Tags: wage | physician | leisure | ski

Economic Equality Would Push US Toward the Ash Heap of History

By    |   Friday, 23 May 2014 07:57 AM

Inequality is now an important issue and the debate seems to be centered on solutions that will ultimately decrease the incentive to work.

Medical doctors might demonstrate how those solutions would work. The average physician earns a comfortable income, and many are members of the top 5 percent, with incomes greater than $186,000 a year. They work an average of 50 to 60 hours a week. Reducing their incomes would provide an incentive to work less.

Maybe the physician would respond to a lower income by taking more time to go skiing. On the ski slopes, the problem with increasing the minimum wage can be seen.

Many low-wage workers in the leisure industry make a conscious choice to pursue their passion instead of increasing their income. With a 35 percent increase in their income, they might choose to cut back on how much they work to enjoy skiing, or pursue some other activity they prefer to do. Ski resorts would be unable to operate the same number of hours if many on their staff respond to higher wages by working less.

In this example, more equality lowers productivity in the healthcare and leisure industries.

Decreasing inequality, the theoretical goal of so many in the debate, would actually decrease productivity in many unintended ways. That is simply human nature since there would be less incentive to work in a more equal economy.

There would be exceptions and many people would work just as hard as they do now, but society would collapse if economic equality prevailed. Doubters can look to the Soviet Union and other communist utopias now consigned to the ash heap of history.

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MichaelCarr
Inequality is now an important issue and the debate seems to be centered on solutions that will ultimately decrease the incentive to work.
wage, physician, leisure, ski
274
2014-57-23
Friday, 23 May 2014 07:57 AM
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