Blog Posts

Minimum Wage: the tale of two apple farmers

5/19/2016

Let’s say that there are two apple farmers in town. One has a lot of education and experience. He also is married; thus he can commit more responsibility to his apple business because his wife is taking on much of the other responsibilities. This experienced and skilled farmer trims, fertilizes, harvests, plants, markets, stores among other business related duties with great skill.

The other apple farmer makes many mistakes because of his inexperience, lack of education and he is a single dad thus has primary responsibilities outside his business. The better farmer yields a more abundant harvest and far better looking and tasting apples. His apples last longer and are generally preferred by the consumer.

Let’s say they both set up shop every Saturday at the farmer’s market and both price their apples at $1 an apple. At first, the skilled farmer’s apples sold much better, taking in $500 versus $50 for the other farmer. The second Saturday, the less experienced farmer dropped his price to $0.80, so he did not have to take most of his apples back home. This time the better farmers sold $350 compared to $150 for the other farmer. The third week he dropped it to $0.70 per apple, and this week the better farmer sold only $300 and the other farmer $200.

The less experienced farmer did not like making less money than the skilled farmer, however, he realized the other apples were better. He could barely make it on $200 a week; however, he knew he could learn better business practices, better-growing skills and in time, increase his prices, because his apples would be more valuable when he became better at trimming, fertilizing, harvesting, planting, marketing, storing among other skills.

The fourth week, the cop showed up at the farmer’s market and told the less skilled farmer that he needed to increase his prices to a minimum of $1 an apple. The farmer said, "but I will only sell just a few apples that way, the other farmers' apples are better than mine, and all the shoppers will just buy his." He further stated that he needed to use price to compete for the customers. He said that over time he will be able to increase that price because his apples will be just as good as the skilled farmers’ apples, but at this time, he needed the lower price.

The cop stated that the government needed to ‘protect him’ from low wages and therefore he needed to price his apples at $1 an apple. The less skilled farmer stated that my income will only be about $50 a week instead of $200, so PLEASE STOP protecting me! The practice of trial and error as I make only $200 a week is much better for me then for me not to make any and pay to go to school to learn the apple business. Over time this is my best option. The cop stated that any apple he sold under $1, he would have a $100 fine.

The next week the farmer stood before very ignorant, yet high and mightily arrogant politicians to plead with them to allow him to trade with consumers that would make both the consumer and him, the farmer, better off. The politician stated that the more experienced farmer stood before them a few weeks back and told of your very hard life. They stated that the experienced farmer claimed you were not making a living wage and felt very sorry for you.

The politicians stated that they were convinced that you needed to make at least $1 per apple so you could support your family; therefore, we passed a law, and you need to be grateful to us because we increased your income. The less skilled farmer stated, that since I had to increase my price up to a $1 and apple, the skilled farmer sells out of his apples by noon and takes home over $500 where before he worked until 5 pm and took in only $300.

I, on the other hand, went from taking in $200 to barely $50 a week and now throwing away over half my apples. The politicians now just realized why they received that campaign donation by the skilled farmer and comprehended that one of the best apple farming skills is politics.

When the Government owes Everyone Money, Government needs to take money from (TAX) everyone to give it to us: We Lose GDP

5/8/2016

This is a simple concept yet is constantly misconstrued by the government. The government passes a law that gives everyone money. What they fail to understand is that they first must take that money from that person to provide them with that money. Often the politicians try to portray that they are taking money from corporations or the rich; however, that tax is always passed on to the consumer or others in a variety of ways.

Debt held by the government is claimed by some liberals to not be a big deal because 'we owe it to ourselves.' First, it is owed to individuals, not the government. There is a significant difference. The government must TAX everyone to give it back to us individually.

US debt per taxpayer is $161,000 (May 2016). This is how much the government has to tax us in order to give it back to those of us holding US debt. State and local bonds are also a heavy burden on our system. All of this debt is not balanced with real assets, it is mostly backed with just the promise to tax citizens.

