No they shouldn’t. There is a large supply of people capable of cleaning toilets. And a relatively smaller supply of people capable of writing software.
Do you think all the people cleaning toilets for little money prefer their job over sitting in a comfortable office and getting well paid? If not, then there have to be barriers.
Here are some. You need time, you may need additional education before you can even start to tackle programming. You might have to move. You might just not be smart enough. You might not be an autodidact and need a teacher which might cost money. You need a computer for which you might not have the money.
Most people have computers. You don’t need to be in any particular place to learn to program as long as you have internet access.
But yes, you might not be smart enough. Which was the point. The supply of people smart enough to program is smaller than the supply of people smart enough to clean toilets. Programming is a more complex and difficult skill than toilet cleaning, which is why it’s more highly compensated. So is being a CEO. Like these are clearly not equivalently difficult things, so why do you think they should be compensated equivalently?
As I said, in theory. Maybe I should better have said in a naive theory, but it does not seem to uncommon that the argument is made that people will just find other job if their current job disappears which, at least to some extent, implies flexibility in what kind of jobs someone can do.
Ignoring everything, I also think it would be natural that everyone has the same wage - if you work for an hour it costs you an hour of your lifetime, no matter what you do. You get a bonus for unpleasant, physically demanding, or dangerous work. Every deviation from that due to supply and demand seems generally undesirable. For unskilled labor the abundance of supply - everyone can do unskilled labor - is used to bring the wages down to the bare minimum, often in combination with those jobs being unpleasant work. On the other end a lack of supply allows workers to demand inflated salaries compared to their time investment taking money away from everyone consuming products and services they are involved in.
And I am aware that we need some differential in wage levels to steer what kind of jobs people want to take and that some jobs need longer education and therefore should pay more to compensate for the time spend in education and whatnot. This is just what I think should be the ideal situation under completely idealized and unrealistic circumstances. Or phrased in another way, I think it would be good to make policies that try to make everyone earn the same amount as long as they do not compromise important signaling functions of wage differentials.
> Ignoring everything, I also think it would be natural that everyone has the same wage - if you work for an hour it costs you an hour of your lifetime, no matter what you do.
And you would be incorrect that this is natural. If two monkeys are gathering bananas and one is faster or cleverer than the other, why would it be natural that they end up with the same amount of bananas? Yes, it's still an hour of your life, but some people use their hours better than others and get more done with them.
We have to make 100 widgets to satisfy demand, you can make 75 per hour, I can make 25 per hour.
I would say we both worked for an hour, so we both get half of the revenue. You want three quarters of the revenue because you made three quarters of the the widgets?
I of course understand that we would want something like that in practice as an incentive, otherwise I could be very lazy and make you do all the work. But let us forget about practical aspects, let us assume we both work to the best of our abilities, we can not find a more productive replacement for me, and so on. We are also not competing, you could of course offer your widgets cheaper than me and put me out of business.
Why do you think it would be more natural or better that we get compensate based on the amount of widgets each of us produced instead of what it cost each of us to produce them, an hour of work?
Because people don’t pay for the cost of goods, they pay for the value they provide. If you need heart surgery that takes four hours, would you pay someone the same amount to take a four hour nap instead? Probably not, but why not? According to your logic the person performing heart surgery and the person taking a nap are both using up four hours of their life, so they should get paid the same amount, right?
Consumers will pay up to the value the product provides to them [1] and producers will sell down to the costs of producing the product. So why do we have economy? We have it in order to provide consumers with goods and services they need or desire as efficiently as possible, not to make producers rich. Profits are a mechanism to steer behavior in an economy, they are not the goal. So in general the price should always get pushed towards the costs of production, that is the role of competition. In case of scarcity the value attribute by different consumers will pull the price up in order to decide the allocation of the available products. [2] This should also encourage the creation of additional supply because the costs of production are below the price so there are profits to be made and the additional supply should then drive the price down further towards costs of production.
Long story short, the price should equal the costs of production, that is the goal. Any deviation from that just exists as a signaling mechanism to steer the system and decide the distribution.
[1] Actually up to the smaller of the value the product provides to them and the money they have available, see also [2].
[2] Note that the available products do not go to the consumers valuing the products the most, they go the consumers capable to pay the highest price. With enough money I could buy up all the heart surgeries because I like collecting them and deprive everyone else of heart surgeries even though they actually need them and value them much higher than me but just do not have the necessary money to outcompete me.
