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Sorry Obama, but nobody deserves “fair pay” just for working hard

Rick Newman
The Exchange
President Barack Obama speaks about raising the minimum wage during a visit to a Costco store in Lanham, Md.,, Wednesday, Jan. 29, 2014. The president is promoting his newly unveiled plans to boost wages for some workers and help Americans save for retirement _ no action from Congress necessary. (AP Photo/Charles Dharapak)

President Obama gets a lot of his ideas from mainstream economists, but on at least one big issue he’s proffering advice that could keep American workers locked in the equivalent of the Stone Age.

“If you work hard, you should be able to pay your rent, buy your groceries, look after your kids,” he Tweeted following his State of the Union address — a speech in which he used the phrase “hard work” five times and referred repeatedly to the right of Americans to have a “fair shot” and earn a “fair wage.”

Americans feel strongly that fairness is important. They also disagree about what fairness is, exactly. A free-market economy, however, makes is very clear what fair pay is — whatever somebody else is willing to offer for your labor. And sometimes, it’s nothing.

The U.S. economy is still in the midst of wrenching change characterized by rapid technological advances that have rendered certain kinds of work obsolete. This has happened before — in the Industrial Revolution, for instance, when millions of workers who made things by hand found machines could suddenly do the work far faster, negating the need for their services. In modern times, we’ve seen dozens of professions — including travel agents, bank tellers, assembly-line workers, even fighter pilots — take a hit from software, robots and other machines that represent the inevitable march of progress.

A very simple point

The point is very simple: Working hard is great, but if you work hard at something nobody is willing to pay for, you’re wasting your time and digging a pathway to poverty. In real life, figuring out what companies or customers are willing to pay for is tricky, because you don’t just have to guess what that might be today or tomorrow. You also have to anticipate how the market for your labor might change, if you want to develop skills that have staying power. With technology changing as fast as it is, even technology experts aren’t sure what will be in vogue five or 10 years from now.

Obama himself is pushing policies meant to help workers gain meaningful skills that will help them earn a decent living, rather than standing by the side of the economy with a shovel and a sign that reads, “Willing to Work Hard.” He has championed the development of two training centers, in Raleigh and Youngstown, Ohio, meant to help blue-collar workers learn trades that will give them entrée to high-tech manufacturing. He’d like to set up many more of those. And he talks repeatedly about “ladders of opportunity” that will help people climb to higher socioeconomic levels, if they have the strength to pull themselves up.

Yet in campaign mode, Obama tends to shortcut to sound bites that make it sound like any kind of hard work is a ticket to self-improvement. One of the clearest lessons of the past 10 years is that Americans need to stop thinking that way. Hard work alone is no longer enough. Employers don’t care how hard you’re willing to work, if you can’t do something they need. In fact, they’d rather have slackers with a flair for social media or cutting-edge programming or sales or whatever will be the next hot business trend, as long as they help feed the bottom line.

Obama has more credibility when he hits the hustings telling Americans what they must do to help themselves, perhaps with an assist from the government. We have instinctive respect for people who work hard, but like half a dollar bill, that might not buy you much these days. Fit that together with the other half of the bill and you’ve got something.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.