Paychecks and Self-Worth: An Introduction to Industry and Economics Part I

25 Jul

Last week in “Scripture’s View on Human Value”, we explored what the Bible has to tell us about the worth of each of us as individuals. With this in mind, it might seem reasonable that a society which recognizes this worth would ensure that every individual received an equal share of the wealth.

Unfortunately, as those who have lived and died in communist countries may attest, such generosity is possible only in a society in which every individual is altruistically dedicated to the greater good. In reality, such “equal” distribution tends to promote both corruption and a decrease in productivity. After all, why should I work extra hard so that the person who sits around doing nothing can feed his family? Instead, many nations have opted for the “fair” system known as capitalism: each individual is free to make as much money as is possible provided that they “color within the lines” of the democratically determined laws.

Our goal here, of course, isn’t to debate the relative value of communist/capitalist systems, but to provide an introduction to the free market economy which drives the latter. An understanding of this economy is essential if we’re to comprehend why our pay doesn’t reflect the constitutional principle that “all men are created equal”. Or why our seemingly “upside down” society in which those who appear to do very little often earn more than those who do much may not be so upside down after all.

This understanding begins with the law of supply and demand. Put simply, this law states that the scarcer a resource is, the higher the price it demands. There aren’t a large number of people in our country (or throughout the world, relatively speaking) who are qualified physicians or certified engineers. The result is that the price for those services and the salary of the individuals who provide them is high. There are, however, millions of people capable of hauling carts out of the local Walmart parking lot. Greater availability = lower demand price.

Whether you own a small Mom and Pop store or a publicly traded company, your goal as the business owner is to maximize profit… and one of the ways this is accomplished is through minimizing expenses. But is it fair to minimize expenses by depriving others of a higher wage? We’ll take a closer look at the answer to this question next week. Meanwhile, feel free to share your own thoughts on the law of supply and demand in the comment box below!

 

Paychecks and Self-Worth: The New Testament and Human Value

18 Jul

Last week, in “The Old Testament and Human Value”, we took a brief look at human value in light of creation. This week, we’ll explore several passages from the New Testament and examine human value in light of our re-creation.

In few places do we see our Creator’s love or the value that He places upon humankind as clearly as in the Gospels. John 3:16 declares that, “God so loved the world, that He gave His only begotten Son, that whoever believes in Him shall not perish, but have eternal life.” Throughout His life on earth, Jesus made a career of helping those who could not help themselves. (Mark 2:17) He devoted Himself to healing the blind and lame, curing the lepers, and raising the dead. Through His words and His actions, He made it clear that He did not value human beings as we value each other. And he proved it by His death on the cross.

In Romans 5:6-10 we read, “For while we were still helpless, at the right time Christ died for the ungodly. For one will hardly die for a righteous man; though perhaps for the good man someone would dare even to die. But God demonstrates His own love toward us, in that while we were yet sinners, Christ died for us. Much more then, having now been justified by His blood, we shall be saved from the wrath of God through Him. For if while we were enemies we were reconciled to God through the death of His Son, much more, having been reconciled, we shall be saved by His life.” And Ephesians 2:4-8 tells us that, “God, being rich in mercy, because of His great love with which He loved us, even when we were dead in our transgressions, made us alive together with Christ (by grace you have been saved), and raised us up with Him, and seated us with Him in the heavenly places in Christ Jesus, so that in the ages to come He might show the surpassing riches of His grace in kindness toward us in Christ Jesus. For by grace you have been saved through faith; and that not of yourselves, it is the gift of God; not as a result of works, so that no one may boast.”

In Revelation 5:9 the saints declare, “You were slain, and purchased for God with Your blood men from every tribe and tongue and people and nation.” Race, nationality, social position, education, skill, mental ability, good deeds, and our income level find no place in God’s evaluation of us. His care and concern is not limited by our love for Him or the size of our paycheck. What He has created has value simply because He created it. And that should be enough for us.