Laffer Curve: the act of taxing an economic transaction, reduces the number of economic transactions due to the perception among some that the trade is not worth it. If the government is taking (TAXING) a large percentage of the trade, often times the trade is borderline ‘worth it,’ and the tax rate makes it not ‘worth it,’ thus the trade does not happen.

Since ALL trades make people on both sides of the trade better off; trades that do not happen because of the tax stops both sides of being better off. The Laffer Curve deals mostly with tax revenue dropping off as the rates go up. However, the more important lesson is economic activity drops off because the tax makes the trade not ‘worth it.’

Retirement planning SHOULD be, that you build up assets during your working years to allow you to retire and live off those assets in your elderly years. The critical part here is that you build up assets. The government created a system where you pay into the Social Security system; however, they do not build up assets. They have to tax people at the time you need to collect your retirement, in order to give you your money back.

In 2007-2008 the government tried to ‘give’ everyone $300 through the tax code as a stimulus. This was mostly playing with timing. The taxes did not change; they just gave a lump sum one time and deducted a little extra in paychecks the rest of the year. This ‘giving’ of $300 was taken from them a little per paycheck.

In conclusion, the government should only be taxing us for the things only government can do. The Haley2024 plan has government spending roughly 10% of GDP total for all three levels. The tax code should just raise money, not redistribute wealth. The government should only go in debt to protect freedom in a war, and that should mostly be planned ahead. Retirement planning should not be run through government, but the point here is that assets should be accumulated, not a pay as you go system.

The broken Window and War Economic Stimulus Fallacies

5/8/2016

There is an economic theory out there that way too many people buy into. Nobel prize winner in economics, Paul Krugman thinks that it is a great idea. Congress passed the 2009 stimulus, with this theory. In the 1930s, the government killed many cattle to rot and burned crops, on this theory. The point here is that it is winning the day in government and needs to be thoroughly debunked.

The theory goes like this: if you destroy something that people want, then they will have to do work to get back to the status quo. That work will add to the GDP and make it appear that our economy is growing. It is a simple first-grade understanding that this is a horrible idea.

I feel like I am talking down to the reader to explain this; however, since these economists are getting politicians to ‘break windows,’ it is imperative that they learn this simple lesson. Work is not the goal; the result of the work is the goal. It is always a good idea to get the product or service with the least amount of labor so that other labor hours are freed up, to make other items.

One also has to look at what other uses that money to repair the window, could be spent on. That new item or service does not happen because the window owner needs to use the funds for the window repair. Not having the other good or service reduces the window owner’s standard of living.

Just restoring back to the status-quo reduces the standard of living. Everyone knows a time when they would have liked to have been enjoying their leisure hours; however, needed to stay after to fix a 'broken window.' Certainly, common repairs due to wear and tear are understood and budgeted in your expenses and time; however, purposely breaking things to ‘create’ more labor is beyond stupid.

Going to war is indeed better than being enslaved or otherwise oppressed. It is worth laboring on making weapons and laboring on being a soldier for the goal of staying free. Going to war does bring more economic activity; however, this economic activity does not make us better off, outside the goal of remaining free. This extra economic activity only brings us back to the normal, of being free.

In WW-2, millions of men went over to fight; thus they were not back home starting businesses or working for one. Millions back home went to work in factories supplying our men with supplies, weapons, and equipment to better fight; thus they were not using their labor to make products that others could enjoy. Many went to work for the first time for the war effort, thus losing leisure hours.

Many worked long hours and sacrificed leisure hours to do their part in the war effort. They were dedicated to their jobs, so their sons, fathers, brothers, and friends had what they needed to come back alive. Their motivation to work was much different than in peacetime. While economic activity increased, people had a much lower standard of living.

