As the Director of Undergraduate Studies at USC Econ, I am trying to get to know more of our students. Last night, I took five smart young people to dinner. The group consisted of three first year students, a senior and a junior transfer. It turns out that not all Economics majors are the same. One is actively engaged with the rock climbing club while another enjoys yoga and a third is into ping pong while a fourth plays music and debates and the fifth plays tennis. Each of them had some advice for me concerning what USC Econ can do to offer them an even better major. They want more internship possibilities and more career planning advice. Some want more research experience. We did have one spirited debate last night. One student embraced Senator Sanders' agenda of raising the minimum wage and other well intended policies. I countered that this well intended agenda would transform our economy into a larger version of France and that it is important to “be careful what you wish for”. It interests me that this student (who has attended 4 years of USC Econ lectures on economics), could so firmly hold this worldview.
I argued at dinner that in our Internet world that the assumptions embedded in the perfect competition model of labor markets now hold true more than at any time in history. Workers have close to complete information about what it is like to work at different firms and in all medium to large cities they have thousands of potential employers to work for. There is an active labor market searching for skilled and/or dedicated people.
I would hope that any graduate of USC Economics knows at least three things; 1. the power of incentives in guiding human behavior, 2. the importance of allowing the price system to allocate scarce resources, 3. the skill to use statistics and econometrics to rigorously test hypotheses. These three pieces of knowledge are likely to be both necessary and sufficient for later life success.