Opportunity Cost is King

http://en.wikipedia.org/wiki/Opportunity_cost

One of the most important lessons that people, and I mean all people, need to learn is that of opportunity cost.

Opportunity cost is essential the measure of “loss” incurred by making one decision over another.

A simple example is…

It is not worth it to me to work fast food for minimum wage.  Why?  Because I have a law degree and can easily make $150 an hour (I do not have a law degree but you get the point).

Assuming that minimum wage is $8/hr… working fast food would be costing me $142/hr.  I am missing the opportunity to make an additional $142 an hour.  This is opportunity cost.

The power of this really comes in to play when you incorporate other people.

Let’s say 2 people are looking for work.

Ask yourself these questions, With the skills that I have, could I be making more money at another job?  If the answer is yes, then what are you doing?  If there are no jobs available even though you are skilled enough, then the answer is no, you can’t make more money at another job.  How does this relate?  Well, if you can’t get a job because jobs are scarce within the skill sets you have, then you have to take a lesser job.

This is why I hate unions.  If a company can pay employees less for the same job, why shouldn’t they?  Why should a union worker get paid more for a job than someone else who will do it for less?  Where do you think that increased pay to a union worker comes from?  It comes from the consumer… higher prices for products. Unions cost ME MONEY.

Get more skills or take less pay. don’t demand more pay for the same crap that a company can give to the next Joe for less.  Where do these fast food employees get off?

July 15th, 2015 by