Indeed, the soldiers had it very rough. They lost friends, legs, sanity, and lives. They slept outdoors, the food was terrible, and the stress was overwhelming. War is HELL. This extra economic activity did not bring a better quality of life to these young men. The loved ones back home were without their loved ones, worked extra hours to make bombs to destroy things, not products to enjoy. While they may have gotten paid, they the taxpayers, were also the ones doing the paying.

Contemplate a scenario, where you and a few friends are relaxing at a pool and having a leisurely cookout after a long week of work. If someone were to come in and drop a lot of garbage in the pool, would you be happy? After all, you would ‘work’ to clean the pool to get it back to a normal state so you could enjoy the cookout and swim.

Are you better off because you did more ‘work,’ even if it is to restore the status to normal? They added work time and reduced leisure time with NO extra product or service to enjoy. With this same scenario, let’s add that the people that threw trash in the pool also demanded to fight. This does not make you better off!

Yes, you will do labor in training for the fight, labor making weapons for the battle, labor fighting and paying for labor for the nurse, to nurse you back to health. All these extra labor hours are counted in the GDP; however, all this labor is just to get you back to the point where you were; the leisure around the pool with some friends.

In conclusion, this whole blog might sound simple, and it might seem unbelievable that Congress ordered millions of cattle killed (the 1930s), millions of acres of crops burned (1930s), millions of cars destroyed (2009-2010) among many other acts. Some argue, roads need to be repaved just for the jobs, not because it needs it yet. Many still foolishly advocate war to increase our economy.

An economic lesson: What if all the restaurant tabs were collected and divided by the number of tables and everyone was given an average bill; would you order differently?

11/22/2015

An economic lesson: What if all the restaurant tabs were collected and divided by the number of tables and everyone was given an average bill; would you order differently? If you and your spouse went to a restaurant and they sat all 50 tables at once. The menu had many items with widely different qualities and prices. Many different drinks, desserts, appetizers, and main dishes were there.

Some people had plenty of money and wanted to live it up and was willing to pay for the best of everything and would probably end up with a bill of over $100. Others had a very tight budget and had just water and a simple, inexpensive meal. They could walk out for less than $20. All 50 tables had different tastes, means, and desires. Everyone took into consideration the cost of what they ordered.

After everyone had time to look over the menu and make their choices, but before the order was taken, the manager steps out to make an announcement. The manager stated they were going to take every tables tab and add them up and divide it by the fifty tables. Everyone was going to get the same bill for their food.

The question is, are you and others going to order differently. Are you going to forgo the nice glass of wine? Is the next table going to add an appetizer? Is another table going to grab an extra meal to go? Is someone going to switch from an $8 hamburger to a $28 surf and turf? How many desserts are added by people that had no previous intention of getting a dessert?

Everyone knows economics when it comes to their own pocketbook. They change their minds very quickly when the circumstances change. Before the change, everyone realized that a $10 dessert would be paid for entirely by them. After the change, everyone only paid 2% (one fiftieth) of what they received, thus only 20 cents for that $10 piece of pie.

The restaurant really increased their overall sales that night because everyone knew the extra cost was being split fifty ways. Some thought: why should that table get an appetizer, and not us, because I am paying for part of their food. The incentive and disincentive structure is entirely different. Now the question arises: are these customers coming back under this arrangement? What if they were forced to come back for every dinner?

Ask yourselves; is this similar to the states receiving funding from the federal government. There are a few differences; however, the fundamental incentive structure is the same. The federal government collects taxes from every citizen from every state. The federal government offers states funding for many projects.

If the states collected taxes just from their own citizens for the same project, the taxpayers of just that state would have to pick up the entire cost of the project. If the money came in from the federal government, taxpayers from that state would only be taxed for one-fiftieth of the cost and all other taxpayers from the nation would be taxed for the rest.

There is a strong argument often made that if the state does not take the funding, then the funds will go to another state. Many people are rightfully concerned that they were taxed to fund another state’s project and our state did not get any benefit. The incentive structure is always to wait for the federal government to do it because then taxpayers from around the country will pay versus higher state taxes.

