3/17/2017 09:05

Sharing Equally

Back in the 1980s, a time which I, being now an old man, can remember very distinctly, there was a hint of economic recovery. That is to say that we were at the verge of relaxing financial strictures which are chronically imposed at the first signs of a downturn in the economy. In particular, a small pool of money was to be set aside for the first increases in payrates in some years.

With this token amount to be divided among all employees, the question of fair distribution arose in conversations throughout the workplace. One good thing about a policy of giving no pay increases to anyone is that there can be no question about its fairness; it is a policy which is fairly unfair to everyone. With a policy of increase, every eye is turned to how the increase is to be allocated -- and every nose opened to detect the slightest whiff of inequity.

There were 2 schools of thought among the employees about how best to share this March-like early hint of growth. On the one hand, many of my colleagues argued for a uniform percentage increase in everybody's pay. Take the pool of new money, divide by the current total payroll to get a percentage increase, and apply that percentage to the payrate of each employee. Everyone would benefit, the same rate of increase would be applied to all, and social relationships would be unaffected. What could be fairer?

The other school of thought held to a uniform dollar increase in pay for every employee. Take the available pool of new money and divide by the number of employees; give everyone exactly the same increase. Everyone would benefit, all would benefit by the same amount, and the people who had been most on the edge of financial disaster would be the most relieved. What could be more fair than that?

I noticed at the time that a majority of employees at higher payrates argued for the percentage method and that employees at lower payrates argued more often for equal dollars. Curiously, neither camp seemed to notice that their preferred solution would allocate more money to themselves. All were convinced that their only concern was fairness. The adherence of others to a differing opinion (which was clearly less fair) was inexplicible.

I would boast that I myself inclined slightly toward equal dollars and that I did so with my eyes open to the fact that the percentage method would have given me a larger raise. This boast might ring more hollow if we take a step back and remember that on the downside of that same economic cycle I had retained my job only because I had been given a special exemption as an "essential" employee.

In those days employers were still trying to avoid cutting the pay of their employees in the face of economic downturns; it was considered more humane to fire a few people outright in the hope that they would take all the anger and frustration with them when they left. Now that cutting pay is seen to be more broadly useful we can finally resolve the controversy by the simple expedient of applying the equal dollar method when cutting pay and the equal percentage method when payrates are being broadly increased.

In this way employers can enfold themselves in an unassailable mantle of fairness even while -- in actual reality -- they shift resources from the laboring poor toward the higher strata of compensation.