How much is your time worth outside of work?
If you are like most middle-class people, your immediate thought might be to think “zero dollars per hour.” But you would be wrong to think that.
For some reason, the middle class tend to be stuck in the mindset that, outside of their jobs, their time isn’t worth anything. Their time, therefore, should be free. This shows up most when their employers coerce them into working more than 40 hours per week for no additional pay.
By doing that, the employer is effectively reducing the amount of money their time is worth. If you make $30 per hour in a normal 40-hour week, that’s $1200 for the week. But if you work 60 hours for the same pay, you’re now effectively being paid only $20 per hour.
Here’s a practical example I want you to think about to help convince yourself that your time outside of work isn’t worth nothing.
Consider mowing the lawn. Maybe it takes you an hour to cut your grass, front yard and back, if you have regular-sized yard. If, instead, you paid someone to cut your grass for you, how much do you think they would charge? You can probably expect no less than $20 if he’s generous, and probably closer to $40 or $50 for a good job.
Now, consider how many hours you would have to work at your present job to pay that person to cut your grass. If you make $20/hr, and it costs $40 to hire someone to cut your grass, you’d have to work over two hours (to account for the loss you suffer from taxes and Social Security/Medicare fees) to earn enough money to pay someone to do what you could do yourself in an hour.
The next time your boss tells you that he wants you to work unpaid overtime, you need to think about this example and remember that your time is not free. But the snag you might hit is this: if you say “No” to unpaid overtime, you might think you are at risk of losing your job.
But you need to remember the principle of the matter. Don’t say “yes” because you think your time outside of work is worthless; say “yes” because of some other reason.
ENTREPRENEURS VS. SALARIED WORKERS
Entrepreneurs don’t get stuck in this mindset. I think the problem has to do with the “training” and conditioning we receive in public school. Public school is a heavily-bureaucratized system. It teaches bureaucracy and produces bureaucrats-in-training.
Bureaucratic thinking is the opposite of entrepreneurial thinking. Bureaucrats hate risk and uncertainty and try to reduce them to as low as possible by devising procedure after procedure to control every facet of the daily process.
Entrepreneurial thinking understands the concept of risk-and-reward. People who bear greater uncertainty in a society are taking more risks. They are admitting that they don’t know exactly what’s going to happen in the future, but they are willing to face that uncertainty in the hopes of attaining a greater reward.
Bureaucratic workers face very little risk in their day-to-day affairs, and they are compensated appropriately: they trade off their proximity to risk by accepting small, fixed salaries. Entrepreneurs confront risk and uncertainty daily, and consequently there’s not necessarily a guaranteed paycheck coming their way.
But if their endeavors pay off, they are rewarded with great profits by the customers they serve for bearing that risk.
NOT AN UNLIMITED RESOURCE
If you have children, I recommend that you start teaching them the value of their time from an early age. They need to learn early on that, no matter how red-in-the-face someone may scream at them trying to convince them otherwise, their time is valuable.
Time is a finite resource. It is limited. We are only given a certain amount, and that amount is unknown to all of us. That doesn’t preclude planning for the future; Moses tells us that it’s legitimate to expect to be given 70 years on this earth:
The years of our life are seventy, or even by reason of strength eighty; yet their span is but toil and trouble; they are soon gone, and we fly away. [Ps. 90:10]
We should plan for the future, but include contingency in case we don’t live as long as we expect. This includes life insurance, funeral planning in advance, savings, etc.
Just remember that time is a limited resource. Economically, any resource that is limited is scarce, and scarce resources should be distributed efficiently to the highest bidders. Oil is a scarce resource, gold is scarce, iron is scarce, and they are all precious and valuable because of their scarcity and their perceived value by potential customers. Your time is in this list. It is scarce, it is valuable to someone, and therefore it should not be made available for free.
If you give away your time for free, you are subsidizing that endeavor by giving them a price break. Donate your time to the Church and to charity; sell your time to your employer(s).