Take Care of Other’s Needs, and They Will Take Care of Yours

A central theme to the Living Wage movement is that companies must pay workers a large enough wage to meet expenses for the area.  This usually means a wage to meet the needs of a family of three or four, often with only one wage earner (e.g., a single mom).  No doubt this is the newest attempt by the American Communist Party, with support from a lot of useful idiots, to gain power and enrich themselves in doing so.

On its face it appears to have merit – who wouldn’t want to ensure families have enough money for food and shelter.  The issue is that the system will not work.  It is economically unsustainable.  Here’s why:

Imagine a town of 100 families with no outside trade or wealth transfer.  Each person could do what is needed for their own family.  Plant a big enough garden.  Raise enough livestock for meat and dairy.  Keep their own homes clean and their tools repaired.  Make their own clothing.  So long as each family was doing enough to meet their own needs, working all day, all needs could be met.  If there were a few people in the town who could not meet their own needs – for example, an old lady whose family was gone – some in the community could work a little harder to meet her needs as well.

People in the community could also trade.  One individual who had a tractor and therefore could grow a lot more food than his family needed could grow food and trade with a family that owns a lumber mill and could supply boards that are better than the farmer could make with a saw and axe.  In the end, however, each person would be producing at least enough to meet the needs of his/her family if he/she were not trading.  In trading, they are meeting the needs of other people in exchange for others meeting some of their needs.  They are not just doing work that does not meet the needs of someone and expecting to get paid for it.  They are also creating at least enough wealth to meet their own needs.

In this society those who made more than their family needed to survive would become more wealthy.  Smeone who could grow a bigger garden than he needed while also taking care of his other needs could trade with his neighbors and start to store up wealth.  They could also perhaps build tools that make them more efficient.  They would then be able to make a lot of things to trade and also be able to easily take care of those who cannot produce enough for themselves.

Let’s say, however, that some of the families decided not to grow a garden.  A few could do this, and the others in the community might supply them begrudgingly with some food so they would not starve, in particular if they had children.  If there were a government in place, they also might enact a rule where everyone who grew a garden must provide a portion of their crops, based on how much they grew, to a central facility which the government would then redistribute to those who didn’t grow enough food.

There would be less wealth overall, however.  If everyone were growing at least enough to feed their families, there would be at least enough food to cover everyone’s needs fully.  When some people were not, you would have less production and therefore less to go around.  Note we saw the effect of full employment in the US during the late 1990’s after welfare reform that forced individuals to leave welfare and start to work again.  Not only was there more wealth in the economy, but many individuals were proud of themselves for the first time in their lives because they were producing and taking care of themselves.

So what about the idea that everyone should be paid enough to cover their needs, regardless of what they produce?  Note that this might mean a person with two children might be paid more than another working the same job who was childless.  In some jobs, however, enough is not produced to pay for an apartment, a couple of cars, a cell phone, food, and clothing no matter how great the need for these things.

Jobs such as cashier in a fast food restaurant are also ideal for elimination through technology.  It would be very easy to set up kiosks where customers placed their own orders and paid with a credit card.  If wages were high enough, cooking could also be largely automated, and customers could be required to assemble their own sandwiches.  Someone might be making $15 per hour, but there would be just one or two people working where there used to be three to six, and that person would have the skills needed to fix and maintain the machinery.  This would not be a job for someone walking in off-the-street.

So, how do you provide for the needs of your family if you can’t just demand your boss pay you more?  Whether you are doing everything for yourself directly or working for someone else in exchange for money, you must provide the labor and produce enough in value to meet your needs.  And this is not just working for the sake of working.  The things you are producing must meet the needs of others so that they will provide some of their labor, either directly or in the form of money, to meet your needs.

You can work day and night to do this – perhaps working two jobs – doing basic labor and make enough money if you have a family to feed.  To make it easier, however, you need to be able to more easily produce more for the same amount of labor.  This means learning how to use powerful tools that will allow you to do more.  You can learn to sew by hand fairly easily, but you can sew faster and better if you learn to use a sewing machine.  You can add up inventory by hand, but you can get it done more quickly and produce a more useful product if you learn to use a spreadsheet program, or even better, learn to write software to automate the process.  You can learn to work a cash register at McDonald’s (a task designed for a person who cannot read to do within a day since McDonald’s found many new workers could not read) or you can learn to manage people so that you can help a crew of cashiers to work efficiently as a team and handle issues that arise.

And how do you avoid being replaced by technology if you are a cashier?  You make yourself more valuable by not acting like a kiosk that just takes orders and collects money.  You learn the menu and help people decide on what to order, perhaps making recommendations.  You smile and are pleasant so the customer wants to come back.  You suggest add-ons so that the customer buys more and your restaurant makes a little more money.  If there is something like a price differential when the customer orders a combo, you point that out to them so they’ll get the savings and think of your restaurant as honest and customer-focused.

What you need is inconsequential.  The amount you receive is based on how much you produce,  Really, it is how many people’s needs you meet,  That sounds a lot more virtuous than the Communist philosophy that everyone should get paid what they need regardless of whether they take care of others or not.

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Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.


  1. Also, companies can’t lose money. And by “can’t” I mean their board of directors is not going to just let them lose money by paying all their workers $7+ more per hour overnight. They will make cuts, just like obamacare. We thought (well not me but I guess obama) that we were getting better healthcare made widely available. What we didn’t see is that companies would cut full-time employees to part time and freeze full-time hiring. They also cut back their health plans to be high-deductible plans in order to save money. As you mentioned the minimum wage increase would be no different.

    At my job some employees could be replaced by automation, however the automation (robots) are too expensive and require a lot of maintenance and so it doesn’t make sense. However, you raise the minimum wage to double and I can tell you without a doubt scheduling hours will be cut down and automation will be used only if absolutely needed. Also benefits would almost definitely be cut, Possibly 401k matching, stock options, etc. So what you get is more pay, but at the cost of it no longer being a place you’d want to work, with hours that would make your pay essentially the same.

    • I think a lot of people saw that hours and workers would be cut. You almost wonder if it was done on purpose since one of the goals of socialist groups is to have a 30 hour work week (with the employee receiving the same paycheck as they do now) so that more people will be employed. The economics don’t work out, but that’s the idea.

      Fast food, however, is screaming out for automation. If employees get really expensive, that expensive technoogy will start to look really cheap. Airlines have already done it.

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