Econ 103 Value of Labour Essay

The Value of Labour

The value of human labour depends on the productivity that the humans are capable of in a given time. As people have limited time, there is an incentive to be as productive and efficient as possible. Certain things such as technology, (for example time-keeping devices), and education, are used by us humans to make the best use of our limited time, increase our productivity and thereby increase the value of our labour.

Innovation and technology are brought forth by scarcity; scarcity of resources but also the scarcity of time. As humans, we want to use our valuable time to do the most productive thing in the most efficient way. Technology enables us to do this, as well as stop wasting our time on tasks so menial and repetitive that machines can be easily programmed to do them. Thus, when all that is left are jobs that machines cannot do, it is human labour that is in high demand. This causes a rise in the value of labour, especially in jobs that we know will never be replaced by machines (i.e mental health practitioners, educators, lawyers…etc.)

One example of a technology that has arguably had a large effect on the value of human labour are time-keeping devices. The use of pendulum clocks began in the 17th century. Once people were able to tell time accurately, they could realise it’s scarcity more fully. If you know that you only have 24 hours in a day, you will strive to be more productive in each of those hours. Things could be planned and timed, productivity increased, and so did the value of labour.

Education gives people the skills and expertise necessary for them to use their time productively and efficiently, as well as to be suited for jobs that machines cannot do. This means more people are able to do more valuable productive work, increasing the value of their labour.

One of the things that interfere with this natural increase in the value of labour are governments, who impose (most ignorantly), laws like minimum-wage laws and unemployment grants. These impact the value of labour negatively.

Minimum wage laws are the governments’ attempts to make the minimum value of labour, and therefore human time, constant (and therefore fair.) It is an attempt to make the value of labour objective. But value is not objective. These laws means, for example, that a factory employer is forced to pay his workers more than what he was willing to. This could result in him laying off some of his workers to keep his expenses low. These workers now have no money at all, instead of the lesser wage he would initially have paid him. Those who do not lose their jobs have an inflated sense of the value of their labour and so have no incentive to gain skills/experience in the workplace when they know that they will always be paid x amount no matter what happens.

Unemployment grants or basic income grants also interfere with the value of labour. People who are unemployed would naturally seek work and settle for low wages in order to survive, building up their expertise and skills as they go. Now that they are granted money for doing nothing, there is less incentive to work, especially since they likely have no skills and the jobs available to them would pay less than the grant does. It builds a culture of entitlement, and fosters resentment among the hard-working taxpayers whose money goes to those who do nothing.