Nothing we do comes without a consequence. Understanding this is one of the keys to understanding the way the world works.
Here’s a transcript of our conversation:
Brittany: Hi, Emma.
Emma: Hi, Brittany.
Brittany: So, I think one of the biggest problems I see in our world today, and of course, we talk about the way the world works. So this is important, is that too many people, they don’t understand what cause and effect is. And I especially worry that we’re not teaching kids this anymore. So just a brief, you know, explanation cause and effect is this principle that when you do something, something else happens as a result, which is kind of like, oh my goodness, I’m gonna botch this. Newton’s, what is it, third law? Is it his third law? Oh yeah. Where when you do something, there’s like an equal. Yeah. Every reaction has an equal and opposite reaction. That’s the one equal or opposite, equal or opposite. So think of cause and effect that way that isn’t just, you know, for science, it’s what we do. If we do something, something’s gonna happen. So for example, if I push over a glass of milk, it’s going to spill and then I’ll have to clean it up or somebody will have to clean it up. Hopefully, you will take responsibility and clean up your own spilled milk. But who knows? And if I go to bed later than I should, I’ll probably wake up more tired than I usually am. So these seem, you know, pretty obvious when we do something, it always has what we call consequences. But this gets ignored literally all the time. People, and of course, especially politicians, cuz we know that they’re not always the smartest. They pretend that they can just do things without consequences or they flat-out ignore the consequences and assume something is just gonna work because it’s what they believe in. So this is so silly when you think about it cuz you can’t ignore something like cause and effect unless you live in a world without gravity. For example, let’s think about the cup of milk, right? Unless, and you guys probably haven’t seen the matrix, but, the matrix, like they can like to float through our, I’m not gonna try to explain it. So, let’s just say there’s no gravity. So if you like to flip over a cup of milk or there’s no, you know, then the laws of physics don’t exist, then the milk will maybe not spill over. But we don’t live in that world, right? There are, objective truths as you and I have talked about before. So if we spill that milk, it is or tip that milk, it’s going to spill. This is just what happens. And we see this plant in more damaging ways than just, you know, spilling milk. So in fact, the government really loves to protect or pretend that consequences just don’t exist. And I thought today, Emma, you and I can go over a couple of these examples. Yeah. So let’s start with one that’s important to me and that’s minimum wage. That’s a big thing right now. So you see a lot of people saying, fight for 15, let’s raise the minimum wage up to $15 an hour. Now to put this in perspective, when I was entering the workforce, which I’m gonna date myself here, I always say at least I’m not as old as Connor, but I’m actually almost as old as Connor. So I can’t tease him anymore. So when I was 16, it was 2002. And at that time, minimum wage was like 7.50 or 8$. Now a lot of cities and states cuz cities have a little bit of their own power too. I think Seattle. Yeah. Did their own Portland. Like Portland, yeah. Both basically the same city. If you look at the politics, but it’s $15 an hour now. So let’s think about that. That was a long time ago. I realize that was 20 years ago, which pains me to say, but that’s a 50% increase. That’s a lot. So, the reasons people want to raise the minimum wage are noble, they’re good. So there are people who just, they, they don’t want people to be poor, right? They want them to have more money. And there’s nothing wrong with wishing that. The problem is when people ignore the consequences, the, you know, the cause and effect of what that means. So these people are like, you know what, let’s raise minimum wage to $15. That’s great, right? But where does that, where does that increase come from? Because the government, well the government shouldn’t pay that anyway because that’s just coming from us. But when they make these laws, the companies have to do that, right? The companies have to pay. So let’s use a fast food. I’m just gonna say McDonald’s. Yeah, but I don’t think this is, actually what’s happening, but let’s pretend. So McDonald’s raises their minimum wage to $15 an hour. I don’t know, Emma, do you know what it is now? Generally speaking, the national.
