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.

Cordially,

__s_i_m_p_l_y__t_i_m_o_t_h_y__

Advertisements

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

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: