Heard on the radio this morning while driving in northern Virginia:
We need policies to bring back the high-paying jobs this country lost since the Reagan years.
I missed the name and affiliation of the particular interviewee who issued this proclamation. Of course, this proclamation is, in one form or another, a familiar one. It trips frequently out of the mouths and off of the keyboards of politicians and pundits too numerous to count. Yet it is economic foolishness.
High-paying jobs of the past were jobs producing goods and services that were unusually scarce. That is, those jobs were high-paying because the goods and services produced by the workers in those jobs were in such short supply relative to demand that consumers willingly paid high prices for those goods and services – and, therefore, firms paid high wages to workers who helped to produce those unusually scarce goods and services. It follows that “policies to bring back the high-paying jobs this country lost since the Reagan years” would be policies to make goods and services more scarce. They would be policies to bring back scarcity lost – the scarcity overcome – since the Reagan years.
Because worker productivity over the past few decades in the United States has continued to rise, and because worker pay (contrary to some claims) has continued to keep pace with this increased productivity, to say that we “need to bring back the high-paying jobs this country lost” is to say that we need to bring back the high levels of scarcity this country has since overcome. It is to say that we need to be made poorer. The policies championed by this radio pundit – policies endorsed to one degree or another by Trump, Clinton, and hordes of other politicians who surf on the waves of public economic ignorance – would make all of us poorer in order to allow some of us to again be paid relatively handsome wages to ease the burden of the relative impoverishment of us all.
Put in yet a third and shorter way: this radio pundit, like too many other people, wrongly supposes that the road to widespread riches is paved with widespread impoverishment.
The above originally appeared at Cafe Hayek.