Industrial age relic: Do companies pay for your time or your brain?

When I started work as a newspaper reporter many years ago, I had to clock in and out every day if I expected to be paid. Just like many millions of people, I was paid for my time, not my output. I never understood why.

When I was a teen-ager and first started cutting lawns to make money, I quickly discovered that people wanted to pay me an hourly rate. I used to gently push for a different arrangement. I wanted a flat fee for the service, because I felt that the hourly rate punished me for working harder and faster. Sometimes my clients agreed, but many held out for an hourly rate, so I was stuck having to make sure I didn’t work too fast and thus cheat myself. I hated it.

The obsession with paying people for their time is a relic of the industrial age, when human labor was considered just another interchangeable part of an industrial machine. (The idea that any hour of labor should have the same worth as another hour of labor was also an important cornerstone of Karl Marx’s thought.) The idea might have made sense in an age when people were treated like gears in machines. It has no place in a world where brains are more valuable than brawn.

I came across software today that is something like a modern version of the time clock for people who work for companies from home or other locations. The software is called Odesk. It’s installed on your computer and it takes screenshots of whatever you’re doing at six times each hour. It records the movement of your mouse. It can even record keystrokes to figure out what you’re doing. If your six screenshots show work apparently taking place, you get paid. If one of your screenshots shows something other than work, you give up one-sixth of your hour’s pay.

Unfortunately, governments have enshrined the idea of paying for hours into law. The mindset of labor law is stuck in something like a snapshot of the early 20th century — when efficiency experts such as Frederick Taylor helped industrialists such as Henry Ford make products cheaper and still pay men higher wages. There were good things and bad things about such systems. They worked, but they were stressful and difficult. Despite the drawbacks, they allowed poor men to make more money than they could have made otherwise and allowed low-income people all over the world to buy cars when they couldn’t have afforded them when they were made the old ways.

Whether you think that such industrial-age thinking was good or bad — or a mixed bag, as I do — it’s clear that it’s out of place today in many ways. If you’re doing something that involves output that’s identical to that of other people, it’s easy to measure output. And if you’re doing something that’s original or creative work — something that involves thinking instead of rote doing — all that really matters is whether what you produce has value. It doesn’t matter whether it took 10 hours or 40 hours.

If you’re an industrial designer who can finish a job in 20 hours, do you want to be paid the same as someone who takes 80 hours to do the same work? Or what if you’re writing software? Or designing web pages? Or writing? Paying people by the amount of time something takes is completely disconnected from the value of what’s produced.

Wage and hour thinking is completely out of date — if it ever made sense. I don’t want to be paid for my time. I want to be paid according to what I produce that has value to someone else. What’s more, I don’t want to work for a company that has so little respect for me that it’s taking snapshots of my screen at six random times per hour.

As long as a company is paying for your time, that sort of thinking is required. I think we need to ditch that idea and move to thinking about what a worker’s output is actually worth. To me, it’s ultimately a much more humane way to look at the value of labor.