There are those of us who view economics as some terribly complicated subject which requires decades to properly master. There are also the first few pages of any Economics 101 text which give us all a working wrench set with which to play with the nuts and bolts of the essential questions.
Take this little story, Walmart is trying to hire some more truck drivers. There aren’t many unemployed truck drivers out there. We’ve also got a low unemployment rate, the lowest in a generation. So, what is Walmart having to do in order to find truck drivers? They’re having to pay higher wages, up to $90,000 a year. No, not an amount to make Warren Buffett blush not even members of the Walmart family but a decent enough sum all the same.
The 8,000 truckers who work for Walmart are getting a raise, with average pay soon approaching $90,000 a year, as the retailing heavyweight looks to hire hundreds more drivers amid an ongoing shortage of truck drivers.
The explanation for this really is in that Econ 101 book, in those first few pages. Sure, we can get a little more complex and use Karl Marx and talk of competition between capitalists, the reserve army of the unemployed and all that. But those first few pages of that introductory book really do explain this. In fact, all we need is this chart:
In fact, it’s all so simple that Business Insider was able to get the whole story into the URL,let alone the headline:
Walmart’s raising truck driver pay because shortage truck drivers. Supply and demand works, Econ 101 aids in explaining that real world out there.
Sure, we need to go further at times. It’s not until we get to public choice that we understand how politicians get rich on the low wages we pay them but still, that simple economics is simple and true.