Haley2024 the Movement calls for most government functions to be in the free enterprise system; however, whatever does stay in government, be taxed and funded by the same level of government. Haley2024, also calls for no general budget, instead, a very segregated tax for every program.

A Simple, Yet Typical Business Model Made Illegal.

11/18/2015

A typical business model is often made illegal by the Left in many ways. Let start with a business that has $2 Million in sales. The model is low overhead and high labor cost. Think lawn care.

The Company Budget

The business has expenses of $500,000 in office, equipment, vehicles and assorted other items. The owner takes a salary of $100,000. The business pays 2 managers a total of $100,000. The business pays $150,000 in taxes and $150,000 in benefits to the employees.
This leaves $1 Million for 100 part-time employees averaging 20 hours a week. This business model is looking for 16 and 17-year-olds from the inner city. The job’s pay is $7.25 to $10 an hour, with the average hourly ‘total’ cost to the company of $10 an hour.

Everyone Is Benefitting

This business puts about $170 a week in each of the pockets of these 100 teenagers and teaches them a skill in a trade and basic work skills. The teenagers are benefiting! The customers are benefiting! The 2 managers have a good job! Governments are getting around $720,000 in ‘all’ taxes. The owner/ company is serving his fellow citizen enough that they distribute $2 Million to him.

Feel The BERN !

Bernie Sanders or any on the Left gets elected and ‘Tries to help’ and make things equal. First, he raises taxes on the business by $200,000 a year. This takes the total payroll for labor from $1,000,000 to $800,000. Labor was already very tight, meaning every hour of labor was very much needed to accomplish the jobs.

Experiments in raising the cost to the consumer-led to a substantial loss of customers. Cutting wages for everyone back to $7.25 an hour resulted in losing the best employees. Cutting corners on the work quality resulted in unhappy customers and many refunds. Cutting non-labor expenses was very minor and creating long term problems.

Mandating Health Care

The health care mandate Bernie signed into law that puts an $8,000 per person health care expense on the business almost doubled labor expenses. Given that this reform would be bringing the cost of the average employee from $10,000 to $18,000 and add $800,000 of extra costs to the business. Many other business models need to be considered if any are even possible.

Doubling the Minimum Wage to $15

Bernie signs into law a new minimum wage. Given that the employees are 16 and 17 years old, it is fair to say that they do not have a lot of experience or skill that earns the business well over $15 an hour. This business model barely works at $7.25 to $10 an hour and raising it to $15, doubles the labor expense to $2 million where only $1 million was available.

Shutting Down the Businesses

Anyone of these changes will harm this, and many other business models and all three will overwhelm this business model. All the benefits listed above go away. Hundreds of inner-city teens will be forbidden by law, to sell their labor for $10 an hour and learn essential job skills.

Hundreds of thousands of dollars will not be paid to the government, instead hundreds of thousands would be added to the government assistance programs. The poor that ‘need’ the product or service provided by these companies will have to pay double or more, creating much harm to the poor. Many will just do without. Vendors that supplied, this now out of business company, with goods and services have less business, thus less pay as well.

The role of prices is highly valuable to achieve the proper levels of goods and services. Prices are also the best way to distribute goods and services.

9/24/2015

Good economics is common sense, and the role of prices is just your reaction to offers of trade. First, your money represents work that you do to earn that money. When you buy something, you instinctively know you are trading a certain amount of your time at your work for the goods or services you purchase. The more work you have to do to buy an item, the less willing you are to make that purchase. The higher the price, the less attractive the trade.

On the consumer side, everyone is different and affected by various circumstances; therefore, all people value an item to purchase differently. To some, an item is not desired at all, and they will not buy it at $0. Others could value it just a little and so on, all way to a few people who will pay vast amounts to buy that item. Therefore, a low price will attract many buyers and the higher the price becomes, the fewer people are willing to buy. This is just common sense, the lower the cost, the more people buy. Stores know this very well and are proven every time a ‘sale’ moves more product.

