View Poll Results: Does Labor Exist on a Supply Demand Curve

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  • Price, Supply, and Demand of Labor all impact each other

    31 93.94%
  • Labor is not impacted by Price, Supply, or Demand

    2 6.06%
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Thread: Does Labor Exist on a Supply / Demand Curve?

  1. #11
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by DVSentinel View Post
    Choice 1 should be true.

    But then enters government. Since going off the gold standard, repeated and continuous cycles of labor cost increases and inflation, partly caused by those increases, has left us non-competitive for labor rates in the global market. After all the raise in minimum wage and other labor rates, people today do not, relatively, have any more purchasing power today than when the gold standard was eliminated and minimum wage introduces. Many actually have much less purchasing power today because their pay rate has not always kept pace with inflation.

    In the end, all we have done is price ourselves out of the labor market.
    The US has a labor cost advantage over Western Europe, Japan and Canada. Only when compared to lower income countries like lesser developed European countries, South Korea and especialy China does the US have a higher cost of labor. I strongly doubt the US would be better off trying to compete with labour rates in Mexico by trying to reduce labour costs to the the current cost of labour in Mexico
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by Lord Tammerlain View Post
    The US has a labor cost advantage over Western Europe, Japan and Canada. Only when compared to lower income countries like lesser developed European countries, South Korea and especialy China does the US have a higher cost of labor. I strongly doubt the US would be better off trying to compete with labour rates in Mexico by trying to reduce labour costs to the the current cost of labour in Mexico
    Competitive does not mean lower it to their level. There are still shipping, other costs and other factors which would make us competitive without dropping labor to that cost level. We could not even reduce our labor costs unless we some how lowered costs to the consumer at the same time. But unless we somehow become competitive, we will continue to see jobs disappear. There are other factors, besides just labor costs, that are driving those jobs away also.

    Western Europe (or at least Germany for one) and Japan maintain their ability to remain in the market by marketing quality not price. Even then, they have some troubles and Japan has also been outsourcing to cheaper labor markets. I don't know about Germany, but since everyone else in the industrial world is seeing outsourcing, I suspect they are also.
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  3. #13
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by Lord Tammerlain View Post
    The cost of supplying that labour

    Doctors are always going to have a high cost due to the training involved and lenght of training required. To produce a supply of doctors is very expensive in both monetary and labor resources.

    Other factors would be living costs. In a place like NYC where the living costs are quite high the cost of labor is going to be high as it would not be profitable to supply labor at a rate similar to the cost of labour in say Kansas

    One issue


    Treating labour like a raw material can lead to some rather tragic events.

    When a supply of bananas, or cattle goes bad due to excess supply, they can rot or be put down due to to high of costs to put them to market. What to do with an excess supply of labour?
    Simply explaining that highly skilled/gov't certified professionals get higher pay, ignores the fact that education/certification time/costs simply makes those qualified professionals more rare, which reduces the supply. The cost of living is a two way street, sort of a chicken and egg deal; raising the rent alone does not make the tenant's pay go up, obviously the tenant had to make enough already to pay the higher rent, that too is the result of supply and demand, the supply of low wage labor in a high cost area is limitted by commuting time/cost and local rents. We are now seeing the effects of an oversupply of labor, high unemployment rates, stagnating wages and lower domestic demand for goods and services.
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by cpwill View Post
    Is labor impacted by relative supply and demand? If there is a shortage of trained engineers, will their income go up? If there is a surplus of recent law-school graduates, will their income go down? If we increase the price of labor without altering supply, will demand go down?

    In short, is labor effected by supply and demand? Or magically is it the one service / commodity that isn't, just because it happens to be the thing that most of us sell?


    Poll is in response to several people that I have seen either explicitly or implicitly argue the latter, that somehow if you increase the cost of labor, you do not decrease demand when supply is held constant.
    The answer, of course, is number one...as anyone familiar with grade school econ knows.
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by Muddy Creek View Post
    No, it's created by congressional laws allowing lowering wages, shipping jobs overseas, and discriminating about races and sexes in wages.

