#110 Going Back to the Office

By D. Arnott | January 28, 2022
the christian economist dave arnott

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#110 Going Back to the Office

Going back to the office after the pandemics exemplifies the flexibility of both Christianity and economics.  

The US labor market is going through an epic change in supply and demand, as we exit the Covid pandemic.  Each industry, and firm, is making the decision about whether to continue remote work, or bring labor back to the workplace.  The labor-management relationship will never be the same.  It will be better in many ways, because the market is flexible in allowing supply to meet demand.  Christianity is flexible also.

Christianity is flexible

When I taught at a Christian College in Eastern Europe, the provost related a story about Orthodox Christian students who came to his office to complain that a professor prayed in class.  That’s because in Orthodox Christianity, only priests can pray.  In Baptist belief, we are at the other end of the spectrum, where we use the phrase, “The priesthood of the believer.”  

Catholics have seven sacraments, while Protestants usually have two.  The Orthodox- Catholic split was called the Great Schism of 1054.  Then, Martin Luther, along with John Calvin, and Ulrich Zwingli, all contributed to the Protestant reformation in 1517.  There are lots of details that I’m skipping over, because I’m making one clear point in this section of the podcast: Christianity has flexed to meet the demands of age, region, geography, culture, and time.  In Baptist circles, we even joke about splitting churches, explaining that it’s our growth plan. 

In my little book Economics and the Christian Worldview, I make the point that about 2.2 billion of the world’s 7.7 billion people are Christians because of the flexibility of our religion.  

Institutions will come and go, but God’s word will not change.  Ginger and I visited the church of a family member just yesterday, where their culture was somewhat different from ours.  They had a quite professional band, with lights, stage fog, multiple videos, and a lead pastor that sent in the sermon that was video-recorded.  As we drove away, I mentioned to Ginger, “I don’t care how they dress it up, as long as they invite us to accept Jesus Christ as our personal savior.”  And, they did, in both the recorded message and the live presentation.  You see, the core message of Jesus flexibly adapts to multiple venues and situations.  Labor is flexible also. 

Labor is Flexible

In a lecture at Dallas Baptist University, I point out that Abraham went from Ur of the Chaldeans to the Land of milk and honey.  Perhaps that is the first recorded movement of labor for the purpose of increasing productivity.  He moved to BETTER land, which was not only God-ordained, but it was better for Abraham and his descendants also.  That’s always the case, isn’t it?  Labor moves to where it is demanded.  

I tell students that if they have a job offer of $50,000 in Dallas and $70,000 in Kansas City, they should take the Kansas City job.  

So many people outside economics miss this very critical integration of Christianity and Economics.  By taking the $70,000 job, the student is agreeing that she should create more value for her neighbors.  People outside the economics discipline see it as selfish that the graduate takes the $70 grand for herself.  In Christian economics, we understand that she will show more love for her neighbors by producing the extra $20,000 in value.  

Remote vs Office Work

Lots is being writing about the movement back to the office after the pandemic, but I will cite only one very good article from the Epoch Times titled, Companies offering remote work thrive amid labor shortage, by Rachel Hartman, December 19, 2021

Ms Hartman writes, “Companies that operate virtually and allow their employees to work remotely are, in a word, thriving.”

Citing a pretty typical economic freedom concept, she continues, “One of the advantages for companies that shift to remote roles lies in the expansion of the talent pool. Rather than relying on local geographical limits, firms can case a wide net, spanning counties and beyond.”

Aha!  In other words, greater supply produces more labor choices, and the firm benefits.  

She concludes, “Employees cite better balance as a key benefit, stating their work/life harmony has been improved by remote working, leading to better wellbeing.”

