I Hate Economics (No, Really)

As much as I tell myself I don't like economics or that I shouldn't try to become an economist, I keep catching myself making posts about economics. Why is that? If I knew, I would probably be a successful economist, and that would be bad because I lack the necessary levels of misanthropy for such an occupation. On a scale of "Buddha" to "economist", I come in towards the middle at "sarcastic musical satirist". That says a lot more about economists than it does about musicians.

Anyways, today's post is about a fundamental economic principle that many in the American public don't seem to understand: JOB CREATION.

Here's a little more info about me that you probably didn't care about but will now know regardless: I work a crappy job with crappy pay. Maybe I'm being a little unfair... It's an OK job and the pay is certainly more than I get from writing pointless blog posts on the internet, but the worst part is the scheduling (or lack thereof). For you non-business majors out there, all companies have a little thing they like to call "payroll", which is a big list of all the money that the law mandates them to pay to their wage slaves. Sometimes it may seem as if the payroll is endless because we, the consumer and/or wage slave, never see it. Everything just magically appears in our bank accounts via direct deposit from the massive Gringott's vault that is Corporate HQ. For instance, I work in retail; my store's payroll- and thus scheduling- is directly related to my store's income. The correlation is roughly 5 extra hours of work distributed per $1000 of sales. With a smaller staff, this is all fine and dandy: my store income averages around $45,000 a week.

However, my corporate masters seem to have arrived at the conclusion that adding 15 more employees per store during the summer (our slow season) is a good thing. Now some of you may be confused about what I'm getting at. I mean, who says more jobs isn't a good thing? I do. That's right, I do. At least in this situation. You see, thanks to years of government regulation and union action, we aren't forced to live in Michele Bachmann's Serfdom Wonderland wherein hourly pay for menial jobs (like mine) would range from "slave wages" to "no wages". I appreciate the fact that there is at least a  lower monetary limit to the inherent shame associated with fast food jobs, shopping cart wrangling, movie theater cleaning, and toilet scrubbing. That being said, when a company hires more employees, wage and payroll constraints demand that those hours have to go somewhere, and that someone has to lose out. The only answer is that since these companies can't make the minimum (or other industry-standard) wages go away and neither can they magically inflate their income (no matter how much they may want to), they should just stop hiring- at least for the time being.

"But this is a recession!" you say. "We need more jobs!" you say. That's all true. Theoretically speaking, the total amount of "jobs" in the world is only limited by human ingenuity. In all honesty, I kinda thought Newt Gingrich's moon base idea was pretty sweet. Just think about it: space is infinite and thus filled with infinite resources in the form of metals, gases, even habitable planets (this would be an infinite subset of infinity, but humor me a little). If we wanted to effectively end unemployment forever, space exploration is the way to go. However, we run into the same problem as before: payroll.

We're still dealing with the same old supply-and-demand model we learned about in school, except in this case the demand is quantified as "corporate payroll" and supply is represented by "number of employees". If demand outpaces supply, a perfect world would see workers with higher wages dictated by higher income. If the opposite is true, you'll experience what I have at my job: all the slightly-higher-than-minimum-wage peasants like me get stuck with less hours after scheduling.

Let's look at this on a national scale. Assuming that employers maintain current wage levels and consumer spending stays constant, increased hiring as a solution to the economic crisis won't be very effective at leveling wage gaps. Based on what I've discussed above, the total amount of work hours allocated (let's call it X) would remain the same, but instead of being divided among the current workforce (Y), it would be divided by the increased workforce (Z). Payroll would be distributed more evenly, but all that would mean is that with X/Z, everyone is getting screwed over equally instead of in X/Y, where only some are getting screwed over.

We also have to keep in mind that corporations have no intention of increasing wages unless there's some sort of calculable gain on the side. If corporations are people, then they're cranky old misers with smoking jackets and scotch breath. They ain't givin' you nothin'. Bearing that in mind, the only variable in this equation is consumer spending. Now even though the only thing proven by "trickle-down" theory is that the rich can make up economic theories just as easily as amateur bloggers like me can, this post isn't supposed to be a tome. If you want a tome, go read Das Kapital or The Wealth of Nations. We could get into complicated arguments about where your money will go after you spend it, but the point is that hiring alone won't solve our problems. Either we spend more and we spend intelligently, or we wait around for Congress to pass a massive public works/infrastructure employment package à la the Civilian Conservation Corps, but we all know that that ain't gonna happen. Not with our present Congress, at least. This is a shame, because the construction of a trans-continental, electromagnetic bullet train network would not only provide thousands of jobs (I won't even guess at how many thousands, but I'm sure it would be a lot) but would be at least one thing we could do better than the Japanese or the Germans.OK, maybe not better, but definitely bigger. 

Whatever.

I hate economics.