Friday, March 14, 2014

How To Succeed in Business

A couple of days ago, I quoted one of my favorite economists in a Facebook status thusly:

“Avoiding long-term poverty is not rocket science. First, graduate from
high school. Second, get married before you have children, and stay
married. Third, work at any kind of job, even one that starts out paying
the minimum wage. And, finally, avoid engaging in criminal behavior.”

My very bright but contrarian son responded with this:

“I thought the reason we graduated from high school, and then college was so we wouldn’t have to work a minimum wage job.”

A few comments are in order.

When the great Walter E. Williams made these comments he was responding to how confounding long-term poverty has been to big government liberal proscriptions. When confronted with the largely ineffective “war on poverty” track record, liberals always retreat to the explanation of how complicated the problem is and therefore extraordinarily difficult to fix. Mr. Williams simply looks at the poverty statistics and identifies the most common traits of poor people and works the problems backward to great effect. Take me for example.

Thirty-one years ago I took a job with Life of Virginia as an insurance salesman. They agreed to pay me a salary of $350 a week. Every three months I had to produce an increasing percentage of this amount or I would be unceremoniously canned. In exchange for this $350, I was expected to labor a minimum of 60 hours a week. Back in those days, the only way to get appointments was to endure marathon cold calling phone sessions. Because this was 1981, no one had answering machines, so you could only reach people at night. The numbers were always the same…100 dials, get 35 people on the phone, set one appointment. Needless to say, this was brutal, gut-wrenching work. You try getting hung up on and cursed out for three hours a night!

Now, if I divide my salary by the number of hours I worked every week, I come up with an hourly wage of $5.83. Allowing for inflation, it was a bit higher than minimum wage, but not by much. Why would a recently college educated young man agree to such an arrangement? Well, I had just gotten laid off by a company that went bankrupt because of malfeasance by the owners, a company that owed me over $5000 at the time. The fact was that I was desperate for a job. It never occurred to me to lie around my apartment collecting unemployment for 99 weeks. The degrading experience of applying for it had so traumatized me that after I received my first and only unemployment check, I swore that I would dig ditches before I ever cashed another one. But that’s just me.

The moral of this story is that, the worst job I ever had at Life of Virginia morphed into a career in the investment business that has propelled me into becoming a business-owning member of the evil 1%. (actually, more like evil 2%, but who’s counting?) This happy story, along with the fact that I got married and stayed married, had my kids after the ceremony instead of before, and have largely avoided criminal activity has helped me to be able to pay cash for my contrarian son’s college education, proving Mr. Williams right.

One more thing, Mr. Williams’ advice is how to avoid long term poverty, not necessarily how to get rich. This is not a distinction without a difference. Still, any list of successful people who started their working life working for minimum wage would fill a pretty large book. Besides, a job that “starts” at minimum wage doesn’t necessarily stay there. Take the trash out at McDonalds and they’ll pay you $7.25 an hour. Show up on time every day and smile when you take out the trash and they’ll bump it to $8. You can’t get ahead in this country by demand or by fiat, only by performance. You want to make more than the minimum wage? Make yourself more valuable to the marketplace.
It really isn’t rocket science.