    Nothing more, nothing less.
    Right....... If that were true, then the wages would be uniform among groups. All the white males make the highest possible, white females are next lowest, then black males, then black females, etc. etc. If that were the only thing determining wages there would be no variation among groups, and no overlap between the groups what so ever.

    Oh wait, that isn't the case. Besides what do you think makes companies ship jobs overseas? Would you guess that it is supply and demand?

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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by DVSentinel View Post
    Competitive does not mean lower it to their level. There are still shipping, other costs and other factors which would make us competitive without dropping labor to that cost level. We could not even reduce our labor costs unless we some how lowered costs to the consumer at the same time. But unless we somehow become competitive, we will continue to see jobs disappear. There are other factors, besides just labor costs, that are driving those jobs away also.

    Western Europe (or at least Germany for one) and Japan maintain their ability to remain in the market by marketing quality not price. Even then, they have some troubles and Japan has also been outsourcing to cheaper labor markets. I don't know about Germany, but since everyone else in the industrial world is seeing outsourcing, I suspect they are also.
    Germany of course does outsource, many of its companies have taken production (low skilled) to Poland to supply their German plants

    Not to mention the number of German auto plants being built in the US or Mexico. Germany has programs and policies in place though that promote and maintain the high skill levels of german production workers


    Lets not forget the US does have a very efficient transportation network, the lowest cost energy, cheap labour when compared to other high income countries. The US is losing jobs only to countries in which it would be impossible to compete on a labour cost basis
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by Lord Tammerlain View Post
    Germany of course does outsource, many of its companies have taken production (low skilled) to Poland to supply their German plants

    Not to mention the number of German auto plants being built in the US or Mexico. Germany has programs and policies in place though that promote and maintain the high skill levels of german production workers


    Lets not forget the US does have a very efficient transportation network, the lowest cost energy, cheap labour when compared to other high income countries. The US is losing jobs only to countries in which it would be impossible to compete on a labour cost basis
    Those "foreign" auto plants in the US, especially BMW and Mercedes, are not really outsourcing. Under the current US Tariff system, if they produce so much in the US, then they don't have to pay full import tariffs on all their products. They don't actually manufacture much here either, they import the parts and only do final assembly in the US.

    If our transportation system is "very efficient", I don't want to see what the other guys look like.
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by Lord Tammerlain View Post
    The cost of supplying that labour

    Doctors are always going to have a high cost due to the training involved and lenght of training required. To produce a supply of doctors is very expensive in both monetary and labor resources.

    Other factors would be living costs. In a place like NYC where the living costs are quite high the cost of labor is going to be high as it would not be profitable to supply labor at a rate similar to the cost of labour in say Kansas

    One issue


    Treating labour like a raw material can lead to some rather tragic events.

    When a supply of bananas, or cattle goes bad due to excess supply, they can rot or be put down due to to high of costs to put them to market. What to do with an excess supply of labour?
    You have yourself twisted there. Its not "treating labour like a raw material" that leads to tragic events, its allowing yourself to have an excess supply of labour in the first place. That comes with smart resource management, the same as the bananas or the cattle. The stakes are merely higher.

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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by cpwill View Post
    I'm pretty sure that would fall under "supply".



    You know, I was reading a book by the guy who works for the World Bank, and he made the note that countries with a higher lawyers - to - engineers ratio have slower rates of growth. Apparently when you attract your intellectual talent into redistributing wealth rather than creating it, the effects are negative for the nation at large.
    Since when do lawyers have anything to do with redistributing wealth ?
    A great many things affect growth rates. Just knowing the lawyers/engineers stats is far from sufficient.

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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by ReformCollege View Post
    You have yourself twisted there. Its not "treating labour like a raw material" that leads to tragic events, its allowing yourself to have an excess supply of labour in the first place. That comes with smart resource management, the same as the bananas or the cattle. The stakes are merely higher.
    Unexpected events can cause an excess supply despite smart resources management. An economic downturn, a drought etc.

    Treating people as you cattle will lead to tragic events. Which is why running an economy, is not the same as running a society. What is best for one, will not be what is best for the other at some times
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