random academic musing

Well, because I go to a university where academics is the topic of the minute 1440 minutes a day, I think about this stuff in a real life context a lot. I'm an accounting major, but I think about economics a lot.

First, I find the connection (or lack thereof) between the skill and intensity in your job interesting.
I look back on my summer job, working at the snack bar at a golf course. Our favorite days to work were banquet days, not only because we got paid more, but, paradoxically, because we also did less work. We got an 18% tip of everything they ate, which usually worked out to $1 for each worker per guest that attended. On those days, I could work eight hours and make upward of $120. But on some regular Saturdays, I would work my butt off and I would be lucky to get $100 in wages and tips. Why do I get more pay for less work? The only answer I can come up with is that when people come to the golf course for a tournament, they're willing to pay a certain price for a certain dining experience, and they don't really care how much effort it takes on my part. But in terms of difficulty of work, it makes no sense at all. In fact, from a supply/demand perspective, it doesn't make sense either, because people need me just as badly (maybe moreso) on a regular day of golf.
And also think about the world's best ER surgeon vs. the world's best baseball player. I don't really know, but I'm guessing that ER surgeon makes around a million or two a year, if that, while ARod makes 27 million to hit a leather ball with a wooden stick. Which does the world need more of? That's an easy question. If you said ARod, there's something fundamentally wrong with the way you look at the world. So why does he get paid 20 times more? It's an extremely complicated question. One reason could be that people across the country will turn on their television to see him play, while thousands will pay $40 or more to see him in person. While it may not seem justified, it's how the market economy works.

It's always interesting to look at the push and pull of supply and demand, from both a consumer and labor perspective. While it sucks that Nike workers in Asia only make a couple dollars a day, there's a reason they work there. Because their only other alternatives are to work somewhere else for less money or not work at all. In fact, the average pay at a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a state-owned enterprise. In the U.S., that's like making $20 an hour. If you had no education and no specialized skills, and someone offered you $20 an hour (about $40,000 a year if you work full time) to produce shoes, would you? Of course, because that's slightly more than what the average person with an associates degree makes. When it comes to stuff like that, it's all relative. It is confusing and makes sense at the same time.
Whenever you buy something and you need something to think about on the walk/drive home, think about why the thing you just bought costs what it did. For example, why can I go to the mall and buy a Polo shirt for $65, take it straight to Goodwill, and someone else can buy it for $5? It's an interesting thought experiment...