With Labor Day fast approaching and what appears to be a settlement to the fifteen-day UPS strike, and with strikes being threatened by elsewhere, it seems that this is a good time to look at why people get paid what they do. Why is it that Altlanta Braves pitcher Greg Maddux will be paid $11.5 million for the next five years and Jerry Seinfeld is paid $1 million per episode? Why is CNN offering to double Dan Rather's $3.5 million pay from CBS to get him at CNN? Why did part-time UPS workers make anywhere from $8.00 to $11.00 per hour before the strike?

Most people's rate of pay, as with other prices, is based on scarcity value, supply and demand. A worker is hired because the employer expects that the worker will add value to products the company sells, value as perceived by buyers. The only reason the Braves are willing to more than double Maddux's pay to $11.5 is because they believe the Cy Young pitcher will bring that much in gate receipts and television revenues to the team. The folks at CNN must expect that having Dan Rather at CNN would increase CNN's sales by more than $7 million. Part-time UPS employees get paid what they do because the are able to add that much in value for UPS customers and, in turn, for UPS itself.

Just as any businessmen who wants to make money must offer something of value to customers and offer it a price at or below its competition, an employee must offer employers something of value for a rate of pay that is at or below that of competing workers for the value produced. The bottom line here is that a worker who wishes to be paid more must offer something of extra value to an employer.

The path to higher pay is acquiring more valuable skills, skills that few others are able or willing to acquire and skills that businesses and consumers value highly. Marketable skills can be gained at colleges, vocational schools or on the job. But it is not the degree or the diploma that gives one the opportunity to earn higher pay, but what one acquires in the process. Too many people who go to college take too few courses that add marketable skills and capabilities. It is not the degree that employers value, but the skills and capabilities that a person acquires while seeking the degree.

Some fields are difficult to enter because of the natural difficulty of that field and some because rules or certain social forces that restrict entry into the field, much the way that our legislature fixed entry into the land-based casino business in Louisiana. In such cases, the difficulty is gaining entry to acquiring the skill, not acquiring the skill. This was once the case with the building trades in the days before the Civil Rights Movement. Allowing easy access to valuable skills is important to promote real economic growth and equal opportunity.

The part-time UPS workers who were upset with their current pay and benefits should consider the opportunities they have with their part-time position, the opportunities they have to gain valuable skills, whether through college or vocational training. I know many college students who would love to make $8 per hour at a part-time job. The message to the part-time workers from UPS is "don't make this a career, but a path to a career."

If the skill or capability is highly valued and easy to acquire, many people will soon acquire that skill and the pay will soon fall to a much lower level. But if the skill is both highly valued and difficult to master, few will enter the field and the pay will stay high. In a Chinese fortune cookie my son recently got was a message that sums this up well, "What is cheap is of little value. What is valuable is not cheap." Now I need to convince my boss that I fall into the latter category.