I believe that in a society where free market largely determines labor pool and compensations, things would be a lot different and the society would be more fair and huge disparity between rich and poor could not exist.
I think if you have no post secondary education and not interested or can’t learn any additional skills, then you can do physical labor such as garbage man or simple laborer. You should be able to earn a decent living, because the work has to be done and you’re contributing to society. Let’s say the free market compensation is about $50,000 for the sake of this argument, a surprisingly decent salary because competition pool will be limited since I’m sure most people would prefer not to do those jobs.
For people who want to learn some skills, a trade such as auto mechanic or electrician, they would probably take 1-2 years of trade school or apprenticeship to learn the trade. But there would be a lot of people interested in the trade jobs than simple labor as they are more interesting. Now, you think they should make more than physical labor pool because they took extra training. But money is not the only benefit of a job, trade jobs are more interesting and it doesn’t involve as much hard physical labor. So I suspect if it plays out in the free market, many people might be happy with $55,000 doing trade jobs rather than physical laborer due to minimal amount of time investment.
Now, let’s look at the professionals with a 4 year universtiy degree such as accountants or engineer. Sure, they need to spend even more time in school. But, by the same argument, there would also be many people interested in these careers as they are more intellectually stimulating and no physical labor is invovled and that would appeal to many people. Given the salary is high enough to compensate for the extra training, you would generate enough competition for those jobs as well. And I really believe the salary does need be that high in a free market until you get enough interests in those jobs. If you are technical thinker with a fraile body like me, given a choice between a an engineer at $60,000 and a laborer at $50,000, I would definitely rather being an enginneer so I don’t have to work long hard days outside doing something I don’t really enjoy. In fact, if i really squeeze my honesty, I would still be an engineer for $55,000, given a career normally spans 30 years.
The point is, a true free market will force people to be honest about whether they’re getting paid enough or not because someone else who is honest might do it for less at the honest level. And if you don’t like it, you have the choice to be laborer if you really think they get a better deal. The other beauty of the system is that free market will naturally push people to do what they’re passionate about and good at, because that’s the career you can be most efficient in, a career you enjoy doing more than someone else. If I really like to design machines and physical labor is really hard for me , then the sarcrifice of extra education to become a mechanical enginner would not be as great for me as for someone else for whom $60,000 might be enough.
Likewise, if someone is simply not smart enough to be a engineer or doctor and doens’t really enjoy school, then they still have the jobs security of trade jobs or physical labor, and can still contribute to society and make a good living. So free market makes a very efficient labor distribution among these jobs. Because you’re smarter, you don’t deserve to make more than someone else who also works hard in a different way. Someone has to build your house and take out the garbage, if you want to do it, you need to put in the same amount of hard work, in fact you’re probably less efficient at it then those people. The reward for being smart is that you have more choices with your careers, you can choose to become a engineer and a doctor when someone else can’t.
The goal is not to push everyone’s salary to the lowest acceptable level, becuase for the many overpaid jobs in our skewed system, there’re just as many underpaid jobs. There’re many blue collar workers in our society who put in a long hard day of work often find it hard to get by or don’t get to enjoy a lifestyle nearly as nice as someone with an overpaid profession. But those jobs are also necessary for our soicety, no less then doctors or lawyers and someone has do it. So in a fair society, there should be much less variation between the lowest paid jobs and highest paid jobs.
At this point, you probably think I’m a socialist wanting everyone to make around the same level. All the preceding is very simplied society and applies only to people who work the average hours and practice what is already known. So for people who just learned from an established body of knowledge (i.e. knowledge passed on by other people) and who work the average full time, this is the compensation structure I expect in a free market. But of course, you can become richer by either working longer hours or creating a more efficient process. For example, if you invent a machine that produces twice as many TVs as before, then you deserve to be richer, because you’re able to produce more, and it’s good for the rest of society, because the cost of TV will go down. In fact, you’re making everyone else richer too except you’re just taking a commission out of it, because we all spend less money on TVs and can buy more other stuff. And you don’t have to be Thomas Edison to be rich, any type of more efficient process deserves some reward. For example, if you come up with a new way to do certain things to save your company more money, then you also deserve to get paid more. So I’m not saying everyone doing the same job needs to get paid the same, compensation should be performance based. But the performance is only improved through longer working hours or more creative work which I know encompasses a lot.