Is it really just greed? Part 2

Remember, the Apostle Paul told Timothy, and us, "For the love of money is a root of all kinds of evil, and by craving it, some have wandered away from the faith and pierced themselves with many pains." 1 Timothy 6:10. This was a warning about greed. It affects and distorts everything it touches. The minimum wage issue, which I discussed last January, is also impacted by the affects by greed. It distorts the perception of the very proponents of an increased minimum wage so much that they sincerely believe raising the minimum wage will help everyone. Am I calling proponents of raising the minimum wage greedy? Well....yes, but let me explain.

Real unemployment is about 12.1% according to the "U-6" rate that measures total unemployment, more reliable and accurate than the main "adjusted" figure of 6.1%. Both come from the Bureau of Labor Statistics. If one considers the unemployment rate, and viewing labor as a commodity, why would raising the cost of a commodity against what the law of supply and demand dictate be a good thing? When there is an excess of something, you don't get rid of it by raising the price, you lower the price. For example, if I have 1000 1963 Split Window Corvettes for sale, and I am having trouble selling them at their current value of $55,000.00, I am not going to raise the price and think I can sell them for $100,000 each. That would not make sense. Similarly, if I have 12.1% unemployment, why would I think increasing the cost of labor would reduce the number of unemployed? In all probability, raising the price of labor will increase the number of unemployed. 

Further, consider how greed affects the perceptions of some groups on others. Most people want more money, but they don't always want to do more for it. Some work longer hours, but most would rather not. Some people want raises, but as Robert Kiyosaki pointed out in his Rich Dad, Poor Dad books, employers usually want to know what they get for the pay raise, and employees usually say "why nothing, I've just been here a long time." Other assets depreciate over time, so why should an employee asset be the opposite? Or perhaps this is just the employer being greedy and not wanting to spend more money. Except, the employee is exactly like the employer; the employee doesn't want to spend more money on things either, so why is the employer greedy and the employee not? This the the distortion effect of greed in action. The employee wants more, and calls the employer greedy out of envy, not because the employer is actually greedy at all. Envy is closely related to greed, and has a distorting effect on perception as well.

This is not to say there are not some employers out there who are just as motivated by greed and are in fact greedy. They usually run their businesses poorly, and do not often survive in the economy, especially today's economy with all the social media and information available. Even in the past, however, businesses that didn't treat their assets well, including their employees, often failed. Sometimes it took a while, particularly if there was limited competition. Competition, however, and the desire to do better, would help balance the scales. Understanding this is the key to getting past the effects of greed and correcting perceptions. The reason for business, at its heart, is not really about making money; it is about helping each other, and serving needs. It is the "how" and "why" one goes into business that truly matters, not seeking the "what" of money. Money is simply the measure by which we can judge how well we are helping and serving. Businesses seeking simply the "what" that is money, as I explained, do not last long because they have the wrong motivations and as a result mistreat their assets.

Is it really just greed? Part 1

Last June 24th, 2014, while flipping through the channels, I came across a large press conference featuring Governor Inslee, Chief Batiste of the Washington State Patrol, Sharon Foster of the Liquor Control Board, and several others. The conference was set to discuss the impending implementation of the new Washington recreational marijuana laws. Aside from the general announcement that everyone thought implementation was going well and that it was largely expected to be smooth, what really stood out for me was the grand display of greed.

Like most everything, you can tell whether something is generally good or bad by the fruit that is produced. This can be actual fruit, such as cherries and apples, or this could be a mass produced product. Good things tend to produce good fruits, and bad things tend to produce bad fruits. Simple, right? Except that some bad things produce such bad fruits that it affects everything that surrounds it. There is a rule in the law that helps illustrate this called "fruit of the poisonous tree." This rule is primarily a criminal law rule that is derived from the evidentiary exclusionary rule.

The exclusionary rule holds that the government cannot use evidence gathered in violation of the Constitution. For example, if the police search your home without a warrant, any evidence obtained cannot be used against you in a criminal prosecution because of the 4th Amendment violation. The Fruit of the Poisonous Tree rules says that any evidence obtained using any evidence gathered from the Constitutional violation also cannot be used against you because it is essentially tainted and unfair. The initial violation affects everything around it. The same can be said of many vices, such as greed.

Greed produces a distorting effect on ones perception. In a culture such as ours where morality is taken as relative to the individual, it is interesting to see that greed is still otherwise outright condemned. Yet the distorting affect of greed and its power twists perception so much that, despite this general condemnation, causes many to continue to be affected by it, and in turn to endorse other immoral practices like fruit from the poisonous tree. Greed causes us to lose our focus on what is really important, our relationship with God, and our relationship with each other. This is what the Apostle Paul meant when he said "For the love of money is a root of all kinds of evil, and by craving it, some have wandered away from the faith and pierced themselves with many pains." 1 Timothy 6:10.

