From the time I was young, I watched people ignore the most basic law of economics. This basic law is all around us and it controls a great deal of what happens in the world. It controls who you are friends with, who you are married to, where you live, where you work, what kind of car you drive, and much more.
You, too, are likely ignoring this basic law of economics in some part your life. The employer you work for may be ignoring this basic law. All around you are people, companies, institutions, and more who ignore this law and the result is always the same: instant to gradual failure.
In the employment realm, no union or government structure can ignore this economic rule too long. They can try and may succeed for some time but the rule will always win.
The economic rule I am referring to is this: your rewards will be in direct proportion to the value you provide.
If you’re not providing enough value in your career, the rule will catch up with you sooner or later. Loafing around at work, talking on the phone too much, and not working hard? You will lose your job eventually. Doing work that others can do just as well more cheaply? You will be replaced eventually. Making lots of mistakes that others would not make doing the same work? You will be replaced eventually.
In contrast, if you are providing more value than you receive, you will probably have a very good career. Focused at work all the time when others are screwing off? You will probably find yourself promoted and supervising the loafer eventually. Doing work that very few others can do and providing this work at a good price? You will probably receive a raise eventually. Not making mistakes that others doing the same work would make? You will probably be teaching others how to do good work eventually.
Companies that provide more value than they receive for their products generally end up flourishing and growing. Companies that provide very little value generally end up going out of business.
People who provide a lot of value in relationships generally have lots of relationships and people very close to them. People who do not generally do not.
When I was growing up outside of Detroit I grew up with a lot of kids whose parents were important people and quite wealthy. The kids understood they were quite wealthy and, as a consequence of their parents’ wealth, many of them seemed to believe that certain laws that are applicable to the rest of the world simply did not apply to them.
By the time I was 18 years old or so, the law of economics had already pretty much determined that some of the kids were on a track that was unlikely to ever turn around. It wasn’t just that they didn’t work hard in school. It was that they had no ambition to work hard at anything and didn’t understand the basic economic law. Instead of being experts at providing value, they had become experts in trying to take value without providing any value in return.
When I was young, my father made me do work before he would give me any money. The work could be shoveling snow, mowing a lawn, or something along those lines. If I shoveled snow on a path, my father taught me to look for extra ways to provide value. For example, instead of just shoveling the snow, he taught me to clean the awnings and add value to the job in other little ways. His point to me was that I should do more than I was asked and do a better job than was expected:
”That’s what a Japanese kid would do,” I remember him telling me one time.
Around this time, in the early 1980s, American car companies were under assault from Japanese imports which provided better made cars more cheaply than their American competitors. Not only were the Japanese providing better cars more cheaply, the cars they were building typically had far superior resale values. In fact, by 1984 I would have to say that Japanese cars were so superior to American cars that you would have had to be an idiot to buy an American car if you compared them side-by-side and really were objective about everything. The American car would break down, lose value, and cause all sorts of problems while the Japanese car would be unlikely to do this.
Nevertheless, despite making ”duds” for cars, American car companies chugged along all through the late 1970s and 1980s still making and selling cars to the American public. By the early 1990s, the American car companies were selling cars but they were seeing their ”demographic” of customers increase in age. For example, younger affluent people were buying BMWs and not Cadillacs.
The reason American car companies were able to continue going was because many older buyers were loyal to cars like the Crown Victoria, Cutlas Supreme, and so forth because these cars had once represented something to them. While the laws of economics were gradually whittling away at the American car companies, they were still being supported by social connections they had formed with a base of people in better times. Like the teenager who grows up with wealthy parents believing they will never have to work hard, the American car companies believed that the Japanese did not pose a threat and ignored them for over a decade.
Ultimately, the law of economics grabs onto the people working inside auto companies as well if they aren’t providing enough value. Union jobs working in auto factories paying $30/hour? These jobs are being whittled away. Why would an auto company pay someone $30/hour when they can easily get someone else to do the same work for $12/hour?
All around Los Angeles, there are groups of men who stand on street corners looking for work. In Los Angeles County, you generally don’t need to drive more than five minutes to find a group of these men. The men stand there seven days a week and are always ready to work. Sometimes there are groups of 5 to 10 men but in most instances there are far more. Rain or shine, holiday or no holiday, they are always there ready to work.
These men are an ”economic force” that is pushing wages down and making goods and services in Los Angeles less expensive than they otherwise would be. On another level, they are also enabling the people who hire them to make more money than they would make with more expensive workers.
Since I have always bought ”fixer up houses,” I have hired lots of these men to do various jobs for me for a day or two over the years. When I move from one house to another, I hire them to move stuff. When I do a big project in my yard, I hire them to do the work. I have hired them to do painting and all sorts of various tasks. These men typically work extremely hard and are grateful for the work. I always pay them well compared to most other work out there—at least $15 an hour—and they are always very grateful for the work.
Many contractors in California don’t even keep any workers on staff. Instead, when they have a project, they simply drive to the area where the work is to be done and pick up the men in front of a grocery store, or wherever they gather, and bring them to the job site. If I’m doing any serious work on a property, I always hire a contractor to do the work and, in most cases, the contractor will show up to do the work with the very same workers I have hired from down the street who stand waiting for work in front of the grocery store.
In my 15+ years of hiring these men to assist me with work, not once have I seen, or hired, anyone who was not from Mexico or Central America to do the work. I have never seen (nor have I heard about) any black or white men standing in front of grocery stores, Home Depots, and so forth looking for work.
Does it seem strange to you that in 15+ years I have never seen someone standing in front of a grocery store who wasn’t from Mexico or Central America looking for work? The jobs aren’t bad. For example, most day laborers make at least $10 to $15 an hour, tax free. This is much more money than most young people can make in any sort of other job and they have the choice of who they will work with each day.
I know of men in Los Angeles who were broke without a cent to their names and for whom $100 would be a great deal of money. However, since these men had ”too much pride,’ ‘they never in a million years would consider being a day laborer. Why not? I think it has something to do with their belief that somewhere along the line they determined that this sort of work was beneath then and that they were entitled to make a good living without having to work hard at it.
In Michigan where I grew up, there were no day laborers. I ran an asphalt company there for years and the equivalent of a day laborer in Detroit was a crack addict who is pissed off at society and unreliable. The crack addicts certainly weren’t from Mexico. They were from Detroit or around there and weren’t happy about working at all. They certainly didn’t do a very good job.
I had a very good sense of the types of workers available in Detroit because from the time I was 19 years old, I ran an asphalt company and hired lots of people each year. It would have been a ”blessing” if there were day laborers available but there was no such thing in Detroit.
When I was an asphalt contractor in Detroit, there was a doctor whose home I worked on each summer. Each summer when I saw him, he would come outside and start lobbying me as to why I should become a doctor. Being a doctor seemed like a noble profession and something that would be interesting as well. Typically, before paying me for the work, he would stand with me on the side of the road and lecture me for an hour or so about why I should become a doctor.
The doctor was around 60 years old at the time and practicing at a small hospital in Detroit. He was the head of a large Detroit-area physicians group that recruited doctors and seemed to really take his work quite seriously. One evening, he was talking to me and he said something that astonished me:
”It would be nice to see someone who is not Oriental or Indian become a doctor. I haven’t seen an American-born doctor in years. We used to see Jews becoming doctors but they don’t even come through anymore. It’s impossible to find an American doctor these days—or at least one whose parents were born in this country.”
This statement seemed so outrageous, racist, and so forth that I started to probe. He told me that pretty much all of the new doctors coming through were Indians, Orientals and so forth and that this was just how it is and had been for years. He was even lamenting the fact that no Jews were becoming doctors anymore.
The entire thing seemed unusual to me and his statements really stuck with me over the years—not due to the fact that I wanted to become a doctor but because I wondered if he was pointing out some sort of decline in the work ethic of native-born people in the United States. In fact, I think he was.
It’s really difficult to become a doctor. In fact, even if I had wanted to, I do not think I could have become a doctor. I knew a lot of people who were much smarter than me who wanted to become doctors and didn’t succeed in getting into US medical schools. Instead, they ended up attending medical school in places like the Caribbean. I have even heard of Americans going to Mexico and Ireland for medical school. It’s really hard to become a doctor and requires a lot of concentrated study and discipline. Most people cannot do it even if they want to.
What is the result of working your tail off for seven or so years to become a doctor?
The benefits of becoming a doctor are, in my opinion, very, very good. If you can stomach all of those years of school and training for the most part you avoid the ”rat race” that most people spend their lives on. You have to work hard as a doctor, of course, but if you can make the upfront investment of time and put in the hard work to become a doctor, the results you achieve will be extraordinary.
A doctor has skills that are unlike the skills of a lawyer, average businessman and so forth. A doctor’s skill is a sort of skill that is not depreciated to a massive extent by depressions and economic circumstances—people keep getting sick and seeking out doctors no matter what is going on in the economy.
Looking back years later, out of all the people I went to high school, college, and so forth with who ended up becoming doctors, almost all of them were of Indian and Asian-descent and born outside of the United States. Alternatively, their parents were born outside of the United States. I knew a few others who became doctors and went to foreign medical school. To this day, I cannot recall any non-Jewish or foreign-born people who became doctors. To a lesser extent, I have also seen the same thing with engineers.