When prices markedly rise for a business on a specific expense, the company quickly seeks out new suppliers. The higher price sends a signal that more supply is needed to bring the price back down. A company can deliver that service ‘in house’ or encourage people with that expertise to start supplying that service again. These higher prices also cause a more significant interest in innovation and capital. Often that expense can be substituted for a different but acceptable alternative which leaves less demand on the original product so the price can drop. Free enterprise is very dynamic leading to many responses to changing prices.

Let say there are 1,000 identical widgets produced every day by ten producers at 100 widgets each. At $x price, only 900 are sold a day. No producer wants to be the one not to sell their product so the producer with leftover product will lower their price to sell out. All the producers will eventually drop their price, so THEY sell all their merchandise. As the price decreases, more people decide to buy, thus bringing demand up to 1,000 widgets a day. Let’s say that the price settles at $.90x to achieve the demand of 1,000 widgets.

All the producers will determine for themselves if that price is profitable enough for their employees and themselves, the employers. If one producer closes down, the supply is at 900. If the demand is 1,000 widgets, customers will be deprived of 100 widgets. Many customers will bid the price back up to $x so that they are not deprived of their desired widget. The factors and scenarios are so numerous that no article can address them all, but the principal on the production side is that if prices are high, more producers looking for that high profit will produce more product. The producers that value their labor and time more than the going price will seek different more profitable products to make.

If a business is selling $x and their expenses are $1.1x, then they are losing $0.10x. The business owner might be the one making the final call to lay everyone off, but in reality, the customers of that business did not value their product or service enough to pay the needed expenses. In the end, a business owner cannot just choose to pay out more then what is coming in just to be nice. The customers are the final deciders of whether a business fails or succeeds. Thousands of factors go into decisions surrounding attempts to save a failing company that are too numerous for this article.

On the production side, the businessman looks at the going price and tries to determine their cost per product. The businessman decides whether the profit achievable at the ‘going price’ is worth his labor of starting that business. That businessman will often evaluate many products in search of the most profitable enterprise to start. That search and evaluation is a key component ensuring the ‘correct’ amount of product is produced.

If a particular sector of the economy, even a tiny subsection is requiring x% of the overall labor to fulfill the demand, it is vital to allow prices to entice enough labor hours in that sector. If new capital meets with ingenious ideas that lead to substantial productivity gains, less labor is needed to achieve the same output. This leads to two great things happening, the price drops making that item available to a larger group of consumers and labor is freed up to serve people in new ways. The Left just looks at the lost jobs and those that understand economics look at increased living standards for everyone.

The proper price cannot be imposed by government officials, in fact, when they try, things go badly. If the government prices an item to high, supply would increase and the demand decrease, leaving excess product. The minimum wage is a good example. If the government prices a product too low, quantity and quality are decreased and demand increases. Shortages will occur, and the government would step in and determine rationing. The government has a long history of distorting the price and then trying to regulate more to ‘fix’ the problem they created, often making the problems worse. The price mechanism solves issues if the government gets out of the way.

In the banking sector, the price of people borrowing capital for a certain amount of time is called the interest rate. In the free enterprise system, the higher the price (interest rate), the fewer people are willing to buy (take a loan) and alternatively, the lower the price, the more significant the amount people will be willing to borrow. Ten percent interest is likely to be paid to keep a business open; however, is likely not going to attract many home buyers. On the supply side, the more a bank is willing to offer to pay someone to deposit their money, the more money (capital) will be saved; thus, more will be available to be lent out. The government through the Federal Reserve profoundly distorts this market wreaking havoc with the economy.

All Taxes Harm the Poor the Most

2/1/2015

The Left constantly states that they need to tax the rich more to help the poor. Please look at the Haley2024 Welfare to Charity page to find out the best way to help the poor. This page is to explain how higher taxes harm the poor. It is very true that higher tax rates harm everyone; however, the poor’s well-being and living standard diminishing is much grimmer than the rich losing 10% or even half of their wealth. Lower taxes increase GDP, meaning that many more of the poor are employed, thus moved into the economy and at higher levels.

