Want to make a lot of money? Consider supply and demand

The following is my first op-ed piece from May 26, 2012 published in the Orlando Sentinel.

As a part-time worker at a minimum-wage job in retail, I have countless days where co-workers declare they're underpaid. I can't keep track of the number of times a fellow worker has murmured the words "unfair" and "minimum wage" in the same sentence.

Minimum-wage workers, often young adults, receive a low income but have high costs of living.

Even new managers are shocked when they discover how much their employees are being paid, and they believe we should get a higher wage.

These comments beg the question: Are we correct in claiming we are underpaid?

What if I told you that I, like most other minimum-wage workers, am overpaid at Florida's minimum wage, and that this is not opinion but basic economic fact?

Simply, it's a matter of supply and demand.

Unlike my minimum-wage job, there are occupations in which people can legitimately claim they are underpaid. One of these occupations is the pharmaceutical industry.

There are more than 8,000 job openings for pharmacists, and according to the Bureau of Labor Statistics, the demand for pharmacist jobs is exploding nationwide with 25 percent more jobs expected by 2020. But the rate at which people are filling up vacant positions is a different story.

It may be hard to believe that any American employer struggles to fill vacant jobs given this economy, but according to HealthAffairs.org, unexpected growth in medication use has escalated demand for pharmacists that has outpaced supply.

In economic terms, there's a higher demand for workers in this market than there are people available to work. This justifies the label of a "shortage" in the pharmacist profession. Pharmacists are correct in stating they are underpaid because of the shortage.

In contrast, consider my job. Like the majority of minimum-wage jobs, for every one worker my workplace is trying to hire, about eight people are applying. Minimum-wage jobs don't require high qualifications, which results in a great number of available workers. Each week, my managers conduct group interviews to deal with the vast volume of people able and willing to work.

In economics, this means there is a surplus of workers; there are far more people available to the company at the price of minimum wage than there are jobs available. My co-workers and I are economically correct in saying we are overpaid at minimum wage because there is a surplus of us.

Surpluses in markets mean the price is too high. At a minimum-wage price of $7.67, eight people come to my company ready to supply their services when my company is demanding only one.

If managers at my job were to lower the price to, let's say, $7.40 an hour, only one person might apply for the job, which equals the one employee my job demands. Lowering the price cools off the surplus of people.

At this lower price, my workplace has found market equilibrium, or a more perfect market.

A Gallup poll has found that 43 percent of American workers think they are underpaid. To them I would say: The next time you are asked if you are underpaid, put aside opinion and answer according to the laws of supply and demand.

What you have to do in order to make a lot of money is simple: Focus on supply and demand. Pick a job where the demand for people is high, and the supply of people who can do this job is low.

And if you hear someone say that people can't live on minimum-wage jobs, just ask: Isn't $7.67 an hour better than zero?