But is it? To be honest, despite a firm belief in this Truth, many of us still struggle to define ourselves within the constructs of our society. We may be valuable to God, but that doesn’t mean that we are always seen as valuable to others. Our battle to prove this worth, to fight against injustice (either real or perceived), often takes the form of a fight against society. And in few places is that battle as fierce as in the realm of employee wages!

We’ll take a look at this issue next week, but in the meantime, feel free to share an encouraging Scripture or two in the comment box below.

 

Paychecks and Self-Worth: The Old Testament and Human Worth

11 Jul

Last week in “Determining Society’s Winners and Losers”, we examined the perspective that a person’s worth as an individual is determined by the number of digits in their paycheck. We discussed the role that popular culture plays in perpetuating this view, and we posed the counterview that neither Scriptural nor economic principles lead us to this conclusion. This week, we’ll be taking a look at the first of these as we explore what the Bible has to say about the origins of human value.

Genesis 1:27 tells us that, “God created man in His own image, in the image of God He created him; male and female He created them.” Each of us from the very beginning until the present day bears the mark of God’s image. We are unique among all His creations in that He has given us not merely intellect, but a soul. “The LORD God formed man of dust from the ground, and breathed into his nostrils the breath of life; and man became a living being.” (Genesis 2:7)

That God intended for this image to be guarded is evident. In Genesis 9, verse 6, He commands that, “Whoever sheds man’s blood, by man his blood shall be shed, for in the image of God He made man.” There are no caveats which exclude those of a certain race or creed. There is no exception made for age or infirmity. And none are excluded on the basis of wealth or poverty, education, skill, or their potential as contributing members of society. Humans, all humans, have value simply because they are the handiwork of their Maker.

More importantly, this handiwork is not and never will be an accident. In Jeremiah 1:5, the Lord declares to the prophet, “Before I formed you in the womb I knew you.” And in Psalm 139:13-16 we read, “For You formed my inward parts; You wove me in my mother’s womb. I will give thanks to You, for I am fearfully and wonderfully made; Wonderful are Your works, and my soul knows it very well. My frame was not hidden from You, when I was made in secret, and skillfully wrought in the depths of the earth; Your eyes have seen my unformed substance; And in Your book were all written the days that were ordained for me, when as yet there was not one of them.”

While our parents may not have planned for our advent, our Creator did. He knew exactly when and where we would be born, how we would live, and who we would become. While He didn’t create us with equal abilities or equal opportunities, we can be assured that each of us were created with equal care. Each of us has value in the eyes of God. And for that reason, alone, we ought to value each other.

Paychecks and Self-Worth: Determining Society’s Winners and Losers

4 Jul

A wise man once told me that, “No one will ever pay you what you’re worth. So find something you enjoy and do it.” It’s sound advice – especially in a world where so many of us mistakenly confuse our worth as human beings with our worth as units of labor. Indeed, for far too many, the greatest workplace struggle isn’t conflict between ourselves and our coworkers, getting along with a difficult boss, or adjusting to long work hours. Instead, it’s overcoming the sense that our value as individuals is somehow tied to the number of digits on our paycheck.

This isn’t surprising, since popular culture all too frequently perpetuates this confusion, labeling individuals as “winners” or “losers” based upon income and lifestyle. The winners are those who have demonstrated initiative by getting an education, making good money, and living a lifestyle of comfort and luxury. They are those who contribute to the economic and material prosperity of our society. The losers, on the other hand, are the undereducated and the underpaid – those who provide, at best, only a limited financial benefit and serve to consume that which is produced by others.

This message that individuals can be labeled as either “winners” or “losers” based upon their annual pay begins to penetrate our psyche sometime in grade school; If you want to be “worth something” as an individual, you need to be a contributor. To be a contributor, you need to make money. And to make money, you need an education.

The National Center for Education Statistics tells us that, on average, a 25-34 year old who is employed full-time can expect to earn $45,000 a year… provided they possess a coveted Bachelor’s degree. Those with High School degrees, however, are unlikely to earn much beyond $23,000. Because higher wages equal a greater contribution to the economic well-being of the country, higher education is encouraged. Those who don’t pursue a degree often feel demeaned by those who did. After all, they’re merely a drain on the resources made available by these “benevolent” producers.

