Wages rise when demand for labor exceeds supply. That’s Econ 101.
That flies in the face of corporate methodology to cheapen wages and benefits along with product quality in the service of quarterly reports and profits.
Wages are kept low by artificially stunting labor demand. That happens either by under-investing in new capital or cartelizing the hiring process.
Price gouging is already happening.
Gouging involves monopolizing supply of commodities. If we increase the supply of capital and the number of hiring firms, that monopolization becomes more difficult.
But if we simply freeze out imports with trade laws, the existing firms can monopolize domestic supply more easily.
None of your replies have any basis other than broad opinion. It’s devoid of manufacturing ability, profiteering, or the corporate price gouging we already experience.
You just wave a magic wand and suddenly the US can defray the manufacturing deficit and will suddenly throw money at the workforce. Must be a nice imaginary world you live in.
While I mostly agree with you, econ101 is a pretty poor argument; early econ courses (like intro to micro and macro) are notoriously not grounded in reality.
You can argue about the goals of economic policy, but that’s very different from arguing the effects.
What is the response to rising labor demand? Do you
Independently raise wages to the bid price?
Or
Form a cartel to fix wages below the clearing floor?
The former is the “natural” response you learn about in 101, assuming a naive approach to the problem. The latter is what you learn works best in 201, when your goal is profit maximization.
Wages rise when demand for labor exceeds supply. That’s Econ 101.
Wages are kept low by artificially stunting labor demand. That happens either by under-investing in new capital or cartelizing the hiring process.
Gouging involves monopolizing supply of commodities. If we increase the supply of capital and the number of hiring firms, that monopolization becomes more difficult.
But if we simply freeze out imports with trade laws, the existing firms can monopolize domestic supply more easily.
“The invisible hand of the free market will save us all!”
It’s very real hands of very real people
None of your replies have any basis other than broad opinion. It’s devoid of manufacturing ability, profiteering, or the corporate price gouging we already experience.
You just wave a magic wand and suddenly the US can defray the manufacturing deficit and will suddenly throw money at the workforce. Must be a nice imaginary world you live in.
K
Lookit you…solved everything with a ‘k’. Pity it isn’t as easy as you handwave away.
While I mostly agree with you, econ101 is a pretty poor argument; early econ courses (like intro to micro and macro) are notoriously not grounded in reality.
You can argue about the goals of economic policy, but that’s very different from arguing the effects.
What is the response to rising labor demand? Do you
Or
The former is the “natural” response you learn about in 101, assuming a naive approach to the problem. The latter is what you learn works best in 201, when your goal is profit maximization.