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Is working harder making us poorer?

I bet you that most of the people reading this blog are full-time employees, working no less than 8 hours a day.

In the first blog, I mentioned that above all assets, time is the most valuable. Thus, it should be spent wisely and effectively. You may be satisfied with your working conditions and your salary. However, if you view this scenario from a broader perspective, you will realize that you are contributing to the market and the economy. This means that the more hours you put into work, increases the economic output right? Wrong! The economic output of a nation is measured by its GDP. It does not look at how many hours were put into the making of goods, it just calculates the price of the final goods or services produced. A machine could work 24/7 and make a product faster than the average factory worker. These machines are now everywhere, and they have brought us where we are today. If we relied on human workers to produce goods and services, we would be far from efficient in our tasks.

So, if we have left efficiency and monotonous work to robots, what do we really get paid for? 

What do we get paid for? 

We don’t get paid for how long or hard we work, instead, we get paid according to how hard it is to replace us. As an employee, your working hours depend on the value you provide to the market, not your working hours. No matter how further you look into the future, the working hours for employees will be more or less the same. Even those unexpected calls from work during weekends will never stop due to the growing demand. Human desires are unlimited; we would always ask for faster shipping, better services, faster travel and much more. 

What are we doing wrong?

The problem lies in working for the wrong cause.

A hard-working laborer who spends 8 hours a day pushing leads into pencils, isn’t contributing much to the market. Due to his poor skillset, he will be easily replaced by a machine no matter how hard he works.

As you know, the more you contribute, the more you receive. This is exactly why a lot of factory workers are getting poorer as we move into the near future. 

The welfare issue:

Many low-income workers pay for their expenses with the help of welfare benefits. However, as an employee’s financial situation gradually improves, he/she gets a promotion or pay raise. So, if the employee even earns a dollar more than the required amount, the welfare will cut all of the given income. This is a huge problem because if the employee earns $1300 a month from the job, the deductions will bring down the income below $1000. As a result, the expenses previously paid by the welfare service will now have to be paid by the employee. On top of all of this, workers also have to deal with rising prices.

According to latimes.com:

“Rising commodity costs are forcing Americans to pay more for items including meat and gasoline. Prices for corn, grain and soybeans are at their highest levels since 2012. The price of lumber to build homes is at an all-time high. More expensive commodities, such as polyethylene and wood pulp, have translated into higher consumer prices for toilet paper, diapers and most products sold in plastic containers.”

The Rat Race

We are always reminded to save a certain percentage of our earnings to live a better future. Unfortunately, some individuals live on such a financial edge, that they have to rely on their next paycheck in order to fulfill their basic needs. These are zero net worth individuals, whose production equals their consumption. Now you must be thinking that this is just all about management. It’s all about how you manage your wealth. But keep in mind that there are other factors involved as well.

From low-income workers affected by welfare, to wealthy people who have lost it all! Take Mike Tyson for example, who earned $300 million dollars over the span of his whole career. Yet, the same man filed for bankruptcy with $23 million dollars in debt. 

Conclusion: 

There are many problems constantly attacking people. All we have to do is find a solution and move on. 

If you want to learn more about the race, make sure to read: Out of the Rat Race : The Quest for Financial Freedom

 

Is working harder making us poor?

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