Because it's more efficient. If your a software developer, 1 hour of your time could probably buy many hours of time from someone else.
Keep in mind you have to deduct taxes from your income, and the expenses it costs you to earn your income (clothes, transport, bought food, parking, car & maintenance, expensive housing, etc.).
Also keep in mind you must pay others with after-tax dollars. So when you pay that mechanic or plumber $85 per hour, that's a LOT of money, not even similar to you EARNING $85/hr.
I wrote a book about it, and in all my research and calculations, it roughly works out that most people earn only around 30-50% as much as they think they do.. so even if your salary is $120k, you're only earning something like $30/hr at absolute best, which is much lower than you pay a plumber or mechanic.
And if the implied alternative is to be workable for everyone, we have to magic roads, healthcare etc out of nowhere with no tax dollars.
My alternative is only go to work as much as you need to. Food, shelter and some basic enjoyment, not more. That's something like $10-20k per year, at most. Which means you really only need to work 2ish days a week.
> And if the implied alternative is to be workable for everyone, we have to magic roads, healthcare etc out of nowhere with no tax dollars.
Not no tax dollars, but certainly less. It's clear that if everyone only went to work half as much we'd only need to build half the roads and trains and airports.
If every single person went to work only 4/5ths of what they do now. (i.e. 4 days per week instead of 5), The economy would only grow at 4/5ths of what it does now, but otherwise, everything would continue to function more-or-less like it does today. Once you see that, you realize it's also true for 3/5ths or even 2/5ths.
Not only is this not "clear", it's also false. To connect two towns, you need 1 road. If everyone only went to work half as often, you still need 1 road – you can't have 0.5 roads. And if people work half as much, but only 4 hours per day, you wouldn't save anything.
Sure, with less utilization comes less need for maintainance, but not all wear and tear results from direct use.
Of course you can. Half a four-lane road is a two-lane road.
Er, no. First, not all existing road/rail/air trips are for work, and, second, more time out of work would quite likely not merely preserve, but increase, non-work trips.
> If every single person went to work only 4/5ths of what they do now. (i.e. 4 days per week instead of 5), The economy would only grow at 4/5ths of what it does now
That's not at all obvious. The natural naive assumption is that there would be a one-time 20% contraction but after that growth rate would be unaffected; less naively, there's some reason to suspect that the one-time hit would be less, because productiob isn't linear, and the highest value work would be the last displaced.
But, more to the point, the general idea that utility is reduced ybbworkong for trade vs. working for one self is not well supported by evidence.
You are obviously not married.
> Which means you really only need to work 2ish days a week.
And where do you find these unicorn jobs where you work only two days per week?
The entire premise of market economies is that people are better at different things and by working together you get a higher aggregate amount of value. I.e Get more stuff with less resources spent(which includes time)
If it didn't work. Market economies wouldn't work.
Are your perhaps not including the efficiency of the worker in your calculations? Mechanic could probably change the brakes on a car without even thinking about it, you would probably take a hour of research and work grabbing the right replacement before you even start. Most farmers have a large of agricultural knowledge which allows them produce food cheaply in large quantities.
The logical conclusion is to do as much as you can yourself, and only get others to do things you are unable to do yourself. Where possible, don't use the work/income/tax/payment cycle to do it, try to use bartering or something more efficient where there are not so many middle-men taking a cut.
> The entire premise of market economies is that people are better at different things and by working together you get a higher aggregate amount of value
Ah-ha, you're right - but it doesn't create "higher value" for the individual worker.. it's higher value for those at the top of the pyramid.
> If it didn't work. Market economies wouldn't work.
Again, you are right, they don't work! The rich are getting vastly richer while the workers are getting vastly poorer. Look around you.
You might not have noticed, but the reason everyone goes to work every day for their entire lives is NOT because it's the most efficient or smartest thing for them to do. It's because they have been convinced that it is, and they are chasing the carrot dangling on a stick in front of them (house, car, new iPhone, etc.)