The economic principal for supply and demand applies to the labor force as well.

On average, the poor are less experienced, less educated and has a lower product or service output per hour compared to those making average wages. In an economic or business recession, the poor disproportionally lose their jobs, have their hours reduced and accept lower pay rates. When businesses and the economy thrive, the poor reap much of that increase. Many more opportunities come available, and upward mobility prospects are enhanced.

There is a certain amount of taxes that need to be collected to do vitally essential tasks such as national defense and creating the rule of law. However, because all taxes do harm, it is vital that we, the citizens of each state and of America turn over as much to the free enterprise system as possible.

Congress once passed a massive yacht tax thinking it would only affect the rich. Many of the rich bought, serviced and lodged their yachts outside the taxing authority and within a very short time, many thousands of yacht-related businesses closed or scaled back; thus significant job losses at all income levels occurred.

On a side note, the new tax brought in very little and overall taxes decreased due to all the businesses and employees losing their earnings, thus paying fewer income taxes. YES, the poor were harmed the most.
Blog: The Poor are Harmed the most by the Effects of the Laffer Curve
It did not take long for the tax to be lifted when the effects were very evident.

While this example was clearly seen, most are not as evident, although they are still very real. There are many businesses that have never been started because they could not get a loan. In many cases, they could not get a loan because of the excessiveness of the existing national debt consuming available capital.

Uncle Sam borrows so much that would otherwise be lent to start businesses. For many good reasons, the poor are on the bottom of the list to get loans to start businesses. The more capital available, the further down that list has their businesses funded. The poor are harmed most by greater government debt.

Income taxes, sales taxes, real estate taxes, payroll taxes, gas taxes, business taxes, death taxes, sin taxes, wealth taxes, inflation taxes, and value-added taxes are all taxes that collectively take 38% of GDP. The issue here is not what tax is the best, but that all taxes do harm. As tax rates rise, fewer transactions and fewer businesses make sense.

When fewer businesses make sense, jobs become less plentiful. The poor are usually hit first and the hardest. Lower economic activity leaves those less experienced and talented out of work or needing to drop their wages to keep their job. When businesses are plentiful because of the lower prices of doing business (tax rates), companies need to bid up their job offers to attract better talent. A few percentage points of jobs available create much higher pay for everyone, giving those with less skill and experience more opportunities. All wages go up when more businesses are open and thriving.

Every tax is built into the price of the transaction. Taxing the rich means taxing the transaction of the poor trading with the rich. The only place the rich can attain the money for the tax is that transaction. In conclusion, the poor pay for much of the tax because it is priced into the products. Higher prices for the products the poor buys harm the poor. Lower economic activity created by greater disincentives of higher tax rates disproportionally hurts the poor.

Government Spending Decreases GDP

2/1/2015

About 39% of GDP is spent by the government, thus meaning roughly 39% effective tax when you combine federal, state and local taxes. These taxes are spread out over businesses and individuals; however, they are always ultimately paid for by people through higher prices, lower incomes or direct taxes. Possibly the most significant tax is the unseen loss of opportunity. When there is a known price (tax) on an item, whether it is labor or product, higher prices (tax rates) decrease the quantity of those purchases.

Not many people pay attention to the high-priced apple left at the store, in the same way, an entrepreneur often will not start a business if prices (business taxes) are too high. My teaching on the Laffer Curve shows that the higher the price of tax rates, the lower the economic activity, which harms everyone.

Capitalism and free enterprise are when everyone competes to see who can serve their fellow citizens the best. It is only possible when everyone chooses how their time, labor, and property is distributed, usually to those who serve them best or pay them the most.

