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. #61
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by RGacky3 View Post
    Not at all, because examining one firm ignores the entire dynamics of the larger market, its totally different rules.
    I'm sorry. I thought I was clear. Let me clarify this one point. I’m a retired design engineer/systems architect. I was a member of several international standards committees that had representatives from more than ten large companies, some European. Over drinks in the evenings we would share high level issues about how our businesses were being run. We got to know each other and how our companies were really run. These meetings would be held in various places in the US and Europe. My designs would first be manufactured in house, but then moved to an outside vendor. I would travel to the vendors and evaluate their capability alone or as a part of a team. The vendors that I visited and evaluated (and occasionally trained) were in Europe, Mexico, Taiwan as well as the US.
    Last edited by OhIsee.Then; 01-24-13 at 12:31 PM.

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

    Quote Originally Posted by RGacky3 View Post
    Not at all, because examining one firm ignores the entire dynamics of the larger market, its totally different rules.
    I forgot about my wife that I also commented on. She worked as a software design engineer for two large US companies whose product has made international news lately. She is legally responsible, i.e. can go to jail, if she allowed certain things in their product to be released w/o adequate testing. She decided to quit and took a job out of state but in the same industry until retirement. (We rented an apartment there.)

  3. #63
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by OhIsee.Then View Post
    I'm sorry. I thought I was clear. Let me clarify this one point. I’m a retired design engineer/systems architect. I was a member of several international standards committees that had representatives from more than ten large companies, some European. Over drinks in the evenings we would share high level issues about how our businesses were being run. We got to know each other and how our companies were really run. These meetings would be held in various places in the US and Europe. My designs would first be manufactured in house, but then moved to an outside vendor. I would travel to the vendors and evaluate their capability alone or as a part of a team. The vendors that I visited and evaluated (and occasionally trained) were in Europe, Mexico, Taiwan as well as the US.
    I understand that, but in order to look at macro economics, you have to look at macro economic trends, cross industry, anacdotal evidnece doesn't really work.

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

    Quote Originally Posted by RGacky3 View Post
    I understand that, but in order to look at macro economics, you have to look at macro economic trends, cross industry, anacdotal evidnece doesn't really work.
    However, when the data on macroeconomics is obtained from macro measurements are not in alignment with a large sample of anecdotal evidence one should question the validity of the macro measurements. Also you have to question the motivation of those supplying the incremental data that is rolled up into macro measurements.
    Here is another example of micro vs. macro. I was advised to buy a house in one of the many developments in the Phoenix AZ area. The data and experts on home values were indicating that buying a home was an excellent investment. I was advised, a micro sample, by a relator to buy an investment house in an area West of Phoenix as we were approaching Phoenix from San Diego. By the time it was built its price would have increased by at least 20k. With that ‘advice’ I remodeled our Phoenix home and sold it almost precisely at peak and bought a home in Michigan were prices had already gone down. About 3 years ago we bought a 2nd home in the Phoenix area near the bottom of its ‘home price curve’, then another in Phoenix area a year later. Both will sell now for much more. Did we do this with macro data on what was happening with home prices?

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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.
    It is one variable, but one that is often overwhelmed by others to the point it becomes negligible. The thing is that demand for a product or service among consumers is the most overpowering force in determining the value of that product, and that demand is only distantly affected by the labor demand.
    Last edited by Morality Games; 01-25-13 at 08:54 PM.
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Now, I did vote that Labor does exist on a supply/demand curve however unlike other resources I do not believe it should be thought of in the "race to the bottom" mindset we take when looking at other costs.

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

    Quote Originally Posted by OhIsee.Then View Post
    However, when the data on macroeconomics is obtained from macro measurements are not in alignment with a large sample of anecdotal evidence one should question the validity of the macro measurements. Also you have to question the motivation of those supplying the incremental data that is rolled up into macro measurements.
    Here is another example of micro vs. macro. I was advised to buy a house in one of the many developments in the Phoenix AZ area. The data and experts on home values were indicating that buying a home was an excellent investment. I was advised, a micro sample, by a relator to buy an investment house in an area West of Phoenix as we were approaching Phoenix from San Diego. By the time it was built its price would have increased by at least 20k. With that ‘advice’ I remodeled our Phoenix home and sold it almost precisely at peak and bought a home in Michigan were prices had already gone down. About 3 years ago we bought a 2nd home in the Phoenix area near the bottom of its ‘home price curve’, then another in Phoenix area a year later. Both will sell now for much more. Did we do this with macro data on what was happening with home prices?
    The dynamics are totally different, one is a collection of corporations selling various products to a consumer pool competing over labor, invesetment and so on, the other is a single corporation organizing production and selling and marketing.

    As for your second example that's fine, but when we are talking about labor, the dynamics internal to a company are MUCH different than the dynamics on a macro scale, it the same fallacy as comparing a household to a country.

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

    Quote Originally Posted by RGacky3 View Post
    The dynamics are totally different, one is a collection of corporations selling various products to a consumer pool competing over labor, invesetment and so on, the other is a single corporation organizing production and selling and marketing.

    As for your second example that's fine, but when we are talking about labor, the dynamics internal to a company are MUCH different than the dynamics on a macro scale, it the same fallacy as comparing a household to a country.
    Wow. Quoted after about 4 weeks. Thanks.
    I apparently was not clear. (BTY, I was Chating yesterday with someone about this at Homw Depot.) When macro data is collected easily measured numbers are collected, for example the reduced cost of a part when it's manufacture is moved from the States to Tiwan. What is measured is the purchase price. What is delivered is a lower quality part that has to get additional testing stateside that results in a higher effective cost. When I was meeting with staff from more than a dozen companies we would talk about this. More later. Got to go.

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