Media outlets whine, mislead, get basics wrong in attempt to explain markets

December 20, 2022

By Tim Worstall

Both Business Insider and Fast Company manage to complain about the most basic economic fact about markets. Which, given that they’re trying to explain economic matters to their readers, is something of a problem.

This really is very simple, too. It’s on pages two and three of every economics textbook in existence. Or should be at least. That supply and demand curve. If there are lots of people willing to supply something then the price of it is low. That’s it.

It’s also not like this is something we don’t instinctively understand. When everyone’s zucchini plants produce at the same time then we can’t even give them away – for the other 50 weeks of the year they’re expensive at the grocery store. But apparently, it’s some gross outrage when this simple and obvious truth arrives in labor markets

Business Insider is moaning about how minor bands hoping to play live music can’t make a living doing so. There are dark implications about how this is because of TicketMaster, or Live Nation. Some monopoly of gig space, or ticket selling. When the answer is simple and obvious. There are many more people who would like to play live music than there are people willing to pay to see them. Therefore the lower end of the market gets paid nearly nothing to play the music.

That’s just the way that supply and demand works. We speak from bitter experience, having been in that game many decades back – long before TicketMaster and Live Nation. Gas money and a beer is the natural state of the bottom end of the market. Simply because there are many more would-be rock Gods than there are stages or audiences and it has ever been so. This is also why the average actor’s income from acting is zero. It’s fun to do, glorious in fact, which means that there are millions who do those amateur plays, dinner theater, and so on.

Just the way it works.

Fast Company thinks it is talking about something different with adjuncts in colleges. Their specific example is the New School. But it is the very same problem. There are many more who would teach college than there are colleges to employ them. So, the price of labour to teach in colleges declines.

Just the way it works.

More specifically, colleges expanded for decades, probably correctly. But so did graduate teaching, a lot of which only teaches people to become college professors in their turn. So, when the Boomers stopped having their children the number of people going to college flatlined at best. All those people trained with their PhDs and so on were competing for jobs teaching college. The wages paid to those who would teach college fell – the adjuncts are indeed paid starvation wages.

As with rock gods and actors, there are many more who wish to teach college. The graduate programs of the past mean there are many qualified to teach college. So, the price for college tuition labor is low. This is not just the way that it is this is something that most colleges have an entire department dedicated to teaching – the laws of supply and demand. Well, assuming we’re not talking about a liberal arts college that doesn’t do economics.

Business Insider ranks No. 21 for news and media publishers and gains 97 million visits a month from that position. Fast Company is more specialist and ranks No. 302 and gets 7.4 million visits a month.

Trying to explain these labor markets without grasping the most basic thing about labor markets – high supply means low prices – is just ridiculous. So much so that it must be deliberate. After all, it’s not as if journalists don’t know this. The most common complaint within that particular profession is that there are so many people who want to do it that no one can make a living doing it anymore.


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