"Beethoven: Unfair to Labor!"
by James R. Oestreich

Source: The New York Times, March 28, 2004.
http://select.nytimes.com/search/restricted/article?res=F70612F73B540C7B8EDDAA0894DC404482

             Wages are based on workers' productivity. In chapter 26 of your text, you learned that employers will hire additional workers only as long as marginal revenue product (the revenue gained by selling the additional product produced by the last worker hired) is greater than the wage. An employer would not want to hire a worker who produced less value than the wage that he or she was paid, so they would not hire at MRP < w. This insight also tells us that more productive workers will generate more output for their employer and so they will be paid more than less productive workers.

             In real labor markets, however, measuring the productivity of different kinds of workers can be difficult. Productivity is relatively easy to measure in manufacturing or construction where the output of production can be counted. It is much harder to assess productivity in some service industries. How do you measure the output of a movie theater usher or a hospital nurse? Is a teacher's productivity measured by the number of students in the class or their test scores—an important question if smaller classes yield higher test scores.

             This article discusses a demand by violinists in the Beethoven Orchestra, who want higher pay because they play more notes than the other musicians playing alongside them. Such a policy would be a dramatic change from tradition. The article raises several problems with measuring productivity by the number of notes played.

• Can you think of other workplaces where the relative contributions of different jobs would be difficult to measure accurately?
• Human resource experts argue that pay is frequently based on the skill, effort, responsibility, and working conditions required to do a particular job. How do the challenges of playing violins, oboes, brass instruments, and percussion described in the article illustrate these compensable factors?