Quote:
Originally Posted by Gavin78
While people might moan over public sector payrises and everyone keeps tabs on them. Who monitors the private pay sectors?
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The market does. This ensures their efficiency. As Heero has already noted, market forces are a far more efficient means of regulating price, quality and productivity than any central government scheme. That's not to say the open market doesn't have risks, clearly it does, and there are things we can and should do to mitigate them. However we need to be very careful that we don't end up with perverse outcomes. For example, the current Euro-wheeze, which is to reduce the incentive for bankers to take risks by limiting the proportion of their pay that they can receive as a bonus, is likely to backfire because it will simply result in larger basic salaries, which employers are then contractually obliged to pay out even even at times when a performance-related scheme would not.
(And beware Ed Miliband. Anyone who tells you a government can make life better for the people by legislating to control prices in the open market is either lying, or being wilfully ignorant of recent history.)