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Hard work & decent living
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Along with many Americans, I watched President Obama’s State of the Union speech last night. He is probably the most eloquent speaker that many of us have ever heard. He makes salient points on many issues that concern us, such as gun control and global warming. I do, however, have a few questions on some of his open-ended thoughts.

The first question I have is the definition of a “decent living.” President Obama states that all those that work full time should be able to have a decent standard of living. If my family is any indication of the trouble defining this elusive concept, it will be all but impossible to do on a federal level. Here is an example to which many of us can relate.

When my son was 10 years old he wanted a Sharks windbreaker for his winter jacket. The windbreaker cost $65. I knew that it would not serve well as a winter jacket and he would be cold all winter. That did not matter to him because the Sharks were his team of choice and the logo was important to him. I explained to him that the Sharks logo did not make the jacket a good value, and that it would not keep him warm. After a big fight and tears I told my son that I was not buying a jacket for him that didn’t do the job he needed it to do. I was living decently because my child could be warm in a new jacket. He was not living decently because he didn’t have a jacket with a Sharks logo…and I think he was cold a lot because he wouldn’t wear the warm coat I got him unless absolutely necessary. How will we define “decent”? Will there be a government standard?

The second definition I have concern about is “works hard.” A lot of people in this country work hard. Fast food workers, store clerks, Mr. Pickles sign holders….but what is the value of their contribution? Society places a value on the results of a worker’s labor. Entry-level, low-skill jobs pay close to minimum wage. A sales clerk at Nordstrom can earn $40K while a marital counselor can earn $80K. Petroleum engineers start at about $122K and doctors average around $200K. The marketplace puts a value on the contributions these folks make to our society. It is harsh to skills that are abundant and good to skills that are scarce. The marketplace is not some independent mechanism that works without our input. We make the choices that drive the results. It reflects our values. Phil Mickelson makes about $47 million a year and Oprah (does anyone remember her last name?) makes $290 million a year. We make the choices that make the marketplace, so how much influence does the government have? Phil and Oprah don’t get any subsidies. It seems out of whack but …

Anyway, hard work does not seem to be what we value. Smart work is what we value and it would seem that any subsidy of hard work takes away the incentive of people to work smarter. Will a minimum wage increase help? Typically the market corrects itself. Remember the dot com boom? Almost every coffee shop and fast food store in the East Bay was raising wages and advertising for help at well over the minimum wage. When skills are scarce the wages go up. When wages are forced up artificially several things happen. Companies “do more with less.” Full-time jobs turn into part-time jobs and complements are reduced. Reality is that the manager’s bonus program didn’t change and he has to find solutions so he can meet the goals and keep his wages from dropping.

The marketplace is an unemotional and sometimes cruel mentor but left alone it will allow people, the vast majority of whom I believe to be intelligent, to make good decisions about their future. Phil and Oprah did.