must reward them.
  • Should the public opinion about them alter, their recompence would quickly diminish.
    • More people would apply to them, and the competition would quickly reduce their recompense.
  • Such talents, though uncommon, are not so rare.
    • Many possess them in great perfection but do not use them
    • Many more are capable of acquiring them if there were any honourable use.

29 The over-weening conceit which most people have of their own abilities, is an ancient evil remarked by philosophers and moralists of all ages.

  • Their absurd presumption in their own good fortune, has been less noticed, but is more universal.
    • Everyone has some share of it.
  • Everyone overvalues the chance of gain and undervalues the chance of loss.
    • No one values the chance of loss more than it is worth.

30 The universal success of lotteries proves that the chance of gain is naturally over-valued.

  • The world never saw a perfectly fair lottery where the whole gain compensated the whole loss.
    • The undertaker could not profit from it.
A lottery ticket, 1814

A lottery ticket, 1814

  • In state lotteries, the tickets are really not worth the price paid by the original subscribers.
    • Yet they sell for 20-40% advance.
    • “The vain hope of gaining some of the great prizes is the sole cause of this demand.”
  • The soberest people do not think it wrong to pay a small sum for the chance of gaining £10,000-20,000.
    • Although they know that even that small sum is perhaps 20% or 30% more than the chance is worth.
  • In a lottery where no prize exceeded £20, there would not be the same demand for tickets.
    • To have a better chance, some purchase several tickets while others purchase small shares in a still greater number.
  • This is the most certain proposition in mathematics: that the more tickets you buy the more likely you are to be a loser.
    • Buy all the tickets in the lottery and you lose for certain.
    • The more tickets you buy, the more you are certain to lose.

Next: Book 1, Chapter 10C: Insurance Retail

Words: 1446

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