>Mechanic could probably change the brakes on a car without even thinking about it, you would probably take a few hours research before you even start.
I can tell you have never tried. Even the first time I did it I took less than an hour (inc research), and actually it would still have been "cheaper" even if it took 8+ hours (I was earning ~$70k as salary, mechanics where I live start at $145/hr)
I've done the calculations, and for me its defiantly more time efficient. I think your picking a particular inefficient example. Mechanics where I live don't earn that much at all.
I could service my car which for me would take me most of my day. My daily pay rate could defiantly pay for a full service after tax.
What i'm seeing here is that you just need to figure out what per hour rate is after tax, and use that to make quick calculations based on your local market.
"they are chasing the carrot dangling on a stick in front of them (house, car, new iPhone, etc.)" - Not everyone is like that. I have a cheap small car, a cheap smartphone, house that requires low maintenance I then plough the savings into services which I means I have more time and less stress. Then the rest goes into retirement funds and cheap vanguard funds.
If anything however its made my life a bit boring but very comfortable and laidback.
Yep, it's a whole chapter in the book I wrote on the topic of working less to live your dreams.
The other thing to realize is that when you are spending money, you are spending the time you have left in your life. You can never, ever get that time back, so spending should be very precious.
It's quite a mind-shift, but once you make it you'll never be able to go back.
I think there's also a social/psychological aspect to this. When people pay for something that they are unable to do/produce by themselves, they feel (or at least should feel, from the society's point of view) some respect for the person doing the job, because he is a specialist with some non-trivial skills. In contrast, when people pay for something that they can do (or at least think that they can) but don't like to, they feel sympathy at best, or superiority and disdain at worst, because the job doer is now perceived more as a servant.
And even if some of my ancestors were rich, my life today as a worker is economically better of by, oh I don't know, a factor of 1000.
If we also take in to account things like decrease in child mortality, clean running water, modern medicine, the internet, Wikipedia, Khan Academy, disposable computers, my life today as a worker is better off by a factor of at least 10,000.[1]
Additionally, despite what Jubal Harshaw might have us believe[2], it is infeasible that any given person should hope to be proficient at a wide variety of tasks.
While I certainly can do most automotive servicing myself, I lack a few specialist tools that would make the tasks efficient and enjoyable, so I outsource some / most if it as I choose.
1. Deirde McCloskey bangs on endlessly about this in her book Bourgeois Dignity: Why Economics Can’t Explain the Modern World https://en.wikipedia.org/wiki/Bourgeois_Dignity
Is it? I see this kind of argument in many places: "I don't have to wash clothes by hand" or "You wouldn't be saying this if you tried picking wheat for 14 hours"
But I think the issue with the argument is they are comparing against the wrong metric. We should be optimizing for human happiness. Innovation is a terrible proxy for this, as we are only marginally more happy than our predecessors in some areas. The main problem with happiness is that it is relatively indifferent to things that are unpleasant (such as picking wheat every day for 14 hours), as our brain quickly adapts and this becomes a new baseline. The things that make us unhappy in the long term (lack of exercise, lack of space, less predictable life, lack of control) are still around for almost everyone, regardless of them being saved menial chores.
As a Registered Armchair Psychologist, I'm not entirely convinced that our brains quickly adapt to unpleasantness. I've heard quite a few soldiers come back from tours of duty with quite the mental health issues, ditto victims of abuse, etc etc.
My argument, and I side with Deirdre McCloskey here, is that we, we in the modern liberal west, and some other developing countries, are better off by far than our peasant ancestors because we have more predictability in and more control over our lives precisely because we have the ability to start our own businesses, to innovate and bring new products to market, to be economically upwardly mobile, to buy better health insurance... shall I go on? Rather than half half our siblings die early from disease and war.
