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. #21
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by Lord Tammerlain View Post
    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
    Not treating human capital like a resource is what can cause them to be mismanaged. You can treat human capital differently, but eventually it will catch up with you.

    And when are the interests of one not dependent on the interests of the other? Society has less problems when the economy is growing and running smoothly. The economy has less problems when society is functional and stable. In the modern age where society revolves around human created goods and services, the two are quite inseparable.

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

    Quote Originally Posted by earthworm View Post
    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.
    It is generally bad practice to criticize an finding before you have done any reading into the evidence supplied.

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

    Quote Originally Posted by ReformCollege View Post
    Not treating human capital like a resource is what can cause them to be mismanaged. You can treat human capital differently, but eventually it will catch up with you.
    And if you treat it exclusively like a resource you end up culling some stock like a rancher would do to cattle or pigs.

    And when are the interests of one not dependent on the interests of the other? Society has less problems when the economy is growing and running smoothly. The economy has less problems when society is functional and stable. In the modern age where society revolves around human created goods and services, the two are quite inseparable.
    Of course they are dependant on each other, but as I said what would be best for the economy at a specific time may not be best for society. Check the societal conditions in Greece, some of the baltic countries and a few other countries.
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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
    Labor is only a single input. Overall, we still drive up the cost of doing business higher then it is in other countries. Our corporate tax rate is the second highest in the world. Which is ironic because we also get the lowest amount of revenue as a % of GDP from the corporate tax compared to other countries. I would not be surprised if the difference was mostly due to evasion and off-shoring. This drives money out of the country. Apple alone is sitting on a $121B cash pile, with $83B of that offshore. Why on earth do we insist on demonizing companies like Apple, when we should be doing absolutely everything possible to keep them investing here? Who cares if they are morally right or wrong for minimizing their taxes, or how greedy they are or what their duty is, blah blah blah. None of that talk matters, what matters is their money staying here, and being invested here.

    By the why do we even need a tax on corporate revenue? It only raises revenue of 1.3% of GDP, and our absurdly high rates seem to drive capital out of this country by the droves. Apple doesn't need to send money to offshore accounts if they aren't being taxed at a corporate level anyways. They can keep their money here, and perhaps invest some of it in new factories here. They have already announced that they are going to move some of their production back into the U.S., so why wouldn't we want them to have as much of their cash as possible on hand when they are planning those new factories?

    Anyways, the take away point here is we have plenty of ways of competing on a global scale without attempting to cut our wages in half. But on that note, we shouldn't be aggressively pursuing wage increases regardless. What we need to do, is invest in our infrastructure and attracting capital into our country. If the factories get built, and people get employed, wages will creep up naturally with the resulting economic growth and decrease in labor supply. Labor does follow supply and demand, and if you want to decrease the supply you need to increase the demand.

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

    Quote Originally Posted by Lord Tammerlain View Post
    And if you treat it exclusively like a resource you end up culling some stock like a rancher would do to cattle or pigs.
    Huh? Who on earth suggested we do that? I certainly didn't.

    Quote Originally Posted by Lord Tammerlain View Post
    Of course they are dependant on each other, but as I said what would be best for the economy at a specific time may not be best for society. Check the societal conditions in Greece, some of the baltic countries and a few other countries.
    I'm not understanding what your point is here, but right now Greece has a 26% unemployment rate. That is in no way shape or form good for society. They didn't get that way doing what was best for long term economic health. They got that way by excessive social spending and covering it up by converting their debt into other currencies and paying banks to keep it off the books.

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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.
    For the most part, yes, labor is dictated by supply-and-demand, but it's not an absolute. There are companies that will keep employees in lean times and continue to pay them their full wage, even though demand would suggest they don't. On the flip side, there are also companies that will trim anything and everything even when things are going well.

    I think supply-and-demand is closer to being the driving determiner regarding new hires, and less so regarding employees who already have the job.


    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.

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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.
    Leave it to cpwill to come up with a thought-provoking poll! Nice job!

    The simple answer is yes.

    When the labor supply increases, but labor demand remains constant, the price of labor will drop. The inverse is also true.

    One could argue that the minimum wage artificially inflates the price of labor when the market labor demand is down.

    Many people do not understand that increasing labor cost will:

    1) drive up the price of a product or service and reduce sales due to noncompetitive pricing in the market

    2) Force manufacturers to resource cheaper labor elsewhere, generally overseas

    3) By artificially increasing labor costs (union contracts), the end product becomes more expensive, is less competitive in the market, and can drive down sales or add to inflation costs, negatively effecting the entire economy

    If an employee gets more money, but has to pay more money for products due to rising labor costs elsewhere, they have gained nothing.

    Any manufacturer cannot just increase their end selling price to offset increasing labor cost unless all of their competitors are doing the same thing, or they will become uncompetitive.
    The UAW does not understand this concept, as they only look at wage parity amongst the Big 3.
    That is why the Japanese US automakers are kicking the Big 3's asses.
    Retirement cost requirements for a corporation also are a subset of labor cost - you must look at the entire benefits package..
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by ReformCollege View Post
    Not treating human capital like a resource is what can cause them to be mismanaged. You can treat human capital differently, but eventually it will catch up with you.

    And when are the interests of one not dependent on the interests of the other? Society has less problems when the economy is growing and running smoothly. The economy has less problems when society is functional and stable. In the modern age where society revolves around human created goods and services, the two are quite inseparable.
    There is a problem with treating employees as human capitol. The problem is one of measurement. If measuring the value of human capitol done correctly is very difficult. It is generally not done correctly by large employers. (I was a low level design engineer managing a group of people. I made some ranking, and hire/fire decisions.) Here are three of the problems I have frequently seen in large corporations: Ignoring the basic culture of a person. Ignoring the true objective of a person. Equating the skill set to a diploma.

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

    Quote Originally Posted by OhIsee.Then View Post
    There is a problem with treating employees as human capitol. The problem is one of measurement. If measuring the value of human capitol done correctly is very difficult. It is generally not done correctly by large employers. (I was a low level design engineer managing a group of people. I made some ranking, and hire/fire decisions.) Here are three of the problems I have frequently seen in large corporations: Ignoring the basic culture of a person. Ignoring the true objective of a person. Equating the skill set to a diploma.
    Then the basic measurement of human capital would be the distribution of diplomas. Would it not?

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

    Not effected. Good times, bad times, salary pays the same.
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