Understand economics from scratch

Chapter 14 How the Wage Level Is Determined—The Economics of Factors of Production You Must Know (2)
Once, Mi Zixia's mother was seriously ill, but the capital was far away from home. In order to get home as soon as possible to seek medical treatment for her mother, Mi Zixia pretended to pass on the emperor's order and asked the coachman to drive him back in Wei Linggong's car. Home.According to the decrees of the state of Wei, those who privately drive the king's carriage will be punished with amputation.Duke Ling of Wei found out about this, and instead praised him: "What a dutiful son! In order to seek medical treatment for his mother, he is not afraid of the punishment of amputation." Another time, Mi Zixia accompanied Duke Ling of Wei to Orchard walk.Mi Zixia reached out to pick a big and ripe peach, and when he was halfway through eating, he thought of Wei Linggong beside him.Mi Zixia handed the leftover half to Wei Linggong for him to share.Wei Linggong didn't care that these were Mi Zixia's leftover peaches, and said: "You are so kind to me by letting me eat the delicious peaches!"

After Mi Zixia got older, his face gradually faded, and Wei Linggong didn't like him so much.Mi Zixia offended King Wei, Wei Linggong not only stopped accommodating him as in the past, but also counted Mi Zixia's faults: "This guy used my car in the past under the false order of the emperor; Give me the unfinished peaches. So far he still does not change his old habits, and is still doing things that offend me!"

Later, Wei Linggong finally found an excuse and punished Mi Zixia.

Mi Zixia received completely different treatment before and after, because his beauty was liked by Duke Ling of Wei in the past, but after his aging appearance, he was no longer liked by Duke Ling of Wei.In other words, he was irreplaceable before, but has become replaceable later.This actually involves the substitution effect in economics.

What is the substitution effect?The change in the relative price of a commodity due to a change in the price of a commodity, which leads to a change in the quantity demanded by consumers while maintaining the same utility, is called the substitution effect of a price change.For example, when you buy fruit in the market, when you see that the price of oranges has dropped, but the price of oranges has not changed, it seems that oranges have become more expensive in front of the reduced price, so you tend to buy more oranges instead of oranges.

Substitution exists not only between items, but also between people.We know that whether it is a society or an enterprise, its own resources are scarce, and how much a member can occupy in the organization depends on his importance in the organization, that is, the size of his substitution.In an organization, if a person is easily replaced, then his own value is not high. In other words, if a person wants to get more resources than others, he must be more irreplaceable than others.

This is also the reason why those skilled and talented people are favored in enterprises, because there are too few skilled and talented people in this world, and it is not easy to find a person who can replace them.Especially for the middle and high-level managers of enterprises, not only must they have outstanding talents and rich experience, but also their personalities and behaviors can be well adapted to each other, and it is even more difficult to be harmonious with each other. I cherish it even more.For example, many companies are working very hard to improve the treatment of their R&D personnel, because these people have mastered the core technology of the company. Once they are poached by other companies, they will cause huge losses to the company. These people are irreplaceable to the company. people.Unlike ordinary employees, you are not willing to do it. There are many people who want to do it. It is easy for companies to find substitutes in the labor market. Differs greatly.Therefore, the annual salary of the CEOs of those famous companies is several million yuan, while the annual salary of ordinary employees may not be as much as a fraction of theirs.

Don't feel unfair, if you want to get the same treatment as them, you have to make yourself irreplaceable first.

How is irreplaceability obtained?There are several channels: one is that you have a talent, such as a singer with a good voice, a model with a tall and well-proportioned figure, etc.The second is obtained through blood relationship. For example, the sons and daughters of private company bosses are the successors of their parents' careers, and the children of high-ranking officials have more chances of success than ordinary people.The third is through good interpersonal relationships, such as the relationship between comrades-in-arms and the relationship between classmates.In today's market economy conditions, the status of popularity in the process of enhancing irreplaceability is becoming increasingly apparent.The fourth is to obtain by means of geographical relations, such as enterprises only recruit locals, not outsiders.

If you don't have the above irreplaceability, you can only obtain it through the investment of human capital.It is very important to obtain irreplaceability through human capital investment.Due to the rapid development of the modern information society, the investment in human capital is to cultivate one's own core competitiveness, so as to obtain more resources in the fierce market competition, so as to make oneself more irreplaceable.

Don't resign easily, don't change industries easily
As the end of the year approached, Hui Na began to think about job-hopping again.Speaking of which, Huina's personal conditions are pretty good: a graduate of a famous university majoring in finance and economics, CET-3, good spoken English, and a beautiful appearance.But her capital makes her not satisfied with the status quo.So one of the things she must do every day is to study the recruitment notices in the newspapers. If any company offers a higher salary than the current company, then she will run to that company without hesitation.Someone secretly helped her do the calculations, but she was shocked: Hui Na had already changed seven or eight companies within three years of graduation. The most exaggerated time was when she jumped to two companies in a month, and one of them only worked for three days. Just say goodbye to the boss.

