Your pay depends on your productivity and occupation. If you earn roughly the same as others in your job, with the precise level determined by your performance, then you’re paid market value. And who can question something as objective and impersonal as the market? That, at least, is how many of us tend to think. But, we need to think again, according to Jake Rosenfeld, associate professor of sociology in Arts & Sciences at Washington University in St. Louis.
With his new book, “You’re Paid What You’re Worth,” Rosenfeld challenges the idea that we’re paid according to objective criteria, while placing power and social conflict at the heart of economic analysis.
“The core question that animates me — at least in my day job — is who gets what and why? This is the book I’ve been thinking of writing for a few decades now, and my hope is that I’ve provided a new perspective to everyone out there who has ever wondered about what determines that number on their paycheck,” Rosenfeld said.
Job performance and occupational characteristics do play a role in determining pay, but judgments of productivity and value are also highly subjective, according to Rosenfeld. What makes a lawyer more valuable than a teacher? How do you measure the output of a police officer, a professor, or a reporter? Why, in the past few decades, did CEOs suddenly become hundreds of times more valuable than their employees?
The answers lie not in objective criteria but in battles over interests and ideals. In this context four dynamics are paramount: power, inertia, mimicry and demands for equity. Power struggles legitimize pay for particular jobs, and organizational inertia makes that pay seem natural. Mimicry encourages employers to do what peers are doing. And workers are on the lookout for practices that seem unfair.
Drawing on cutting-edge economics, original survey data and compelling stories, Rosenfeld’s new book shows how these dynamics play out in real-world settings.