The formula is simple. Passively attaining any considerable success is virtually impossible. It is Irish sweepstake odds. Too many people do pretty well to attribute it mainly to luck, although luck may play a role. Even counting talent as part of luck, many professions require quite a bit of education, deferred earnings, and training that is almost hazing, as in medicine, where residents pull 36 hour shifts and earn less than $40,000 dollars.
But that is not the most important thing. Although there are some inefficiencies, earnings are largely a matter of economic value to the enterprise. Michael Jordan pulled so much because he was key to so much revenue for his team. Michael Eisner pulls so much because his reputation is such that Disney will suffer a loss in equity value if he leaves, and any company that drew him away would increase in value, long enough to make a difference. In other words, labor constitutes a market, and is hired for whatever it is worth to businesses in economic terms.
We cannot do much to equalize incomes without completely distorting the market in labor, and creating gross inefficiencies in the allocation of resources. We can make an attempt to improve the marketability of some persons through training, but that is rather different, and depends on the effort of the students in profiting from the help. The most we can do is try to establish a minimum baseline that we will not let citizens fall below. Even then, we may establish conditions for the able- bodies and mentally capable, in order to ensure against perverse incentives. The main way of helping people, frankly, is by increasing skills; increasing productivity, and thus the value of even semi- skilled labor; and decreasing the price of goods and services. That is one of the reasons that welfare reform is essential: a lot of people are kept out of the labor market by inadequate fundamental habits, like promptness, and have to learn merely how to get hired and keep from getting fired almost immediately........ |