Sadly, those who subscribe to the perspective that income determines society’s winners and losers demonstrate a dangerous lack of understanding. Why dangerous? Because it has the ability to influence workplace attitudes – stirring up dissatisfaction and malcontent where, in reality, there ought to be gratification and fulfillment. Fortunately, this “winner-loser” scenario is deeply at odds with both the teaching of Scripture and basic economic principles… and we’ll be taking a look at both in the coming weeks.

It’s All About Our Choices

27 Jun

As I neared the end of my budgeting exercise, I began to panic. It was clear that I hadn’t been putting enough thought into the practical matters of life (like saving for the day when my ancient truck finally gives up the ghost). But it was also clear that saving for those eventualities left me with far less to spend on the things in life that I enjoyed. How exactly was I supposed to make the most of my free time if I didn’t have a couple hundred dollars to spend on books each month? And what would life be like without Starbucks? It was clear that more than just my budget was going to require a “makeover”.

While I acknowledged my relative wealth with my mouth (and with regular charitable giving), it was clear that the message had yet to reach my heart. I had enough, but I felt like I was impoverished. I had failed to recognize that the wise handling of money (just like everything else in life) is about our choices. Dave may have recommended that I dedicate a certain percentage of my income to retirement… but doing so was a choice that I would have to make. Dave suggested that I consider spending less on food, but the decision was mine. With each dollar I allocated, I was making a choice between living with a sense that money controls me or that I control the money. The former brings a sense of slavery. The latter, an undeniable freedom.

Drawing a deep breath, I looked through my budget again – this time with an eye towards practicality and an intense focus upon the two categories to which my impulse spending was most frequently directed. Truthfully, there was nothing that prevented me from making coffee at home. Doing so would reduce my food expenditures by 50% and I could reduce that spending even more if I really tried. Likewise, I rarely had the time to read all of the books that I purchased. With the skill of a surgeon, I cut my budget to reflect the purchase of a mere two volumes a month. (If I needed more reading material, it was rumored that there was a nifty place in town called a “library” where I could go pick out books and take them home… absolutely free!)

I took Dave’s advice and put together envelopes for both of these impulse categories. With cash in each, I would be able to regulate my spending in ways that were nearly impossible when I used my “charge-it-to-the-credit-card-and-pay-it-off-at-the-end-of-the-month” method. Then, I gave the new method a try at the brand new health food store.

List in hand, budget in mine, I cruised the aisles admiring all of the delightful product offerings. I carefully examined my options for each item on my “needs” list and selected the most financially responsible products. Then, each time I picked up something that wasn’t on my list I asked myself, “Do I want to remove cash from my miscellaneous food envelope to pay for this?” One item after another went back onto the shelf, ear-marked for another day. I left the store having spent a mere pittance compared to the previous month… and each “treat” I purchased tasted twice as sweet!

More importantly, I’d finally gotten around to taking responsibility for the money God had entrusted me with. I was no longer a victim held captive by a low salary, government policies, or societal expectations. Instead, I was a steward who could account for each dollar entrusted to them. I was free.

Paychecks and Planning Part II

20 Jun

My first encounter with the type of planning that goes into an effective budget was through Dave Ramsey. I came across his Financial Peace University in search of some help for a friend who didn’t handle money as well as I did. I was soon to learn that there is a distinct difference between handling money “better” than your friends and handling it “well”.

While Dave is well-known for his emphasis on getting people out of debt, it turns out that he also had quite a bit to say to “victims” like myself – trapped in a cycle of living paycheck to paycheck. His message began with a lesson on the importance of “cash flow planning”. This was, essentially, the same budgeting technique that my mother had attempted (unsuccessfully) to teach me years before. The difference was that I wasn’t to figure out an entire year’s budget all at once.