Emma: It’s gosh, I don’t know. Because this labor shortage has led to actually a huge increase in wages for Yeah, typically minimum wage jobs. So I don’t know. Yeah.
Brittany: Which we’ll talk about. So, okay, so the minimum wage, they raise it to 15. Well, now that money has to come from somewhere. Okay? So now McDonald’s has to either raise the prices on their food, which remember they’re already doing because of supply chain issues. Emma and I talked about that before. So there’s already other factors raising the price of the goods and services you and I buy. So maybe they have to raise the prices of the food, right? And then consumers are going to lose out on that money cuz now they’re paying more or we’re still, they’re going to have to fire certain employees because they can’t afford to keep everybody on. People assume that businesses are rich and greedy, but they’re operating on a budget too. And that’s how they’re able to make money. Now McDonald’s is a bigger company, but let’s think about maybe a mom-and-pop store just, you know, a standalone restaurant. They can’t afford to do that. So while this seems like a good idea, let’s look at the cause and effect. If you force a company, especially a smaller company, to pay their people more than cut like prices are gonna go up and people are gonna lose their job. But politicians, it’s funny to me and e even an economist, they just ignore this and they think, yeah, no, no, no, but we need to pay people more. So you know what? Like this is the right thing to do and they completely ignore the cause and effect. So maybe if they were taught better in school or maybe like, I think the part that scares me the most Emma, is what if they’re just ignoring cause and effect?
Emma: Yeah, I think that’s what’s happening a lot of the time. And I actually have encountered this personally. One of my first jobs, I worked at a coffee shop in Oregon, which, you know, Oregon has its own weird minimum wage stuff. They’re always testing out these crazy ideas.
Brittany: Portland lives.
Emma: Yeah, exactly. So I got to really experience this. I was 16, I worked at a coffee shop and part of my job was helping hire people and train them. And Oregon implemented this $15 minimum wage. And I think it was, they did like a slow incremental thing from like 12 to 15. And as soon as that happened we had to do two things. First, we raised all of our prices on our drinks by 25 cents. Which doesn’t seem that’s a lot. Yeah, it doesn’t seem like a lot. But we had folks that would come through every day and some of them would pay with like exact change cuz they knew what their drink cost every day they would come in and they would pay and they had to pay more every single day and they were really unhappy about it. And then also we had to put a hiring freeze for a little bit and we had to stop hiring and try to figure out ways that we could, you know, navigate it. Because it’s not like these businesses just have endless supplies of money. Nope. And especially if they raise prices, you might actually lose some customers over that. So that was an interesting lesson to learn right off the bat. And it kind of reminds me about what happened with this unemployment being raised and increased so much over the quarantine or the lockdowns even. The government, the federal government really increased the amount of money that people would receive if they were not working. And it’s, it’s had some really bad effects on the labor economy because now there are a lot of places where not working and just getting unemployment pays more than a job. Yep. And I have a friend again in the same, you know, a small town I grew up in outside of Portland and she has a little deli bagel shop type thing and it’s a small town. There aren’t a lot of people there and it’s already kind of tough to find employees, like steady employees in that small of an area, but it’s gotten even tougher because the unemployment pays more and she’s actually had people leave and say, I could get paid more to not work here. Which is crazy. It’s so crazy. And then people get upset cuz they’re like, why is my food taking so long? Yep. And you know, it’s just another example of when the government tries to test out these wacky ideas without actually thinking through the cause and effect. You know, we’re gonna learn really quickly what the effects are gonna be and we’re gonna experience that even in our daily lives. So it’s, there’s endless examples of this.
