Marginal Value: The Poor


So, I was going through some old blogs and looking for some quick insightful nuggets and came across this little gem from TJIC:

http://pajamasmedia.com/ronradosh/2011/0…

Krugman gets to his main point: that in the national debate, his side is that of morality, justice, and reason â?? while his opponents on the conservative side are immoral, uncaring, and actually want the poor to die or disappear.

Speaking for myself, I don’t want the poor to die.

I want them to work harder, to bring themselves up into the middle class (recall: the main thing that seperates the poor from everyone else is that poor people work about 15-20 hours per week, middle class people work 40-45 hours, and upper class people work 60+ hours), or – if they prefer – I want them to keep working very little, and enjoying the trade off of potential cash for increased free time – as long as they do it with out dollars stolen from others.

So I did a little looking.  By God he’s right:

Hours Worked Number of Workers Median Weekly Earnings
1 – 34 21802 233
1 – 4 548 62
5 – 9 1203 69
10 – 14 1865 112
15 – 19 2729 156
20 – 24 6425 212
25 – 29 2953 262
30 – 34 6079 337
35 or more hours 94452 750
35 – 39 8200 485
40 67195 700
41 or more hours 19056 1153
41 – 44 1084 867
45 – 48 5294 994
49 – 59 8450 1246
60 or more hours 4228 1338

Amazingly, the more you work, the more you make.  However, there is a flip side; the more you work, the more you work.

However, as I considered the numbers, it occurred to me, “Of COURSE you earn more when you work more–you’re working more hours!  Duh!”

But check this out:

Hours Worked Rough Dollar per Hour
1 – 34
1 – 4 24.8
5 – 9 9.86
10 – 14 9.33
15 – 19 9.18
20 – 24 9.64
25 – 29 9.7
30 – 34 10.53
35 or more hours
35 – 39 13.11
40 17.5
41 or more hours
41 – 44 20.4
45 – 48 21.38
49 – 59 25.43
60 or more hours

It turns out that the more you work, the higher your hourly wage.  [Though I do admit that the two low values look abnormal.]

 

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12 comments
  1. nickgb said:

    Or conversely, when you’re being paid more per hour, you are going to work more and take less time off. Big firm lawyers make a lot more per hour than a fast food cashier, and are thus more likely to accept a 60 hour work week. Also, people have personal obligations (caring for children, taking care of their house, etc.) that you can hire out when you make more money, which frees you up to work more hours. And then, of course, there’s the fact that lower wage jobs may have more of a physical component, meaning that you can’t just do a 60 hour week as easily when you’re in the lower brackets.

    The real question, though, is what’s the point? You’ve got a correlation but there’s a lot of other factors involved and it’s not a world where people can freely move between the various segments.

    • pino said:

      You’ve got a correlation but there’s a lot of other factors involved

      Of course you’re right and I agree, the display is very crude and very rough and not nearly accurate as I make it to be. It’s using a thumb to measure a flagpole. The larger point is that in life there’s tradeoffs. Those people that earn a ton of money work a ton of hours. A lot of people talk about the very rich in such a manner that it’s as if those rich people just won some kind of rich lottery. To be sure, there may be a degree of inherited intelligence or ability. But by and large the wealthy are wealthy on the merit of their labor and the amount of time they work.

      For example, a VP in my company, and I work for a massive corporation, traveled so much that he would often wake up, call his admin and ask her to verify where he was. He had to teach his daughter to play golf with his team of about 80 on a conf call.

      Or conversely, when you’re being paid more per hour, you are going to work more and take less time off.

      This, to a much smaller degree, is another of my points. Compensation is variable. People seem to be able, at least inside the extreme margins, to control how much they work. And they seem to work just enough to satisfy the lifestyle they “choose” or “accept”.

      Big firm lawyers make a lot more per hour than a fast food cashier, and are thus more likely to accept a 60 hour work week.

      I think you and I were discussing this the other day. In some ways, this is counter intuitive. To the high paid lawyer, the next increment in pay is “less valuable” to him than that next increment in pay is to the cashier. Each dollar is much more precious to those living on the edge.

