Selling my labor, but only in large quantities...

A few days ago, I was talking to my boss about lunch. I'm a brown-bagger, I calculated a few years ago I could save about $1000 a year by taking my lunch. My boss, on the other hand, was happy to go to a local deli where he could get a $5 sandwich instead of a restaurant where he would pay $8 for a meal. I pointed out that he could bring his lunch for $2 or so, and he replied that it would cost more than the cost of buying his lunch for his time to make his lunch.

I'm not a big fan of this kind of reasoning - the idea that you shouldn't do anything if it costs you less to pay someone to do it than what you would be earning if you were working. It works if you actually would be having someone pay you for your time, but if you aren't directly substituting paid time to perform the task, it doesn't work. You could argue that you value your leisure time more than the cost savings, but people don't usually present it that way - or, IMHO, think of it that way.

The problem with this thinking is that most people don't have an unlimited ability to sell their labor in infinitely divisible chunks. Economists like to look at the marginal - additional - amount worked, and see how policy changes affect that. But most people don't work like that. Lots of people are salaried - they don't have the ability to work more and get paid more for it. True, they could get a second job, but most employers want want to buy labor in large chunks - they don't want someone who can put in a couple hours a week, they want someone who can work in 20 or 40 hour chunks. Besides, it's rare to find a part-time job that pays as well as full-time career-type job.

I'm kind of an anomaly in the work world - a white-collar (or at least light blue collar) employee who still gets paid by the hour, and thus still gets overtime. I'm notorious for always being willing to work overtime, and because of that I'm usually one of the first people who gets asked if I want to work when there is a need for someone to work. But there isn't always a need - there are times I would love some more money, but my services aren't needed. Other times, I would prefer not to work -I've worked a bunch already, or I have something else I would like to do - but I'll accept anyway, because I want to bank the money now, while I can, and because I know that if I turn down overtime, it's more likely I won't be offered it the next time it's available - they will ask someone who says yes, who they can count on. So I'll have weeks during start of school where I've put in 30 hours of OT, and other weeks where I don't need to fill out an overtime sheet because I haven't worked any.

That is why, while I appreciate it's ingenuity, I'm not sure that the Marginal Revolution Stimulus plan would do much. The idea is that it would lower the tax rate on income earned above the previous year's income, giving people an incentive to earn more. But once again, most people don't have a whole lot of flexibility to earn more - either they are salaried, or they can only work overtime when their employer has a need for extra staffing. Maybe a few will take second jobs, or do contract work, but lots of people don't want to have to work another 20 hours a week, even if they get to keep a little more of their earnings.

The other thing I'm thinking is that lots of people's "extra" earnings are probably in the quasi-underground untaxed cash economy - cash paid side work, selling stuff on eBay, ect - so a tax break isn't going to make a difference, because they aren't paying taxes in the first place.

And until someone is willing to pay me $5 or so for the 5 minutes it takes me to toast some bread and slap some meat on it - which I'm usually doing while watching TV anyway - I'm going to keep making my lunch.