Marginal Wage Rates

The link in the title is probably broken, but this idea has been tugging at me for a few weeks and I want to get it down on paper.

The stimulus effect of cutting marginal tax rates is well know.

As a working man, trying to reason my way through the debates over illegal immigration and the effects of lower wages vs ‘more product for the money’, I am struck by something I am experiencing.

My incentive to work is proportional to my wage.

I teach people to fly airplanes. I used to be payed $10.00/flight hour given, but have now signed up to teach at triple that. The result? I am working harder.

So then, if/when my wages are reduced back to ten, I will work less, because on the margin, its not worth it. I become less productive, and flight instruction is just another job American workers just won’t do…..

Like I say, I am just putting this on paper to keep it fresh in my mind. When I get back into Supply Side conversations, I will explore it further.




Posted on April 22, 2008, in economical. Bookmark the permalink. Leave a comment.

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