Economics 203

     Sitting in Dr. Hess’ Intermediate Macroeconomic Theory class, I listened painfully as he extrapolated on wage growth and consumer confidence.

     A dinosaur of a man, both in stature and experience, he ran his classroom like a cafeteria, mechanically dolling out ladles of information onto our trays of hope that we’d pass the next exam and find jobs after college.

    In risk of creating an interactive moment, he posed a question to the class as he continued writing feverishly on the white board.

     “Now, let’s take two situations. Option 1, let’s say the median wage is $50,000 per year and you collect $75,000, or 25% above the median. Pretty good.

     Option 2, the median is $80,000 and you make $90,000, or only 12.5% above the median, but with $15,000 more buying power.

     Assuming inflation is constant between our two examples, how many of you would rather have Option 1?”

     Without thinking, my hand shot up. And it was alone.

     My heart skipped a beat as I felt naked in front of the room of polos and Longchamp totes.

     “That’s exactly right. We see more consumer confidence when people’s wages are further above the median than whether or not they are actually higher.”

     For the first time on my broken road of economic study at Davidson College, I felt like the smartest kid in the class. While economic theory assumes that all people will act rationally all the time, I had known from my hours of reality television viewing and closeted adolescent angst that such an assumption is bogus. We don’t care about the millionaire in Dubai. We care about the Joneses next door.

     I knew that $15,000 was a low price to pay to feel like you’re keeping up.