I’m sure that I’m going to get all sorts of hate mail calling me a racist, wrong, and so forth for writing this. I’m not saying that people who are not foreign born, Jewish, and so forth don’t become doctors; however, I believe that what the doctor told me and what I witnessed is definitely a trend that is out there. Just because there is a trend doesn’t make the person who sees this trend a race-hater. It just means that I have witnessed a trend.
Why aren’t there more American born day laborers or doctors?
When I was an asphalt contractor, I did lots of asphalt maintenance work for rich people like the doctor I was talking to each year. I can honestly say that getting input and information from these people really gave me a good understanding of how society works. The reason I was able to get so much insight into this is that people on the ”front lines” would fill me in on their observations of society in no uncertain terms. The insight I received was how jobs get filled, how wealth is made, and what people in various professions think of one another.
At the age of 23, I went off to law school and left a girlfriend back in Michigan from a very wealthy family. I was doing very well in my career as an asphalt contractor at that point and had I stuck with it, I am pretty confident I would have had a good career. I will never forget debating with my girlfriend all summer about whether or not I should go to law school. One day she said something I never will forget:
”You have a good job right now. Why would you want to go be someone’s bitch? Have an attorney work for your company—don’t be an attorney.”
Several years later, that statement is still very significant to me because in her world becoming an attorney was a step down. For many people out there, any type of work is a step down. These people are ignorant in most instances of the laws of economics.
In many major cities of the United States—whether it be Los Angeles, Chicago, New York, or otherwise, there are entire buildings where an American couldn’t get a job even if they wanted to. There are professions like jewelry, textiles, and clothing where people who are mostly foreign born are doing all of the work and supervising most of the work.
I know someone who operates a factory in downtown Los Angeles.
”I would never hire an American to work for me,” he tells me. ”They do not work as hard. They have all sorts of ‘entitlement issues’ and think they are owed something. No one I know hires Americans.”
Last weekend, I ran into another person who refuses to hire Americans. This particular guy was in the textile industry in Downtown Los Angeles. I had been reading all of these articles about how the clothing company, American Apparel, had managed to be successful operating in Los Angeles while hiring Americans and not necessarily foreigners.
”They can be successful hiring Americans,” I told him. ”Why not you?”
He told me I was wrong. Some research I did earthed up a recent USA Today article showing that that company had 1,800+ illegal employees in its Downtown Los Angeles factory—or more than one third of its workers. Has this particular guy been successful employing foreigners?
The dynamic that exists in society is that there are simply not a lot of people out there who are willing to do what it takes. It takes a lot to become a doctor and most people are not willing to do what it takes.
You have to be willing to work hard and take a risk with your life and pride to become a day laborer or garment worker. Most people without jobs aren’t willing to do what it takes and would prefer to do nothing. Most people who are smart enough and talented enough to become doctors don’t become doctors because you have to be willing to work incredibly hard to become a doctor.
Most people don’t have the motivation, nor the desire, to do what it takes. If you don’t have the motivation to do what it takes then you are simply not going to be able to get to where you want to go. It’s as simple as that.
Why is it that only people who are outside of American society, or lack a ”complete” connection to it in many respects, are willing to do what it takes? Why is it that the professions like engineering, medicine, and so forth draw so much on people from other countries?
I think the answer is that people from other countries are hungrier and don’t have a sense of entitlement about what the world owes them. They believe that they need to earn their way in order to succeed and they believe that hard work and sacrifice are par for the course and what they need in order to get ahead. In addition, they lack a sense of privilege, rights, and so forth. They feel they need to produce more than they earn. The concept of needing to produce more than you earn is the key to everything.
People with no connection to the ”established social order” have no sense that they are worth more than they produce. They can rely on favoritism, social connections, and more to get jobs and get ahead. Many people are propelled by this connection and used to start their careers and keep their careers powered for some time—but this connection rarely keeps them going forever. The reason the connection doesn’t work forever is because a more powerful force is at work: the power of economics and it is something that will always catch up with anyone.
One of the most important rules of economics is simply that the economy will generally pay for the value that you provide. In order to advance in society, you must respect and understand the law of economics. Economics doesn’t care about your rights, needs, privileges, and social status because ultimately all it cares about is the value that you provide.
You need to stay hungry like the day laborer. Invest in hard work like the doctor and never take your station in your career for granted. You need to give more than you take in and never be afraid to do what it takes.
The law of economics that is always operating in the background is that you always need to give more than you take and be prepared to give. Too many people at some point in their lives lose touch of this law and it always does them in. They relax too long, stop trying, and don’t put in the effort needed to really succeed at their true potential.
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