If the government gives (unearned) money to everyone, the government first has to take it from them. Most people think that money is coming from someone else, but taxes come from everyone. Collecting taxes creates a disincentive to earn money.
Conclusion: People as a whole lose wealth when the government takes taxes and gives the money back to taxpayers. Social Security and welfare are examples of this.

A tax on some is a tax on all, though sometimes it is hard to see the connection.
For example, a business owner has to pay matching social security taxes for each employee. This money is part of the employee's compensation package; thus the employee only receives about 93% of his compensation package.
Another example would be when a business pays corporate taxes.

Those taxes are collected in a few ways such as increased product costs, increased charges on services, reduced pay for employees and most notably: loss of jobs and a supply of goods and services when a company goes out of business. The final example of harmful taxes are taxes on the rich. The rich are, by definition, the ones serving their fellow citizens the most. Taxing them creates a disincentive to serve their fellow citizens.

For every dollar a business owner makes, others such as employees, suppliers, and subcontractors make much more. If a business owner made one million dollars instead of two million because of taxes and related disincentives, tens of millions of dollars are not earned by others associated with the business.

Something is only worth what someone is willing to pay for it

2/1/2015

The first lesson about economics is that everything is only worth what someone is willing to pay for it. Prices fluctuate regularly because people constantly change what they are willing to pay for one item compared to other items. Supply and demand are major causes of price and price is a major factor on supply. The role of prices are vitally important factors in ensuring the best efficiency and advances, government unduly influencing price does great harm.

When this economic law is violated by the government, less economic activity occurs. By government violating this law, we have wreaked havoc and reduce efficiency. This occurs by many variations of price controls such as explicit price controls, subsidies, tariffs, barrier to entrance, corruption, among others. When the government is a significant buyer of a specific sector of the economy, it ultimately becomes price control.

With over 318 million people in America and 20 times that around the world, we realize that everyone has different mindsets and therefore a different willingness to pay for any given widget. The timing of attaining a widget is very relevant to price. One must realize that a second or tenth widget is less valuable to a person and at some point attaining another has zero to negative worth. All this to say that there is no set price for an item, but people set prices to maximize their profit from any given widget.

Why People Don't Work all 168 Hours a Week

7/27/2014

There are 168 hours in a week, so why do people not work all 168 of those hours making money?

The first hour you work and the money that follows is always more important than the next hour; the second hour is more important than the third and so on.

The first hour off work and the rest or recreation that follows is always more important than the next hour off; the second hour is more important than the third and so on.

While everyone is different, most have settled at 40 hours working and 128 hours not working. In the past, the average workweek was much longer because of lower productivity.

The meeting place is usually when needs are met, and a certain amount of desires are satisfied.

This affects public policy by giving a better understanding of the cause of the Laffer Curve. If much of your needs are met before taxes are started, then a higher percentage rate of tax is required in the high-income levels. If 50% of your earnings are taken away in taxes, one would be less inclined to work that extra hour since the extra money is just for something wanted, not needed.

Let’s say that you worked a 60-hour week in 5 days. 40 hours at your full-time job and 20 hours at a second job. It is 11 pm on Friday, and you are exhausted and looking forward to the weekend with the family. Your needs are met and some of your wants. Your normal pay rate is $20 an hour. Your friend calls you up and offers you a 5-hour Saturday job that is highly physical and during the time of a planned family outing to the park.

Your friend has others that can do it and is giving you first opportunity. Do you take the job? Is the pay a factor? If the pay-rate was $5 an hour, the answer of 99% of the people is ‘no.’ If the pay was $200 an hour, the answer of 99% of the people is ‘yes.’ If your line between yes and no is $50 an hour, what if the offer was $60 and the tax rate for those Saturday earnings was 50%? Do you make up your mind on before or after-tax pay?

The point here is that everyone thinks economically. More people need to understand how their decisions times everyone makes up the economy. Everyone is at different points in their lives and has different priorities. If someone is in great need of money, they are more willing to take lower pay and those that really need that family time will wait until the price is much higher.

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