With regard to happiness, well I'll defer to the experts here and side with David Steindl-Rast who claims that in order to be happy on a more frequent / long term basis we ought to cultivate gratefulness[1]. And in that sense I'll agree with you in that, despite adverse conditions, some people do still manage to be happy for what they do have.
The trajectory of the income gap, the rising price of housing, and the erosion of purchasing power, I treat as a separate issue. Moving forward this certainly does look like it's going to rapidly become a problem. Perhaps.
Fyi, bartering is taxable in the USA.[1]
Yes, lots of people barter without reporting "fair market value" of bartered services to the IRS and yes, there isn't a large scale manhunt or crackdown for the tax evaders.
So it's very possible that people think bartering is cheaper because of ignorance of IRS laws. It's still technically "tax evasion". (Similar to how driving across state lines to buy things for 0% sales tax is also technically tax evasion when you don't declare the purchases in your home state's tax forms.)
E.g. A homeowner's lawn service costs $3000 a year. The homeowner could barter his web developer skills to make a "lawn care website" in exchange for 1 year of lawn care. The homeowner is supposed to declare the $3000-fair-market-value as income. If the homeowner is in 30% tax bracket, he owes ~$900 extra taxes PLUS he still has to expend the extra hours writing HTML/javascript to fulfill his side of the trade.
Is bartering that much cheaper if it's not "under the table" and you add in the the extra work+time to satisfy your end of the deal? (Especially if that extra work could be expended on other projects that are worth more than $3000 -or- working on websites more interesting to the homeowner than a lawn care service.)
[1] https://www.irs.gov/publications/p525/ar02.html#en_US_2016_p...
Out of curiosity why would you include food, housing, and transport, etc in your calculation. Those are sunk costs so if the premise is "I'll work 2 extra hours a week" in order to pay someone to 6 hours of cleaning, cooking, etc, then those sunk costs don't really enter into it.
It's seems like what you're really calculating is profit per hour.
Do you have a link to your book?
Because they are all higher as a result of going to work. i.e. if you buy lunch at work everyday for $15, you would only spend $5 if you were at home and ate a sandwich you made yourself.. so the $10 per day difference is a "cost" of going to work. Same for transport (would be $0 without work). Housing is often greatly inflated because of work. i.e. I want to earn the big bucks in Silicon Valley, so I pay $4000/mo rent. Or I just move way out someplace and only spend $1000/mo.. therefore the $3000 difference per month is a "cost" of going to work.
> It's seems like what you're really calculating is profit per hour.
That's an interesting way to say it.... I guess I would say "how much are you really getting ahead for every hour of your life you are selling. (hint: it's massively less than most people think)
> Do you have a link to your book?
"Work Less to Live Your Dreams" http://amzn.to/2vVzpbG
- to re-do a roof would take me ages, while professionals are pretty quick at it
- I might not even be able to do the roof
- Cleaning personal might mean untinterrupted and fully free time at home on the weekend.
- most employees (at least here in the EU) do their 40h and it is not easy to find other deals.
(disclaimer: I own no roof and have no cleaning personal either)
I didn't say any of this would be easy. Nothing rewarding ever is, in my experience.
We do something similar by hiring a house cleaning service that comes in every 2 weeks to do a heavy and thorough cleaning of our house for about $200 / month. That job would use an entire day of the weekend to do ourselves.
It's not every little task, but if there's a market for it there are certainly some areas where you can buy your time back relatively efficiently.
For $380 / month I buy back about 30 hours of my non-working time every month with those two services.
Nonsense. I would work no more nor no fewer hours in a given year regardless of whether I hired a plumber or mechanic. In fact, given that I won't adjust my work hours either way, then hiring people gives me more free time.
I may (or not) have a smaller bank balance, but that appears to be beside the point you're trying to make.
Even with something relatively unskilled like cleaning someone who does it every day is still probably at least twice as fast as I am which makes up for the entire cost of taxes even if my hourly rate is the same as theirs.