Brittany: You’re absolutely right. And what’s funny to me about what you mentioned too is everywhere in DC I don’t know about where you live, but I’m seeing help wanted, especially outside of restaurants cuz a lot of people, you know, stopped working at restaurants when things close down and they can’t fill. This is like the first time where we have so many open jobs that people just won’t fill. Yeah. And that is really, really scary to me because you just gotta wonder, like usually it’s, oh we, you know, we have high unemployment, we need jobs, but now we have jobs and no one to fill them. So on that note, cause all these kind of tied together and we’re talking specifically about the economy on this episode, not, just right now, like there’s so many other reasons, but. So, one thing that I think of is during the pandemic, the, you know, the economy was forced to shut down. What I mean by that is, you know, theaters had to close and restaurants had to close because of government mandates, not because they wanted to. Now if a restaurant or a theater would ever wanted to close, I think that would’ve been fine if that was their personal choice. But they didn’t have a choice. Right? We went on lockdown and we went on lockdown very quickly, so people couldn’t really prepare for it. I remember getting my hair cut for the first time after the quarantine had lifted a little bit was like the best thing ever because you don’t realize these little things like that you miss out on. Yeah. But what’s funny to me is now we’re having supply chain issues. Now we’re the economy is not doing super great, but the government doesn’t say like, oops, you know, maybe we shouldn’t have shut down everything. Oops. Maybe we should have let you know, businesses decide if they wanted to do that. So it’s this cause and effect again where they completely shut down the economy and didn’t think through that maybe this was gonna have really negative consequences. Yeah. For the not just a business cuz a lot of businesses weren’t able to reopen. Yeah. But now the entire economy is struggling. So it’s really scary to me when these cause infected, you know, Emma and I are sitting here talking about it and we can understand, but yeah. The government and economists can’t.
Emma: No. And yeah, and you talk about the lockdowns too. Another personal example that I saw. So I used to live in the Arlington DC area where Brittany you are. And in Clarendon, area there was a dry cleaner that Cabot and I, my husband, and I would take our clothes to, and she was telling us about how all of these businesses in her area, it’s a lot of like big offices and software companies and stuff like that. And a lot of those companies, as soon as the lockdown started, just went remote. And a lot of people were like, well this is great. People can just work remotely. They’re still employed, they still have jobs. But what happens to all of the small businesses in that area that rely on people being in the office and rely on people coming into work when you just pull the rug out from under them and suddenly shut down the economy? What do you know, people aren’t bringing in their dry cleaning? People aren’t picking up coffee in the morning or they aren’t getting lunch at these little small pizza shops and stuff at lunchtime. And you know, obviously, there are market consequences and market corrections sometimes when demand goes down. But that should be something that happens naturally from consumers changing their minds. And it should be a gradual slow thing so that people can adjust. But when the government just comes in and does it on behalf of the entire economy, it’s so wrong because all of those people just lost their livelihoods. Their business goes way down. It makes it way harder for them to stay alive. And even then too, her name was Jen. She was complaining to me and I think rightfully so about how the government was picking and choosing who got these bailouts. And she’s like, American Airlines gets billions of dollars, but I only get, you know, these little crumbs in comparison. And it’s pretty crazy to me that the government just did that out of nowhere with absolutely zero regard for what would happen. And I mean, it’s not even like, it’s just the economy either. Like this happens with foreign wars, we go get involved overseas in other countries affairs and what do you know? It causes blowback. It causes, people in other countries to hate America. And it’s not like I’m saying they have every reason to hate America, but it’s a lack of thinking through the consequences of our actions. And America’s a very powerful country. The things that we choose to do are very meaningful and have a lot of ripple effects and side effects. So, yeah, it’s, there’s a real lack of thinking through cause and effect, not just on a personal level but all the way up to the government. And it’s scary because the things that we do as a country are very powerful.
Brittany: I think you’re absolutely right. And I think, you know, we could talk about this all day long, but I think, I think we can end it here. So Emma, do you have any closing thoughts?
Emma: Nope. Think through cause and effect, guys. That’s what we’ll leave you guys with and maybe try to think of some ways that you can identify, a government not thinking through cause and effect in your life. And let us know if you think of any, cuz we would be very curious to hear about it. But we’ll wrap it up there guys. Thank you.
Brittany: Thank you.