      Also, people have personal obligations (caring for children, taking care of their house, etc.) that you can hire out when you make more money, which frees you up to work more hours.

      This is an issue that, for some reason, has resonated in me for quite some time. It really saddens me when I reflect on the helplessness that must exist for the single parent trying to do the right thing and work for what, 6-7-8-9 bucks an hour only to have to pay much of that in day care.

  2. nickgb said:

    I think you and I were discussing this the other day. In some ways, this is counter intuitive. To the high paid lawyer, the next increment in pay is “less valuable” to him than that next increment in pay is to the cashier. Each dollar is much more precious to those living on the edge.

    My intuition works the other way. Would you give up your weekend for $100? How about $1000? You’re right about the marginal value of the next dollar, but I can’t see it being enough to change that decision to spend more time in the office, unless you’re facing grocery bills you can’t pay. And the people in those situations don’t really get that many choices about their pay and hours.

    • pino said:

      Would you give up your weekend for $100? How about $1000?

      Hmm…think of it this way:

      Once you are earning “enough” or “sufficient” you will demand that the next “increment in pay” will be higher than you make right now. When you are struggling to make ends meet, you may find yourself in the reverse. You need the money so much that you may actually accept less for the next increment.

      Think of the man who works two jobs. And his weekend or night job is one where he doesn’t command the pay or wage that he does on his primary job.

      And the people in those situations don’t really get that many choices about their pay and hours.

      This will speak to Alan’s point below. At the margin, there are a LOT of jobs available.

  3. Alan Scott said:

    pino ,

    I think your argument is moot in these times . Until there is actually more work, how can the poor work more ? The question between us and liberal economists like Krugman is what is the best way to produce opportunity for jobs . Krugman and his ilk believe in massive public works and redistribution. We believe the opposite .

    To me Krugman is the broken clock of economists . He is right about twice a decade .

    I believe that thanks to President Obama we can now say that we tried Krugmannomics and it did not work . President Obama is as we have said many times Carter 2.0 . In their latest edition, National Review gave a profile of Congresswoman Michelle Bachman. She and her husband worked for Jimmy Carter’s 1976 Campaign and danced at his inaugural ball. Carter’s failures turned Bachman into a Republican . I am betting that Obama the great , is turning many wide eyed college kids into Conservatives .

    • pino said:

      I think your argument is moot in these times . Until there is actually more work, how can the poor work more ?

      Some time ago I took to taking pictures of “Help Wanted” sign where ever I went and posted them as an example that there ARE jobs available. My point was that the benefits from unemployment caused the condition where the store owner couldn’t over come the value of the unemployment and so the jobs went unfilled. Unfortunately, the posts had the effect of insulting a number of folks because of their current condition. Some of those folks were my friends. So I stopped running the series.

      But the point remains. If you are struggling to pay rent or electricity this month; there are a lot of jobs available. See Nick comment above.

      I believe that thanks to President Obama we can now say that we tried Krugmannomics and it did not work .

      I think you’re right. The cry for more stimulus is falling on skeptical ears. As it should.

      I am betting that Obama the great , is turning many wide eyed college kids into Conservatives .

      I feel you are right again. However, I think the Republicans are doing a bad job at welcoming these kids in. The youth of today have a couple of different views on a couple of things

      1. Gay marriage
      2. Immigration

      If the Right would let go their idiotic positions on those two social issues, we would have a TON of new recruits.

  4. Alan Scott said:

    pino ,

    I believe those two issues are where we disagree. I am too much of a traditionalist to agree on Gay Marriage and if you allow amnesty on today’s illegal immigrants , you will just get 3 times as many in the next two decades . We cannot afford millions of uneducated Latin American laborers, while we send Asians back to their countries with advanced college degrees they earned here .

    Even Liberals agree that an educated workforce is vital in tomorrow’s competitive economic world . How will you ever come close to that when most of the illegals that overwhelm our schools and local services are poorly educated ?

