Investing into Human Capital

 

Amelia Angus

Mr. Aparicio

Economics – 2

6/24/17

Honorbound

Although people cannot help lacking creativity or certain talents, they should always strive learn and build skills to prepare themselves for the future. Without education or experience, it will be hard for one to find a job and make a living down the road. Human capital, which is the sum total of skills embodied within an individual, could potentially decrease poverty around the world and give people a chance to pursue a career while maintaining a steady living.

In Naked Economics, Wheelan introduces human capital by explaining that Bill Gates’ human capital made him well off in the long run. Bill Gates had a skill which he made use of by coming up with a software that changed the lives of everybody around him. He decided to invest in his human capital which then made everybody more productive. People in poverty people are not poor because Bill Gates is rich; they are poor because they lack human capital, which Bill Gates has.

In America, 13% of the people are poor, but it is not that the majority of these people refuse to work. “True, people are poor in America because they cannot find good jobs. But that is the symptom, not the illness. The underlying problem is lack of skills, or human capital” [1]. Some people in poverty lack human capital, which makes them unable to pursue a career. Sometimes parents do not invest into their children’s human capital which makes it harder for the children in the long run because they might not have a strong education or skill in which they can build upon in the future.

Human capital requires investments, and “these investments require that we give up consumption in the present in order to be able to consume more in the future” [2]. An individual might have to give up a nice car in the present in order to pay for an education in the future. This sacrifice will actually benefit the person in the long run because he or she will strengthen a certain skill to put towards a career one day. Also, parents should try their best to invest in their children by sending them to school because this will have a significant effect on their children one day. “Productivity growth depends on investment,” so if more people invest in human capital, everybody would be more productive which could decrease poverty around the world [3].

In the future, one important concern will be whether or not we are investing enough as a nation to continue growing our standard of living” [4]. In order to increase our productivity and decrease poverty, we have to individually invest into our human capital which may include making sacrifices. Our fate depends on whether we use our human capital to work together and work towards a prosperous future.

 

[1] Wheelan, Charles. “Productivity and Human Capital.” In Undressing the dismal science, 129. Naked Economics. New York, NY: W. W. Norton & Company, Inc., 2010.

 

[2] Wheelan, Charles. “Productivity and Human Capital.” In Undressing the dismal science, 139. Naked Economics. New York, NY: W. W. Norton & Company, Inc., 2010.

 

[3] Wheelan, Charles. “Productivity and Human Capital.” In Undressing the dismal science, 139. Naked Economics. New York, NY: W. W. Norton & Company, Inc., 2010.

 

[4] Wheelan, Charles. “Productivity and Human Capital.” In Undressing the dismal science, 139. Naked Economics. New York, NY: W. W. Norton & Company, Inc., 2010.

 

Picture:

“Korolit.” Korolit. Accessed June 24, 2017. https://korolit.com/2015/10/leveragingyourhumancapital/.

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