Notice it is not money that is the root of evil, it is the love of money that is the root of all kinds of evil. Money itself it neither good or evil but a necessary tool related to our interactions with each other. The love of it, and blindly seeking it above all else is what is evil, and what produces a distorting effect on people. Getting back to the press conference, it was amazing to see that many legitimate concerns were blatantly ignored and down played while emphasis was added to the idea that revenues for schools would soon be increasing. I suspect that the "for schools" part was merely ancillary to the expected increase in revenue itself. Lest we forget, increasing tax revenues was the primary argument for legalizing such a harmful substance. It seems otherwise lost on those who supported legalization that though most of them also spend years working to ban cigarettes because they were harmful are now fully supportive of legalizing something far more dangerous all for the sake of increasing tax revenues. The love of money.

There were questions asked at the press conference about marijuana infused products, such as gummy bears that one could eat to get high, being sold, and how to keep such products away from children, or to prevent Joe Camel style advertisements in check. Unfortunately the focus would always return to how smooth implementation seemed to be going, and that revenues were expected to be positive, all in typical "politician-ese" answering without really answering at all. The only response to how children were being kept from the drug was that the issue was regularly being monitored and looked at, but no definitive or satisfactory answer was provided. Greed distorted perception, focusing on revenue over safety. Chief Batiste mentioned that DUI's had increased only 4.9%, as if that were a good thing since it was only a small increase as opposed to a larger one. I would have expected any increase in DUI's, since DUI's were a point of contention during the dope legalization campaign, would have been more of a concern, but alas, the distorting effects of greed struck again. DUI's up? Not to worry, tax revenues are expected to be up too.

Even as we see what is happening in Colorado, where pot is getting into the hands of children, revenues far less than advertised, and the black market growing and spreading to other states, Washington seemed completely unconcerned. After all, this is going to be a new revenue stream. Except that only two growers have been given the okay to sell to retailers so far, and as a result, they are having to sell pot at $4,000.00 a pound. Simple economics would dictate that the black market, still around and probably stronger now that enforcement is practically non-existent, is not likely to disappear anytime soon. In all likelihood, the black marketeers will be the ones reaping all the benefits of legalization, not the state. Lets also remember that Washington was known for its economy and technological innovation. Now global companies are wondering, do they want to come here and deal with the problems that come with a stoned workforce? Again, the distorting effects of greed strike again. While we should be focused on safety and virtue, we instead have higher regard for increasing tax revenues and encouraging harmful vices to the detriment of our children, our community, our economy, and our relationships with each other.

Why Increasing the Minimum Wage Hurts Employers and Employees Alike.

Recently there has been a push by many unions and some politicians, including the use of ballot initiatives at the local level, to raise the minimum wage. In the City of Seatac, Washington, a suburb of Seattle, such an initiative passed raising the minimum wage to $15/hour within the City Limits, though the Airport has been exempted judicially. Other proposals range from raising the minimum wage a couple of dollars to raising the national minimum wage to $15/hour or more. Some of the more radical proposals have even suggested imposing a "living wage" and forcing employers to pay no less than $50/hour. Such extreme proposals obviously have no chance of being implemented, but the fact that certain elements in society are shifting the economic debate to focus on wages demonstrates a fundamental change in how our culture now views economics and people in general.

Economics used to be viewed in terms of businesses being collaborative and cohesive, benefiting employers and employees alike. This is somewhat idealized, but bear in mind, people are imperfect and they sin. The more successful companies in history, however, strive, and have sought after this ideal, and usually come pretty close. Think Hobby Lobby, Starbucks, and Microsoft, among many others.

For many years in this country, the economy had been looked upon as an arena of competing interests, full of opportunity to achieve. The arena was composed of various markets, where goods and services were sold. Each participant sought to “make a living” in order to provide for a family. Creativity and inventiveness were rewarded, often by creating new markets and industries filled with even more opportunity. We have seen throughout our nation’s history that as we shifted from a primarily agricultural society to an industrial and now and information driven one, opportunity to achieve has also increased. This often required parties to work together, and the vast majority of successful enterprises begin by a simple act of cooperation toward a common goal.

Starting with agriculture, the farmer grew what he needed for his family, and either saved or sold any surplus. Then the farmer sought to improve his lot in life by growing more of a surplus, and diversifying crops, growing not just food, but things that could be used for making other useful goods, seizing opportunity and hiring more farm hands. Gradually, as the textbooks point out, Eli Whitney and his cotton gin were just the beginning of new and growing markets and changes to the economy. Farmers began improving how they farmed, rotating crops, using and improving fertilizers and pesticides. People like Whitney began a new mechanized market by developing farm equipment. This led to the increase in wealth, which led to the need for banks, land, lawyers, etc. As operations grew, more people had to be hired as contractors or employees to do more jobs. People thought up great ideas to improve life for everyone, such as the train, the car, the ability to make ice to keep food from spoiling without having to cure or pickle it. All of these developments took cooperative ventures.

This is not to say there were exploitative situations, cheating, or other injustices; there were, and there will continue to be so long as people remain imperfect. The driving force was to improve one’s position, though; to work hard, and to serve your fellow man. People sought out opportunity. Henry Ford once noted that he could make more money if he made his cars more affordable. If he could build and sell cars for $500 to a million people, instead of $5,000 to only 10,000 people, he would sell more cars to more people and make more money as a result. The same concept has been applied to virtually every major product that is mass produced for public consumption, just look at computers and TV's. The point was that if you did a good job and the public loved your product, you could be rich too.

