Today’s Guest Saturday post comes to us from Pat Slattery of The Free Market Project. Pat has been AWOL for the last couple of months, for good reason. We are glad to have him back at his keyboard! In this essay, Pat bemoans the lack of even a minimal understanding of economic principles by a large segment of America’s population. This essay was originally published on August 25, 2013.
More convinced than ever…
By Pat Slattery
I’m more convinced than ever that we need a remedial economics course in this country. What made me even more convinced?
Parking at the grocery store I saw a car with a bumper sticker that said, “Save Medicare, Re-Elect Obama.” My head nearly exploded. Save Medicare by electing the guy whose plan is to ignore its insolvency until it’s finally completely broke? This is a person who doesn’t understand enough about economics to understand that Medicare is going to evaporate, but, before it does, it is going to chase away doctors from treating Medicare patients, and will further screw up pricing in health care. Anyone who would post this on their car, or anyone who would look at it and say, “Right on, brother!” needs serious help understanding economics.
More… It seems fast food workers are striking for higher wages. They want $15 an hour. A “living wage”. Do they understand that their value is not $15 per hour, or they’d already be making $15 per hour? Plenty of people will take their job at current minimum wage. And those people can do the job. It’s not like me saying I’ll play quarterback for the Broncos for a tenth of what Payton Manning makes. I’m not worth even a tenth of what Manning makes playing quarterback… I can’t do that job. But thousands of people can do the job that a fast food restaurant worker does, and they’d be willing to do it for whatever price the restaurant is offering. Fast food restaurants make good money. But my guess is that they do it by being very careful about costs. If you suddenly double labor costs, what you will get is either fewer jobs because the smart manager will manage staff even more tightly to bring on people for short shifts at busy times, and keep staff minimal at slower times. Or, you’ll get higher prices, which will cause consumers to buy less, which will cause the restaurant owner to cut staff… or go out of business. Seriously, people… If you want more money, make yourself more valuable to an employer, and go into a business where you can’t be replaced by a thousand people with your skill set tomorrow.
It is NOT the business’s job to provide the worker a living wage. There’s a balance. The business owner pays what he needs to pay to get and keep workers who can do the job, who can provide value to the business. The more valuable the worker becomes, the more the business owner is willing to pay. The worker is in charge of possessing or gaining the skills and knowledge to become valuable. Damned near anyone can dig a ditch. Very few people possessing rare skills can do open heart surgery. Thus, the ditch digger is paid a hell of a lot less than the heart surgeon.
I also saw a show (Stossel) where they were discussing how women are underpaid. Supposedly women make 77 cents (or something like that) on the dollar compared to men. The kicker is “for doing the same job.” First of all, there is all sorts of data explaining how that’s simply not true, due to lifestyle choices (men tend to work more hours, travel more, do more dangerous jobs, and don’t take workforce timeouts to have and raise children–God bless the women who do!) My take on it is to ask a simple question: What kind of moron business owner would EVER hire a man if he could get women to work doing the same job for 77% of what a man would make? Why would you ever hire a man? Are we so anti-woman that businesses are willing to just give away 23 cents on the dollar in labor costs to stick it to women by hiring men? We’re actually so misogynistic that we’ll reduce our own profits to keep women down… Really?
Those are just some simple examples of people being completely unable to understand simple economic principles. If they understood economics, would a person think someone whose plan is to not deal with insolvency to be the person to save Medicare? Would people making minimum wage think that they could protest their way to a doubling of their wages and it could just magically happen without any impact on their jobs or the ability of the business to stay in business? Would people believe that there is some sinister plot to underpay women that completely ignores the fact that, if women are willing to work for less money and do the exact same job as men, nobody would hesitate to hire nobody but women and men would be unemployed? Economics is really very fair. Capitalism is actually very fair. What isn’t fair is someone insisting that the laws of economics can be broken with no consequences, or that people have a right to money they have not provided the value to earn.
Relaated post by Pat