If You're So Smart...
The Rich Nations Mystery
Which "Wood" You Choose?
If You're So Smart-Part 1
Who will you pay more: your brain surgeon or your cab driver?
Hopefully you said, "Brain surgeon." And you probably want a brain surgeon who graduated at the top of the class!
People earn income from their resources.
What resources? Perhaps?
The income people earn depends on the quantity and quality of the resources they have to offer, and on the supply and demand for those resources.
Most people earn income from their labor. They get a job and they get paid for the work they do.
What income do you expect to be earning at age 22?
Maybe you are planning to play pro basketball.
In 1994, 518,127 high school boys participated in high school basketball in the US.
Each year, approximately 56 players join the National Basketball Association.
The NBA has 29 teams with 12-man rosters, for a total of 348 positions in professional basketball.
As of 1996, only 4 individuals had ever joined the pros without going to college first.
The average work-life of professional basketball players is under 6 years. (A pro career usually begins at age 22 and is over at age 28.)
Average salary (as of 1996) is $1.6 million.
Minimum salary (1996) is $200,000
What are the costs and benefits of choosing to prepare for a high-paying professional basketball career?
ActivityWhat are some alternatives to a professional basketball career?
What can you expect to earn if you are not a professional basketball player?
Can you match an occupation with its monthly income?
(Handout worksheet) (Answers)
Were salaries higher or lower than you expected?
(Remember, too, that these incomes are before taxes; actual take home pay will be considerably less.)
ActivityHere's the list again, this time in order from highest to lowest income:
How many people do you know who could qualify for each of these occupations?
Did you find that you knew fewer people who were trained to do the high-skill jobs and more who could do the low-skill jobs?
If many people are willing and able to do a job at the market price, the supply is high. If few people are willing and able to do a job at that price, the supply is low. Supply and demand are important factors in determining income.
When workers learn and practice new skills, they are improving their human capital.
Education is a way of learning and practicing new skills. Rank the occupations in order of the number of years it would take to learn to do the job.
Part II of Worksheet handed out.
What correlation do you see between education and income?Education is a way of investing in one's own human capital.
What do you
How much education is enough?
Is a high school diploma that important?
Is a college degree worth that much more?
Once you've thought these questions over, go on to Part 2