But this concept also applies on the small scale too. Work is not bad, or evil. It is something that is good for you in many ways. Laziness is not good, and overworking is equally not good. However, work in and of itself is not bad at all. For Christians, we recognize that even before the fall of man, God had created work for us in the Garden of Eden. God himself worked when He created everything. God showed us that it is not good to be lazy, but He also showed us to stop and enjoy the fruits of our labors and not overwork when he rested on the seventh day. Similarly, Man worked in the garden for God, and was rewarded with his every need provided for.

After the fall, however, work became more difficult. It required more of a focus on working together, helping others, and serving others. Throughout human history, we can see the benefits of teamwork in our survival, and in doing business. The key is working to serve others. In economic terms, this means that labor, skilled and unskilled alike, have the potential to become commodities like any other raw material. Labor, however, is a unique raw material in that is it derived directly from people. This means that such a “commodity” must be valued differently, and on more than one basis. It also means that labor should be considered more than just a raw material, but a special asset as well.

First the employee as asset. Labor is valuable for what the person providing it can do for you, but also for the relationships that form, and the sense of community that develops. For instance, it is not uncommon for friendships at work, and even romances, to develop. The employees at large factories would think of themselves, and indeed often refer to each other as part of the family (Welcome to the XYZ, Corp. family!) As many who study social interactions will tell you, businesses with a strong sense of community tend to be more productive, and the employees tend to be more productive. However, when that sense of community is broken down, moral suffers, and sometimes the business closes down.

Examples of this include the recent demise of Hostess prior to its resurrection, (possibly a topic for another day) the labor dispute between Boeing and the Machinist Union, Chevy and the United Auto Workers, and now the possible unionization of fast food workers. The breakdown in these situations involved wages and benefits. While it is important for businesses to care for their materials and assets, and employees are certainly an asset since we know they are more than mere commodities, it is equally important for employees to recognize their role too.

Businesses provide goods or services to the public, but they also provide jobs and the ability for a person to earn a living. The goods and services cannot be provided, however, if the employees do not perform their duties well. Again, teamwork and mutual respect are the key. When an employer views their employees solely as a commodity and not also as an asset, the employee becomes indistinguishable from an object, inhuman. That hurts moral and productivity. When the employee sees the business as something exploitative and monolithic, the employee also no longer sees the business owners as human. This breaks the necessary connection and collaboration needed for the business to run effectively and efficiently. The result is a constant battle between employer and employee. 

The employee as commodity. We see how an employee is an asset, but as we know, labor is also like a commodity. This means that labor is subject to the law of supply and demand. It would be great if we could hire as many people as we could put to work. Unfortunately, we cannot realistically do this. Not everyone is sufficiently skilled, and the skilled positions are more scarce than non-skilled positions. Also, an overabundance of labor drives wages down. We cannot hire a million people for 1000 jobs without driving the pay down to levels no one who accept, and we couldn't pay what everyone wanted without exhausting available resources and forcing the business to close.

There are also artificial forces affecting wages too, such as employment taxes and benefits. Providing benefits means resources must be used that might otherwise go to profits, or to higher wages. If I pay someone $10 per hour plus a retirement benefit and medical and dental coverage, I can only afford to hire so many people before I have to raise prices. If I raise prices and sales decline, I take in less in profits and may have to either cut wages, cut employees, or keep things the way they are and eventually close the business down. This also forces the employer to think of the employee solely in terms of being a commodity, and less human. Employees also lose the drive to achieve and improve their position, to fulfill their ambition. Whether this is climbing the corporate ladder, starting a new business, or earning prestigious awards in their profession, employers and employees alike have ambition and a drive to improve one's lot in life. If this ambition and drive are removed, it contributes to a view of employees being objects instead of people.

If the government forces the minimum wage up equally artificially, the employer is coerced to think of the employee as inhuman and purely as a commodity only. The tension between the employer and employee also increases, destroying the collaborative cohesion that could, or might have once, existed. The employee wants more money but doesn't want to do more for it, to which the employer believes is unjust, and the employee believes he or she is being exploited, feeling used and unappreciated, and also believes this is unjust. Thus the push for increasing the minimum wage hurts employees and employers alike by distorting the purposes behind work in the first place, and the necessary cohesion and collaboration needed for a business to properly function.

If the drive to seek opportunity is removed from the economy, ambition to improve one's lot in life, and the drive to serve others and to work cooperatively, the economy and indeed whole communities break down leading to disastrous consequences. People begin to see others not as valuable lives but as burdens, as incapable for caring for themselves, and focused only on satisfying base and immediate desires. Such communities are as short lived as the attention spans they foster. Will a $15/hour minimum wage cause such a disaster on it's own? Of course not, but such an artificial imposition on human relationships in the economy certainly contributes to it. People are more than mere commodities. They are inherently valuable, having been creating in the image and likeness of God. Ambition and the drive to improve ourselves promotes dignity and respect. Taking this drive away robs people of their dignity and sense of self worth.