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?

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    Does Labor Exist on a Supply / Demand Curve?

    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.

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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.
    Choice #1 is true, but insufficient as there are other market factors which affect the pricing of labor
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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.
    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 sangha View Post
    Choice #1 is true, but insufficient as there are other market factors which affect the pricing of labor
    Agreed. The relative price of capital, for example. However, my point is simply that I believe that the cost of labor impacts demand for it, and yet while I find this to be among the most obvious things in the world, I have repeatedly seen several others argue as though this were not true.

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

    Quote Originally Posted by cpwill View Post
    Agreed. The relative price of capital, for example. However, my point is simply that I believe that the cost of labor impacts demand for it, and yet while I find this to be among the most obvious things in the world, I have repeatedly seen several others argue as though this were not true.


    Another factor is the availability of qualified labor elsewhere. If the labor force in one country has few engineers and they demand a premium, but the number of engineers in another country is high and they work cheap, the company will either move the facility of bring in those engineers.

    In the case of lawyers, if there is only one lawyer in the area, he will likely starve. Bring in a second and the will both get fat. Create a couple hives of the blood suckers and all the lawyers get rich while the rest of us whither on the dying vine.

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

    Quote Originally Posted by code1211 View Post
    Another factor is the availability of qualified labor elsewhere.
    I'm pretty sure that would fall under "supply".

    In the case of lawyers, if there is only one lawyer in the area, he will likely starve. Bring in a second and the will both get fat. Create a couple hives of the blood suckers and all the lawyers get rich while the rest of us whither on the dying vine.
    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.

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

    Quote Originally Posted by sangha View Post
    Choice #1 is true, but insufficient as there are other market factors which affect the pricing of labor
    Care to name these other market factors and their impacts on the price of labor?
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    Re: Does Labor Exist on a Supply / Demand Curve?

    Quote Originally Posted by code1211 View Post
    Another factor is the availability of qualified labor elsewhere. If the labor force in one country has few engineers and they demand a premium, but the number of engineers in another country is high and they work cheap, the company will either move the facility of bring in those engineers.

    In the case of lawyers, if there is only one lawyer in the area, he will likely starve. Bring in a second and the will both get fat. Create a couple hives of the blood suckers and all the lawyers get rich while the rest of us whither on the dying vine.
    It is the very intent of our laws to make lawyers necessary. If they were simple, straight forward and did not contain ample "wiggle room" for a myriad of different, yet seeming equal, valid interpretations then lawyers would not be seen as needed. Note that lawyers make the laws purposefully complex to require the services of other lawyers to "decode" them for presentation to judges and juries.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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

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

    Quote Originally Posted by ttwtt78640 View Post
    Care to name these other market factors and their impacts on the price of labor?
    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?
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