How to Fill The Wage Gap with Equity

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Headlines over the course of the jobless recovery succeeding the financial crisis of 2008 read that unemployment is near record lows in 2016 and that America is working again. But the economic trend lines show that America is working for historically low, wages. This isn’t new news.

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The most pressing problem facing humankind is our inability to allocate equity to individuals that contribute to productivity. The problems may seem like they are related to jobs specifically, but they’re not. Our most pressing problem more complex that assigning a wage for a job that is done in a more productive way today that we previously performed it.

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Humans get better at doing tasks over time. It doesn’t matter if the task is labor intensive or a result of more “soft skill-sets”. Regardless of our ability to produce products of services, humans are either automating themselves to fast more effective and more efficient productivity or, they are refining processes that they’ve become more familiar with. Both of these types of efforts take a toll on the resources exerted to maintain or increase productivity.

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Supplement Wages with Equity Unions

The charts above listing labor and economic trends show that a stagnation of wages is accompanying more productivity. Wage stagnation is another form of joblessness. While we want productivity to continue to grow, we don’t want more people to be left out of the new value that is created from the productivity. We will not solve this problem through supplying jobs that pay individuals for their time alone.

It’s almost intuitive and surely familiar to respond to lingering economic inequality with rhetoric about jobs… creating jobs, protecting jobs, moving jobs, new jobs, old jobs, part-time jobs, multiple jobs… But the jobs aren’t the root cause of the aforementioned problem. Again, the problem is how we value the individuals who contribute their ideas, labour, and experience to jobs. Plainly, the problem is how we pay people and what we consider to be their work. We need to address how we pay people for their time and how we pay people for their influence or IP (intellectual property).

Hands on vs Hands off

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Some years ago, I wrote about “portable value” to start a conversation on how humanity would more broadly assign ownership to property that is not real estate, live stock, or equity contracts known as stocks. To build on the portable value individuals and institutions of all sorts must start to acknowledge and consider the IP that individuals create in their daily toiling and existing. I like to think of work as having a hands on and a hands off portion. It’s all work. Most people are familiar with hands on, which is the type of work that people trade for their time. It can be most easily measured, even to the point where some types of workers “clock in” and out of task oriented work. We even consider the newly coined gig-economy as a solution to working people’s economic woes. Hands off work is brain work that an individual can contribute to an institution before, during, or after their hands on work. Let’s define institution as any organized group of individuals.

Hands off work, can be represented as any product, service, or policy regardless of its formal or informal recognition within the institution. These three types of contributions are provided by individuals. They help institutions organize and refine the quality of their existence. Quality of existence hinges on these three typed of contribution from individuals to institutions and can be measured in two forms, qualitative (effectiveness) and quantitative (efficiency).

Measurement is important because hands off work may exist far beyond an individual’s tenure with an institution. Hands off work, can be simplified as influence. This is nothing new, as equity stake holders have always receive payment in varied forms for their influence on institutions. Still equity is distributed too thinly.

Contributors vs Creators

Inclusion of Influencers for their contributions is at the core of capitalism. Still, we need a paradigm shift in how we view people’s value. Individual’s contributions in the work place are catalysts to the products and services that their institutions claim as creations

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I think it necessary to acknowledge that all collective interaction by individuals compels the output that institutions create. Individuals do not create value, they contribute it. Groups of individuals (institutions) monetize value by identifying value as an owned entity. Our economic system has yet to refine the way in which we assign ownership. Differentiating contributions and creations is the paradigm shift that we require further measure influence as a qualitative and quantitative metric of value.

Measuring Value

With regards to measurement, economists need to start examining value in the same way that engineers examine energy. In previous articles I’ve simplified a theory that I think

Value is constant and pervasive like that if energy. It cannot be created nor destroyed, but can change form.

In the same way that mechanical, electrical, chemical and other types of engineers examine the transformation of energy to empower efforts in their genre, economists need to start looking at value as something that is dynamic and that cannot simply be owned wholly by one entity. Sure equity holders are still going to be necessary to free-flowing shares in publicly traded markets, but the amount of shared revenues with influential individuals (employees and others) who contribute the nurture of good product is missing from the lineage of value as a thing goes from concept-to-product. In this latest context, I’m mentioning product to mean: products services and policy created by institutions.

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At the end of this information age, where we are measuring everything down to the data points of sub atomic particles, we have to start measuring less abstract phenomena like value. It is our sole opportunity to crawl out of a downward economic trend.

Consumers vs Producers

Next we’ll explore and elaborate on consumers vs producers and why they cannot be differentiated in the same way that they used to be…..more to come…

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Philosopher of Inclusionism | Engineered Inclusion Score

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