    I am ready to hear your rebuttal .

    • pino said:

      I am too much of a traditionalist to agree on Gay Marriage

      I understand. For example, I think you should pray before each meal and bed. I’d prefer it if you didn’t take the name of the Lord in vain. But I would never legislate that.

      if you allow amnesty on today’s illegal immigrants , you will just get 3 times as many in the next two decades .

      I disagree. The best way to fight the illegal immigration problem is to make it easier to be legal.

      How will you ever come close to that when most of the illegals that overwhelm our schools and local services are poorly educated ?

      If I were to ask you to close your eyes and list the characteristics that you feel make a strong citizen, I suspect, in random order, your list would look like this:

      1. Hard working
      2. Belief in God
      3. Love of family

      That describes the overwhelming majority of Latinos I have ever known.

  5. Alan Scott said:

    pino ,

    I have no doubt that Latinos are great people . My point is that any group coming in in large numbers simply overwhelms the host country . We all point with pride to our immigrant heritage . Most of us are descended in part from the great waves of immigrants who flooded America’s shores in the 19th and early 20th century . We forget the reality of those times. Tell me why were immigration laws enacted to shut off this flood ? Was it just racism ?

    The fact is mass immigration causes real trouble . Even the mass immigration following the Irish potato famine caused crime and slums . Back then America had a huge country it stole from the Indians and we felt we had to fill it up . Absorbing huge numbers of low skill, low educated people is different for a mature country .

    I don’t know why you believe amnesty does not encourage illegal immigration . The world is full of desperately poor people . We can’t take them all .If there is a chance that sneaking in will get them legal citizenship one day , what do they have to lose ?

    On gay marriage , this is just more of the eroding of traditional values . More eroding of marriage . Granted straight people have nothing to be proud of their record for fidelity , but there are standards . Those standards have a lot to do with child raising . Granted again that a lot of marriages have nothing to do with child bearing. People who remarry in old age are not generally producing children, but let me give you some problems I see with gay marriage being accepted .

    There are laws against incest in marriage because of child bearing . You do not have that concern in a gay marriage . So what is now to stop two brothers, two sisters, parent child unions from happening ? Now that the standards have been lowered, where is the line ? Granted this is a slippery slope argument . Marriage was always a gender to gender contract . I see nothing good coming out of changing it .

    • pino said:

      Tell me why were immigration laws enacted to shut off this flood ? Was it just racism ?

      I think so.

      I don’t know why you believe amnesty does not encourage illegal immigration .

      For the same reason I don’t think making it easy to buy a cell phone encourages cell phone theft.

      On gay marriage , this is just more of the eroding of traditional values .

      Maybe. Maybe not.

      But I wanna point out, we we are not passing laws preventing pre-marital sex. Or taking the name of the Lord in vain.

  6. It’s not the white or Asian kids who are causing gang problems in the middle and high schools for which my children are zoned. It’s not primarily the whites & Asians who are becoming teen moms. It’s not primarily the whites or Asians who are leaving school without a diploma.

  7. Alan Scott said:

    pino ,

    ” I don’t know why you believe amnesty does not encourage illegal immigration . ”

    ” For the same reason I don’t think making it easy to buy a cell phone encourages cell phone theft.”

    I am not 100 % sure on this but , I believe President Reagan gave amnesty to 4 million illegal immigrants in 1986 . Now we have about 15 million more . Give amnesty to those and if mathematical history repeats itself, we will have 45 million in 25 years . Why wouldn’t it happen ? Can we absorb that many ?

    ” But I wanna point out, we we are not passing laws preventing pre-marital sex. Or taking the name of the Lord in vain. ”

    Marriage is one of those cultural glues that hold society together . Even if it is disrespected by heterosexual people, it is a standard. Premarital sex and taking the Lord’s name in vain were against the law. I am not in favor of bringing that back .Change can go too far, too fast . I can argue that States like California who are the most modern in their social change, are also the most screwed up .

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