Compensation & Ideals

In the capitalist system, labor is generally payed for out of the difference between profit from the consumer and compensation to the employer.  In other words, if a businessman can spend $1 on materials and sell a widget for $5, he has $4 with which to pay the worker and himself.  Just as there is a larger competitive market within he must sell his widget, so to is there a larger competitive market within which he must hire his workers.  If the going rate for assembling widgets is $10 an hour, he must work within some rough margin of that number.

The market for wages can often seem highly unfair.  Backbreaking labor is often rewarded very poorly, while relatively comfortable labor is rewarded highly.  By what mechanisms does this occur?

This is a question that has always perplexed me: To what degree is compensation related to skill (investment in training), value, sheer difficulty, and then of course, social rank?

The really creepy thing in this equation is the degree to which one's position is socially determined, having to do with privilege of human and societal capital.  The free marketeer would argue the market is an objective arbiter of what is fair.  Yet a more sophisticated mind would acknowledge the multiple ways in which the market merely enforces inherited privileges reinforced through institutional norms.

Regarding acquisition of skill via college vs. trade, the bias towards social rank has no doubt something to do with how we perceive the value-added component of college.  In other words, the attainment of knowledge outside a specific skill-set is thought of as worth something to society apart from labor value.  In this way, does college's conferral of social rank represent an enforcement of enlightenment as a social norm, rewarding those who pursue this value so as to uphold its continued social aspiration? 

Or is this a story we, the college-educated elite tell ourselves?  I for one admit my bias - I consider my time in college as foundational to how I have learned to think about the world.  I have been exposed to the highest traditions of civilized thought.  I can't help but imagine that had I not gone to college, I would be a lesser man for it.  How can I not be biased then against those who have not gone to college, at least in terms of a general lack of contextual knowledge and or critical thinking skills.  Let me put it to you this way: one is a better man for having read Plato and Marx, and engaged in its critical analysis.  There may be no direct correlation to a specific workplace skill, but there is no doubt that one's mind is at least marginally better at understanding the world and better contributing to it.

So again, is the added compensation for a college degree to some extent enforcing this broad social value of the expansive mind?