[tony.destro]

Salaried positions have always struck me as a bad deal and every time I’ve taken one it has turned out bad for me. I still end up working 60 hours, thus diluting my hourly rate. Unless, it’s a very established company with workers telling me that their hours are 40 hours a week up front.

In the hourly position, I make a lot more. If I was given more work than could be done in 40 hours I still got paid, which mean either I’d get a windfall and my boss would think twice about what his prices are that he’s charging the client.

I think workers think “salaried” means 40 hours a week on average and then the worker later discovered he’s agreed to a rate which he believes is below his market rate. Often the actual expected hours are completely unknown. A salaried offer at one job isn’t comparable to a salaried offer at another job because employers don’t/can’t really tell you up front what the expected hours are.

Is this a state created problem, is it a problem at all as you see it?

[jmherbener]

In a market economy there would be diversity of contractual terms across different occupations. Entrepreneurs would adopt the method of contracting that generated the greatest benefits. Every compensation system from piece rate to hourly to salary and from wages to benefits to profit sharing would exist in the economy, each one in the appropriate occupation. Here is a NBER article on the decline of piece rate pay, which the authors attribute to the rise of team production:

http://www.nber.org/digest/may11/w16540.html

State intervention can introduce inefficiencies in the pattern of contracting methods. One example is entrepreneurs shifting from wages to paid health care insurance in the wake of the federal government divergent tax treatment of the two imposed during wage and price controls of the Second World War.

One example of government intervention that could affect the balance between hourly and salary compensation is the Federal Labor Standards Act which mandates minimum wages and overtime for hourly workers. Some entrepreneurs and their workers might find it advantageous to have salary contracts, and longer working days, to avoid hourly compensation levels above the workers productivity.

http://smallbusiness.chron.com/salary-vs-hourly-employment-1770.html

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