Instead, Dave’s budget involved monthly planning in which I was to write my income at the top of a page, then progressively deduct my expenses. Once I’d finished listing everything I had to buy like insurance, fuel, food, and clothes, I began allocating the remainder of my paycheck to other categories until the total amount deducted equaled the amount of my paycheck. (Dave calls this a “zero-based budget” and he offers a great budgeting tool online at: http://www.daveramsey.com/tools/budget-lite/ if you’d like to try this for yourself.)

Each category received its own, separate envelope into which I placed cash. In a sense, each envelope was a tiny savings account designed to ensure that I didn’t have any more unplanned “emergencies”. (I will forever recall the blissful feeling I got the first time I was sick and opened my wallet to discover that the “medical” envelope was stuffed with more than enough bills to cover the cost of my medicine. It was as though I’d discovered that people do get sick… and that it was something that could be planned for!)

This sense of satisfaction, however, lay months into my future. As I looked over the figures for my previous three months spending, I began to panic. After allocating most of my paycheck to necessities either immediate or anticipated, I had very little left. Moreover, my records made it clear that my belief that I wasn’t an impulse buyer was not supported by the facts. No, I didn’t grab candy bars at check registers or make instantaneous decisions to purchase “discount” goods at the local retailers, but I did have two particularly weak categories: food and books. And these two categories consumed such large quantities of my income that it was no wonder I found myself scrambling for cash each time I had to make an automotive repair. I had a problem and something needed to be done… immediately. (To be continued…)

Paychecks and Planning Part I

13 Jun

I wasn’t very old when my mother began teaching me the art of budgeting and, thanks to her training, it wasn’t long before I was allocating dollars like I knew what I was doing. (“Like” being the operative word.) Each year, I sat down with a list of the previous year’s expenses and made a curiously inaccurate guess as to what I might spend in the coming year. I divided that figure by twelve and voila, I had a budget! (In retrospect, I think I may have taken away very little of what my mother was attempting to teach… but then numbers never really were my thing.)

I quickly grew quite skilled at this practice which I rather dubiously labeled: “financial planning.” I was great at categorizing expenditures and moderately efficient when it came to recording receipts. In theory, each pay check was parceled out with portions allocated to gas and groceries, medical expenses and movie tickets. There were pigeon holes for nearly everything and I was quite adept at creating new ones whenever the need arose.

Reality, however, was a little different. I lived within my means, but I had a bad habit of “fudging” on my budget. I was paid hourly and that meant that the amount of my paycheck was inconsistent from one pay period to the next. My spending mirrored that inconsistency.

To be honest, aside from a few monthly bills for necessities like insurance, I couldn’t tell anyone where the rest of my money was going. I kept a running tally of how much I made vs. how much I’d spent and made purchasing decisions based upon that figure. If there wasn’t enough money, I didn’t spend. If there was, I spent without discretion. The result was that, despite my not-so-carefully planned budget, I usually felt a bit tense when it came to my finances. There was always one more unexpected automotive repair to be made or another doctor’s visit to cover. I was staying out of debt, but I also seemed to be teetering precariously close to the edge of a personal fiscal cliff.

The solution to my problem seemed like a no-brainer: I simply needed to find better employment. A more demanding job at higher pay would resolve the ongoing “crisis” of paycheck to paycheck living. So I began my search.

It wasn’t long before I’d found what I was looking for and not much longer than that before I discovered that I still wasn’t making “enough”. Clearly, the obvious solution to my problem had not been the correct one. It was time to pull out the big guns and place the blame where it belonged: on the government, on society, on the fact that I was a woman, on the price of gasoline… on just about anyone or anything except myself. I had become a victim.

The truth is that I’ve always been more of a visionary than a planner. I think in broad swaths of color, not in the intimate details of individual threads. Yet it’s those details that make the difference between financial chaos and effective money management. My income was sufficient to meet my needs at each of my places of employment. I just wasn’t handling it efficiently. In order to do so, I had to acquaint myself with an ancient art with which I claimed only marginal familiarity: planning. And learning the art would prove to be a challenge. (To be continued…)

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