Tag Archives: basic economics

Got Mad Skillz?

And you ain’t got no J.O.B.?

Or

Taxpayer Financed Workforce Training is Stupid….

Or

Outsourcing totally makes sense…

Or

Let’s get back to the Fundamentals…

Anything other than a business directly training its staff is ridiculous, and a colossal waste of taxpayer money.

Only the Business, Corporation, LLC etc. knows what specific skills are needed at any specific moment. And only they have the ability to “re-tool” quickly enough to meet market demand and best practices. Thus, they are the only ones equipped to train personnel in a competitive environment because of their flexibility due to their market participation and the knowledge derived from it.  This was called “On The Job Training”.

Then why doesn’t this happen?

So why is “On The Job Training” a phrase of the past. In other words, what happened to the days when “unskilled” workers would be hired and trained to fill the desired positions within a company?

The Minimum Wage happened.

The Minimum Wage is why you have to go to school and GUESS what skills will be necessary to secure a job of your liking.

Decades have passed since “getting into”, “starting in the mailroom” or “getting in on the ground floor” of the profession of your choice was an option. Now those industries must hire “trained” or “skilled” employees because they cannot afford to spend any time paying you to learn on the job. It is simply too expensive… because there is an artificial Minimum of which they must pay.

This is why “unskilled” labor in other countries such as China CAN be employed to make things like Apple iPad’s because the wages are far lower and make it possible to build the time spent training the workforce into a product cost consumers are willing to pay.

This is why companies, who want to stay in business, outsource jobs…

If they could not outsource jobs… you would not have an iPad to play with in addition to many other things you take for granted.

Are you with me so far?

Outsourcing, because labor is too expensive in the U.S., enables YOU to have cool stuff you would otherwise NOT HAVE.

But instead of illustrating this simple truth for all to understand, we embrace ideas like “The Living Wage”. (As an aside… considering the “Living Wage” kills jobs as illustrated above resulting in “No Wage”, I’m not sure why anyone supports it. But too few out there seem to think past the warm, pleasant, feeling of the inane goo being poured into their ears. I digress.)

Another problem that should be understood is Big Labor’s relationship to the Minimum Wage/Living Wage. If you’ve ever been confronted by someone with a clipboard asking you to sign a petition to “raise the minimum wage” it is always a Union Member or someone being paid by a Union. Weird… right?  We all know Unions don’t get paid minimum wages!

Well, the Unions base their “scale” or pay rate upon whatever the minimum wage is.  So… by raising the Minimum Wage (A Wage hardly anyone other than first time, entry-level, workers earn) you are handing the Unions an exponentially larger raise. For example, a 25-cent increase in the minimum wage can hand the Unions a $1.25 raise in their base scale. Play around with that math for a second… we have lately seen the minimum wage raised from $5.25 to $7.50+ in some areas with Union base wages already at $35. So using this example, a $2.25 raise to a “Living Wage” gives the Unions a… wait for it… $11.25 raise! That’s a 30% increase in pay per hour to $46.25. That’s just for one hours worth of the same work they were doing prior to the law being changed.  That takes a Union member making $72,800 a year to $96,200 plus benefits!  Are we still talking about the “minimum wage” here?  No… no we are not.

What also happens is the artificially higher wages prevents companies from being able to afford to hire unskilled labor and train them to fulfill the need of the company.  And, in the dim thinking of the Unions, assures their employment at their already exorbitant hourly wage rates… right up until the company lays them off, or goes out of business completely.  Hostess Twinkie anyone?  Seems self-explanatory… but apparently it’s just complicated enough for the Union membership not to understand, so the Union dues keep pouring in.  Then pouring out to the Union Bosses and Leftist Politicians for their election campaigns.

So is it any wonder that jobs move overseas?

If you’re still not convinced… let’s take your $750 iPad and multiply the cost of the labor alone ($250) by 30% with a required 33% profit margin on each unit… now you would have to pay $1100… which you would most likely not do, thus too few people would be interested in buying it over a lap-top… so nobody would have one because there would be no profit available incenting Apple to make it.  If you doubt this and think Steve Jobs would have made it anyway just because he was a “caring”, “altruistic” humanitarian… read his book.

Can you imagine the cool stuff we would have if the government, and those people with the very best of intentions, would just keep their fingers, and noses, out of the Free-Market.

There’s no telling how great our lives might be…

We’ll never know, because this issue is too easy for the Demagogues to make anyone speaking the truth about a Government Mandated Minimum Wage out to be evil.  Which, frankly, illustrates the ignorance of the masses who allow themselves to be manipulated by the Unions and Politicians.  Too bad… it’s a huge loss for all of us, including them.

This is a very important concept to understand as it’s a building block in the foundation of basic economics.  Once you can wrap your mind around what is being explained here you are half way to fully understanding how the world works.

So if you got Mad Skillz and ain’t got no J.O.B. it’s your fault if you support a minimum wage

…Biaaoootch!

(Originally posted 111112.  But some things need repeating.)


I Had a Dream…

And since I already subscribe to judging others by the content of their character let’s move to something else.

As I drifted off to sleep last night I was thinking about President Obama’s press conference…

With not a dry eye in the press corpse, it went something like this;

Surrounded by children the President began reading their letters…

“It’s supposedly a free country but I recommend there needs to be a limit on spending… Please don’t let politicians waste our money or other people’s money like they do.” Jack L.

The next letter continued with the same tone…

“I am writing to ask you to STOP wasting our money… I am very sad about the children who lost their futures.  So, I thought I would write to you to STOP spending their money before they’ve even earned it.  And STOP borrowing money just to spend it on stupid stuff.”  Lisa W.

After a brief pause the President commented somberly, “These are some pretty smart letters from some pretty smart young people, so what we should be thinking about, is our responsibility to care for them, and shield them from harm, and give them the tools they need to grow up, and do everything that they’re capable of doing.  Not just pursue their own dreams, but to help build this country.  This is our first task as a society, keeping our children safe.  This is how we will be judged.  And their voices should compel us to change.”

Finally the President concluded with a letter from Julio…

Julio had written that he had 15 brothers and sisters and “I know I would not be able to bear the thought of supporting any of them.  I know spending laws have to be passed by Congress, the House and the Senate, but I beg you to try very hard to make sure they have a free market economy where they can support themselves.  Not just for me, but for the whole United States.”  Julio signed the letter “my love and regrets.”

President Obama responded.  “Julio, I will try very hard.”

The children then began running around yelling “Liar, Liar…” and something about the Presidents pants being on fire…

Then I woke up.