Hui Na always sneers at those who have stayed in the same unit for several years and have no plans to change jobs: "With such a small salary every month, if you don't change jobs, what can you do in this life!"

Job hopping refers to changing jobs and units.In order to seek better treatment and live a better life, it is understandable to constantly change jobs.However, if it is too frequent, we have to consider the cost of constantly changing the new environment.From the perspective of economics, it is the opportunity cost contained in it.

Different people have different opportunity costs for job-hopping.For the average person, what are the opportunity costs of job-hopping?
The first is the opportunity cost of time.If you want to succeed in job-hopping, you have to spend time collecting and analyzing recruitment information, and make correct judgments on recruiting companies in the market.In this process, job-hoppers have to pay costs such as time and energy, and also bear psychological pressure such as waiting, anxiety, and worry.When the information is unclear, there is also the pain of how to choose.

The second is the opportunity cost of salary.Job hopping means that you give up your original salary, as well as the potential salary, benefits and other treatments that may be obtained because of this.If your original monthly salary is 5000 yuan, plus bonuses, subsidies and insurance, etc., it may be nearly 8000 yuan.If you can't find a job in the month you resign, then the 8000 yuan is the opportunity cost you paid for changing jobs.

The third is the opportunity cost of interpersonal relationships.When you work in an environment, the remuneration you get is not only monetary salary, but also opportunities to learn and exercise and personal connections.Your network is your resource, and it is also your current passbook when you encounter difficulties and problems.

The fourth is the opportunity cost of promotion.When you are in a new environment, it is often difficult to be really reused at once. Although the position or salary may be higher than before, the new unit needs to re-test your character and work ability for a period of time.

In addition, if the job-hopping is unsuccessful, there is still a cost worthy of our careful calculation.Economics tells us that when the benefits are determined, people tend to make comparisons between different costs; when the costs are constant, people tend to compare the costs with the benefits to measure whether the cost paid is worthwhile.Therefore, what we call economics focuses on the concept of cost. It does not look at cost in isolation, but considers issues in conjunction with cost and benefit.Of course, when it comes to cost-benefit analysis, due to information asymmetry and market uncertainty, the actual cost is always greater than expected, while the benefit is always smaller than expected, which is unavoidable; otherwise, There are no failures and disappointments in life.

From the perspective of our whole life, the time included in our life is actually the biggest cost of life.A person who wants to achieve something always attaches great importance to the time cost, because inaction is the cost, so only actively looking for opportunities to gain life benefits can make up for the loss of time cost.As Pasteur said, chance favors only the prepared mind.Opportunity always favors those who pursue it.Freely chasing freedom and chasing the way of life you like is an important sign of a society's maturity.However, there is no free lunch in the world. When we win our freedom, we must pay a certain price for the freedom we paid for—opportunity cost. Here we might as well quote a philosopher’s words: God is opening a window for you At the same time, a door was closed.

Establish a personal brand and build core competitiveness
After leaving Microsoft, amidst doubts, Tang Jun took office as the president of Shanda Company.The first big thing he did was to lead Shanda Company to go public on NASDAQ in the United States.There was no precedent for an online game company to go public in China before, and the US stock market environment was also very bad at that time. One can imagine the difficulties Shanda faced.In such an environment, Tang Jun began to lobby foreign investors.

Once, Tang Jun walked into the office of an investor.After listening to Tang Jun's narration, the other party asked: "China's concept stocks fell again yesterday. Why should I invest money in you?" After speaking, the investor ignored Tang Jun and smoked a cigar leisurely.

Looking at the investor who didn't take himself seriously at all, Tang Jun smiled slightly, and he asked the investor a question: "So, do you believe in Microsoft, do you believe in Bill Gates?" The investor raised his head and answered Said: "Of course, I believe in Bill."

Tang Jun then asked again: "Then do you know who Bill Gates believes?"

"Who?"

Tang Jun replied confidently: "Bill Gates believes me."

Investors found it incredible. Tang Jun explained: "I am the only person in the history of Microsoft who has been honored as the lifetime president. This should show that Gates believes in me, right? Gates believes in me, and you should also believe in me."

Tang Jun's trick really worked...

Tang Jun's success in convincing investors is due to his personal brand effect.We often find that those who are successful have great personal brands.They always seem to be able to exude unique charm and achieve some unbelievable achievements that ordinary people seem to have.

In the current social competition, a word appears repeatedly - personal brand.In the past, we thought that only enterprises could have brands, but now this word has also appeared in the talent market.With the popularization of education, except for a very few positions and occupations, most occupations are going to the buyer's market, and the competition for talents is becoming increasingly fierce.At this time, if you want to stand out among the many talents, you must have a special ability that can attract others' attention, and this is the reason for the formation of your personal brand.