 

State to State

For years now, people have been moving from California to Texas.  A joint report by the University of Texas at Austin and Stanford University informs us that 50,000 people were moving every year, BEFORE the pandemic.  People are escaping the high tax and high regulation environment of California.  The regulations were increased even greater during the pandemic.  The Real Estate Research center at Texas A&M states that one of every ten people moving to Texas are from California.  California lost two US congressional seats in the 2020 census, and Texas gained two.  Just like Abraham moving to the land of milk and honey, Californians are escaping.  And, since I used that term, I will relate another anecdote.  Ginger and I were on the way to a dinner at DBU and introduced ourselves to a father and son who were on campus for student orientation.  When they said they were from California, Ginger quipped, “So you’re escaping?”  And when the father mentioned “Northern California,” then Ginger correctly stated, “So, you’re REALLY escaping?!”  The father agreed.  Think about it: How many really wonderful Universities are there in Northern California: Cal-Berkeley, Stanford, and many others.  This father brought his son halfway across the country to attend Dallas Baptist University, because he wanted a Christian, conservative, values-based education for his son. 

Economists know Arthur Laffer as the inventor of the Laffer Curve, showing that as taxes increase, at some point the Treasury gets less revenue, not more.  That was proven true during the Trump tax cut of 2017.  When taxes were reduced, revenue to the Treasury went up.  In class, I often refer to the Laffer Effect in terms of the book Atlas Shrugged by Ayn Rand.  I tell the students that if I taxed grades from high-producing students and redistributed them to low-producing students, at some point, the high producers would “shrug” and switch to another class.  That’s exactly what happens in her book: The most skilled labor “shrugs” and escapes – hmmmmmm, there’s that word again, escapes to a mythical shangri la, where they stop working.  

Arthur Laffer’s latest book, The Wealth of States, clearly makes the point that labor is flexible.  It moves from states with high taxation levels, to states with lower taxation.  That’s pretty easy to predict, isn’t it?

With Stephen Moore and Jonathan Williams, Laffer produces an annual report titled Rich States, Poor States.  The results in the most recent 14th edition are easy for an economist to predict:  States with no or low income taxes and worker freedom are more economically competitive than the other states.  It really is producing two America’s that I identify in podcast #72 Two Worlds.  In that podcast, I make the assertion that the two worlds are based on Worldview differences, but they happen to coincide with economic differences.  That’s because Christianity and Economics both flourish under the same conditions: Freedom.  I will refer you to podcast #99 Faith and Freedom, for more details.

 

Industry to Industry

The opening of low-cost labor countries to the global market was accentuated by China joining the World Trade Organization in 2001.  That caused the product markets to move to those countries, leaving developed economies like the US with a greater emphasis on the service economy.  The US emphasized its flexibility by moving from a product to a service economy.  Most economists appreciate that flexibility, which made laborers on both ends of the market richer.  But a few politicians, like Donald Trump, disagreed.  They wanted American labor to take a pay cut to make products.  That’s not an economic trade-off that suppliers of labor are willing to make.  Remember, people like to move up in pay, not down.  As long as the US labor force remains flexible, we all get richer.  When labor becomes ossified, we all get poorer.  

I was trailing Ginger to San Diego a couple years ago.  The hotel we stayed in was part of a small retail center.  Four of the six stores were in the service market: Exercise, a dance studio, a hair salon and a restaurant.  In only two of the six stores, did people walk away with goods: A bookstore and a kids educational toy store.  There’s a good assumption that retailers are free and flexible about providing products or services.  They choose services.  That’s flexibility.  

In podcast #51 titled The Gig Economy.  I have made the point that more flexible work arrangements are not only better for the suppliers of labor, they are better for the demanders as well.  See, here’s the point: Things change.  As they do, the economy that is the most flexible will succeed.  The economy that has higher regulation will fail.  That’s because the economy looks forward, and the political system that makes the regulations looks back.  As Christian economists, we should look forward and not fear the changes the future will bring.  I’ll refer you to podcast #88 Don’t Fear the Future for more details. 

What should we fear?  Well, that’s explained in my closing:
Fear God,
Tell the Truth,
Earn a Profit.

 

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Fear God,
Tell the Truth,
Earn a Profit.

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