How Much Are You Worth: Consulting Fees
A recent study in the University of Chicago's Journal of Labor Economics found that an increase in outsourcing, and a fall in full-time employment rates have resulted in higher hourly worker compensation over time. More specifically, workers' hourly compensation has risen by 3% annually since the 1980s. This is despite the fact that worker productivity has increased by about 2% annually on average for nearly all U.S. workers since the 1980s. In other words, workers have increased their productivity at an annual rate of 2%, but have not been rewarded for doing so.
This is unfortunate since it has helped to create a growing income gap here in the United States, in which the top 1% earns 19% of all income – the highest-ever level since 1928. In fact, after adjusting for inflation, wages of the bottom 90% of U.S. workers were lower in 2011 than they were in 1979 while the top 1% saw its income tripled. This is really unfortunate because such a large income gap has a lot of economic implications – one being that it reduces middle-class purchasing power thus slowing down economic growth.
In order to inspire more social mobility, one solution is to allow last-in, first out (LIFO) employee stock option programs. In an LIFO option program, employees are the last employees hired and receive stock options after the annual performance review. The theory behind this is that those employees who have been with a company for a longer period of time should be able to sell their stock at a higher price since they have been with the company longer than someone who has been there for 2 years.
Unfortunately, such options programs are often disfavored by management, who tend to feel that it would encourage employees to quit their job and start their own business. If a company's stock is always climbing up because of insiders selling their stock, then the management feels that they should do the same – thus encouraging underperforming employees to quit. This would actually be a bad idea since the employees who stay with the company for a long period of time are likely productive workers since they have been doing well in their jobs and are likely responsible at work.
Thus, there needs to be more research done on whether LIFO employee stock option programs actually encourage employee loyalty and productivity, as opposed to causing more churn among employees – which is what management wants.
In any case, employee stock options are not the only way to incorporate an incentive-based compensation system. Incentive-based compensation is important because it rewards productivity of employees and thus helps to ensure that employees are productive – especially since most people don't like to work harder than they would have to.
In order to do this, companies should consider implementing a profit-sharing program in which they reward key employees who help to increase profits – if your company doesn't have such a program, then it might be time for you to start one!
To learn more about how you can start a profitable business, check out my new book Start Your Own Business .
Title: When Can I Use the 'Infer' Pronoun?
"Given our hot-and-cold history with inferrable information in economics, it is a bit surprising that we have not done more to understand when inferrable information does and does not occur."
— David Laibson, "Behavioral Economics (Or at Least What People Think It Is)".
The Trouble With Inferrable Information [ARTICLE START]
For those not in the know, inferrable information is defined by Wikipedia as: "information that is known by an agent but cannot be observed directly or indirectly. The term comes from information theory. Since inferrable information is available to the agent but cannot be acquired directly through measurement, it is in a sense latent."
This seems to be a very abstract term with little actual use. This is because it is not used often in everyday English. It might be used in different fields of study, such as economics or finance, where complex theories are created and then subsequently applied. Still, this does not mean that we should abandon the idea of "inferrable information." After all, most of our knowledge may be inferred in various ways – whether this knowledge is "experiences" or "intuition."
In terms of everyday life and socializing with others, however, there might not be much need to discuss this topic. But in academic fields, it is important to discuss such topics. This is because in many academic fields of study, there are things that might not be easily observable but are still real and true. For example, in physics there might be a particle that we have not directly observed yet, but it may exist because of the observations and experimental data we have gathered to date.
This is also true for economics and business. Since this field of study concerns itself with human beings who themselves are quite complex, there are many issues that can only be understood by indirect means rather than direct ones. Thus, researchers need to keep a keen eye on "inferrable information. "
Of course, many of these "inferrable" concepts are not new. For example, the concept of "loss aversion" is used in behavioral economics and psychology to explain why people make small but irrational choices (such as continuing to work despite currently being out of work). In other words, it may be rational for an unemployed person not to quit their job because they will go into debt due to a termination fee or another expense which they would have had to pay if they were lucky enough to find another job.
However, the concept of loss aversion is not new in the field of economics. Loss aversion was actually described by Alfred Marshall in 1890 (in his book Principles of Economics ), and James Meade, who won the 2008 Nobel Prize in Economics, used this concept to explain why people value things more when they're losing than if they're gaining.
Thus, it seems that economists – and other researchers who study economics – have kept a keen eye on "inferrable information" for a long time now. In fact, much of what economists know and apply to their work comes from observing "inferrable information," and thus it's quite important that we discuss it whenever possible.
Conclusion
In any case, whether you're a business owner or an academic who studies complex theories in the field of economics, "inferrable information" is important and deserves to be mentioned whenever possible.
However, in most cases, we can simply use the term of "information" or "data" without actually getting into the details of what "inferrable information" entails. After all, with some background knowledge on economics and psychology, it would be obvious that loss aversion is a more detailed concept that can be used to describe why people make certain decisions – even though such decisions might not seem to make much sense at first glance.