In life, we often find that those successful people have excellent personal brands, and they are always impressive.They seem to exude a unique charm at any time.A management scientist once pointed out: "In the workplace, you should establish your own brand as soon as possible, so as to become a person that can be remembered by your boss and colleagues. If you have your own personal brand in the workplace, you will have more choices. opportunities and more opportunities for upward development."

So, how do you build your own personal brand?
1. Personal brand positioning
If you want to build your own personal brand, you must first refer to your own personality.Just as "character determines destiny", character here also determines positioning.What kind of personality you have should choose what kind of personal brand to establish.This is the foundation of building a personal brand.You might as well ask yourself: "What are my personal strengths? What kind of work am I suitable for? What kind of image do I want to project in people's minds?"

2. Strong work skills
Personal branding is similar to product branding in this regard.Good product quality can establish a brand, and strong personal ability can build your own brand.Deep professional skills are an important element of personal brand building.How to make your work outstanding and irreplaceable is the key to building your personal brand.

3. Good learning ability

Building your personal brand doesn't happen overnight, you have to keep learning.And, even if you have formed a personal brand, in order to maintain it, you must continue to learn new knowledge and absorb new skills.Only after continuous accumulation and slow cultivation can you form a brand recognized by everyone.

4. Character quality
Moral standards and character are also crucial to personal branding.A talented but unethical person cannot build a personal brand.Therefore, if you want to build a personal brand, you must pay attention to your words and deeds.Because your behavior will be convincing only if your words and deeds are consistent.

5. Pack yourself appropriately

Maybe you are very capable, but you don't pay attention to appearance and have no characteristics, so it is difficult to attract attention.You can use more tasteful clothes, a more attractive tone, and a more graceful figure to make yourself have a better image and make your name more deeply rooted in the hearts of the people.

Involution effect, be wary of standing still in the workplace
After graduating from college, Green worked as a business representative for an insurance company.It's a daunting job because many people shy away from being an insurance salesman.Therefore, Green's work is very difficult to carry out.

Other clerks in the office complained about their job all day long, "If I can find a better job, I will definitely not stay here." I fell for it.” Of course, these people can only get the most basic salary.Only under the urging of the business department manager, or under the "carrot + stick" policy, can they make a little progress, otherwise they will stand still or regress.

Only Green is different from them.Although Green is not very satisfied with the status quo, the salary is not high, and the status is not high.But Green didn't give up, because he knew that he was giving up on himself rather than his job.Nobody in this world forces you to give up on yourself unless you do it yourself.Because Green also believes that hard work is never wrong.Effort can also make the ordinary and monotonous life interesting.

Therefore, Green took the initiative to find the source of customers.He memorizes the company's various business conditions, as well as the business of similar companies, compares the differences between his company and other similar companies, and lets customers choose by themselves.Although some people hope to know more about insurance, their aversion to insurance salesmen makes them lack knowledge in this area.After Green learned about these situations, he took the initiative to hold a lecture on "Insurance Tips" in the community, giving free explanations.

People know more about insurance and have a good impression of Green.At this time, Green was selling insurance business to these people again, and everyone was not disgusted, but willing to accept it.Green's work performance has improved by leaps and bounds, and of course his salary has also been greatly improved.

In the late 20s, an American anthropologist named Lifford Gelts lived in Java.This scholar, who has lived in scenic spots for a long time, has no intention of admiring the poetic and picturesque scenery, but devotes himself to studying the local farming life.What he sees is harvesting with plows and rakes. Day after day, year after year, the original ecological agriculture stays in a simple and repetitive state of reincarnation without progress for a long time while maintaining the pastoral scenery.The scholar named this phenomenon "involution". The result of "involution" is terrible. It will make people endlessly entangle, introvert, and introvert on one level. There is neither breakthrough growth nor gradual accumulation, and people fall into a vicious in the loop.The more you lack self-confidence, the more difficult it is for you to succeed, and the less you are able to succeed, the more you lack self-confidence until you break the can.As did Green's other colleagues described in the story.

In fact, as an individual, the root cause of entering the state of "involution" lies in the mental state and ideas.It is often said that confidence determines destiny, and ideas determine the way out.If a person always complains about himself, does not think about change, does not seek to make progress, and does not seek to develop, he can only stay where he is, and may even regress.Always keep things simple, follow the rules, step by step, and can only enter the state of reincarnation.

People are envious of the creative ability, decision-making ability and keen insight of those outstanding people, but they don't have this kind of talent at the beginning, but they have accumulated and learned it through long-term work.At work, they learn to understand themselves, discover themselves, be spontaneous, effectively overcome the "involution" effect, and finally fully utilize their potential.

If you have thought of pursuing "self-realization", if you have reflected your ideas in any aspect of your position and work, you will be moved by your enthusiasm itself.Even going to work on time every day is full of energy.From this perspective, your career is your job, and your career is the beginning of your career.Only in this way can we get out of the vicious circle of "involution" and meet our own victory.

Effective demand, the job does not necessarily have to be a professional counterpart

(End of this chapter)