Do we all want the same things?

Upon interviewing my first economist, chosen for being vocal on the issue of wage inequality in America, I felt I had been thrown a curve ball. The seven thousand plus words I typed one night as I was brainstorming how we can affect the wages that we earn reveal some minor insecurities in my assertions and Professor Mark A. Thomas, PhD of the University of Oregon uncovered them immediately.

First, the idea that a cost benefit analysis would bring a large portion of the middle income population to the same conclusion might assume that we value certain aspects of our lives similarly. It would be difficult, he said, “Some people like what… the incomes buy them, etc., others not so much, and this would matter. You would have to place a value on home activities as well… so that would make the calculation more difficult.”

Obviously, there are no pat answers. One of the deepest assumptions in this exercise is that happiness is what people truly value. A more surface assumption is that a large portion of the middle income population would be happier if they worked less, or that what they can afford by working at least full time does not compensate for the loss of happiness that results from having little to no leisure time.

There is also a need, and I thank Susan Reeves for this idea, for a formula where individuals can input their own values. If each individual is able to name the dollar value for each activity, or the potential for certain freedoms, e.g., more money to spend in the immediate future, or more hours to spend in the immediate future, there would be a way in which individuals can perform this exercise on their own to determine the “sweet spot” of number of hours worked for current wages that would produce the most beneficial outcome based on their value structure, and then as a group, provide a set of data from which we can extrapolate the values relative to our society.

Though the deeper assumption engenders a philosophical discussion, one that may never produce scientifically provable answers, the surface assumption is something that can be explored through Happiness Research. My initial foray into this field produced many intriguing outcomes, some which I will explore later on but what is salient is how many more fields of studies are required to answer my initial query. Happiness studies, leisure studies and the Psychology of Persuasion are a few areas off the top of my head that need to be brought to the table.

The second issue that Professor Thoma mentioned is even more obvious. If individuals decided to work fewer hours, all else staying constant, the supply reduction in labor would naturally stimulate an increase in wages. But all else will not stay constant because if there is less money circulating through the population, it will lead to reduced spending which will also lead to reduction in the number of available jobs.

The correlation between jobs and spending is clear to most of us, even to those of us with a less sophisticated understanding of economics. Still, we know that the correlation must be nuanced. The different products and services for which we reduce our spending would produce different results. For instance, if we spent less money on dining out, we hit the restaurant industry hard and there are many layers of service involved locally. If we reduce our spending on hard plastic toys that are chiefly produced in other countries and sold in giant chain superstores, we might have a smaller impact on our labor force since there are fewer employees per client in these stores than other services. How we spend our money should be designed to hit corporate officers and investors hardest while leaving the demand for labor intact, or better yet, increasing the demand for labor.

I know. Good luck with that one! Well, I still believe that some of the fear of job loss is hysterics intended to reduce the expectations of the worker. I mean, why are these jobs out there in the first place if they can be whisked away from us if ever we don’t behave? Though everyone I have discussed this with has assured me that in fact more jobs can be outsourced and the low unemployment rate in no way denotes any kind of security for the employed population, I beg to differ. I think that we are at a saturation point with outsourcing. I think that employers are still trying to find more work to outsource but they are finding it harder and harder to ship any more jobs out. It’s true that if we start demanding better wages, this will give employers more incentive to find cheaper labor elsewhere, but I believe that the difference in cost to outsource is so great to large corporations that if they could have done it they would have. Also, if it’s so cheap to outsource, why are we getting paid what we get paid now? Why not pay us less? Why not pay all of us minimum wage? If employers could, they would but they don’t so there must be more of a need for our labor than we are led to believe. And at the very least, they need us to keep spending, right? Jobs aren’t the only things out there that are left insecure with reduced spending. Profits are hit hardest when we spend less.

That is the thought I would like to leave everyone with today, the idea that the jobs that are out there are going to still be there waiting for us, even if we decide to play a little hard to get with our time.