Tuesday, November 8, 2011

"The Occupiers are right when they say our system of wealth redistribution is broken"

"But they’re wrong about what broke it."

Margaret Wente (Globe and Mail) hits the ball out of the park and over the parking lot into freeway traffic.
The richest 1 per cent are not exactly starving out the working poor.... The problem is, our system redistributes the wealth from young to old, and from middle-class workers in the private sector to inefficient and expensive unions in the public sector.

Among the biggest beneficiaries of this redistribution is the higher-education industry. In Canada, we subsidize it directly. In the U.S., it’s subsidized by a vast system of student loans, which have allowed colleges to jack up tuition to sky-high levels. U.S. student debt has hit the trillion-dollar mark. Both systems crank out too many sociologists and too few mechanical engineers. These days, even law-school graduates are having trouble finding work. That’s because the supply has increased far faster than the demand.

The voices of Occupy Wall Street, argues Mr. Anderson and others, are the voices of the downwardly mobile who are acutely aware of their threatened social status and need someone to blame. These are people who weren’t interested in just any white-collar work. They wanted to do transformational, world-saving work – which would presumably be underwritten by taxing the rich. They now face the worst job market in a generation. But their predicament is at least in part of their own making. And none of the solutions they propose will address their problem.
Do send Wente's article to all the high school and university students you know, for economic lessons are much too painful to be learned through hindsight alone.

The coming generation(s) of potential workers must be taught the fundamental economic concept of labour value. Not all labour is of equal value, and the value of labour is variable, affected mainly by supply and demand.

The number one priority after high school is not to party and have a good time or to pip off to college or uni to get out from your parents' home. No, the number one priority is to obtain training in skills that are valuable to individuals and businesses -- aka The Market -- thus increasing the odds of finding gainful employment with an income level sufficient for sustaining oneself and (potentially) a family.

Get that single priority mixed up and you will likely wind up highly indebted and working low pay jobs, or worse, not working at all and living in a tent in downtown Toronto or Vancouver illogically complaining about how "the man" has robbed you of your future.

What does this mean in reality? It means you need to consider studying fields like mathematics, business, engineering, medicine and computer science, or pursuing specialization is particular trades, such as plumbing, construction, electrical, welding, etc. so that you have a footing of knowledge and skill that lines up with demand today and is more likely to line up with demand for the foreseeable future. It means putting educational dollars to work today to increase the odds generating income so that, should you choose to do so, you can finance a feel-good period of study that does not generate income later in life... AFTER you are earning income.

The lie at the heart of higher education is that you will be paid for effort alone, that you will earn big money because you did the work of completing a degree. The world just doesn't work that way. The world pays those whose knowledge and expertise bring value to the consumer and enable them to make money more efficiently.


Update 15:30: "And if you have any intention of building up a political case for bailing out your bad decisions, you might start with taking even one percent responsibility for them." Burn.

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