View Poll Results: All othe things being equal, when you raise price, what happens to demand?

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  • When you raise price, all other things being equal, demand decreases

    11 84.62%
  • When you raise price, all other things being equal, demand increases

    1 7.69%
  • I do not believe that the laws of supply and demand apply to labor

    1 7.69%
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Thread: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

  1. #41
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by ReformCollege View Post
    You showed a singe study that showed that a single small town may have had a growth in employment whilst increasing MW.

    You also posted another study, and I cited your study, showing that it did lead to an increase in unemployment.
    That's not true at all...
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by ReformCollege View Post
    You showed a singe study that showed that a single small town may have had a growth in employment whilst increasing MW.

    You also posted another study, and I cited your study, showing that it did lead to an increase in unemployment.
    And my position is that both are ultimately possible at the local level, depending on other factors which have more of an affect on the demand for labor than the minimum wage does.

    It's impossible to look at the results for one town and generalize them because factors affecting that town are usually unique. If the majority of people in a town are employed by one employer, and that specific employer decides to streamline their operation by closing one factory and increasing the laborforce at their other factories, their overall demand for labor remained constant but the demand for labor in that town was decreased exponentially.

    It's far too complicated overall to make a single claim in either direction.
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by ReformCollege View Post
    You showed a singe study that showed that a single small town may have had a growth in employment whilst increasing MW.

    You also posted another study, and I cited your study, showing that it did lead to an increase in unemployment.
    It looked at NJ and Penn. Bordering states where one increased minimum wage and one didn't. It focused on the fast food industry which employed the highest % of individuals on minimum wage and would see a higher impact due to minimum wage changes. In addition it did focus on bordering counties since any impact on the minimum wage laws would be felt highest were consumers and markets were generally shared.

    In the study NJ where minimum wage rates increased actually saw higher rates of employment.

    http://davidcard.berkeley.edu/papers/njmin-aer.pdf
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  4. #44
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    People are not just commodities. Labor can be viewed as such, but that's a just a theoretical construct, as in reality, people respond to motivation, to coercion, to deception, any number of stimuli to which a lump of coal will have no reaction. In the real world, a workforce cannot be reduced to lumber. So I voted #3.

    I understand that labor does respond to supply and demand in the market, but when it comes to government policy, that shouldn't be the benchmark. Government should work to ensure that the system serves the people and not the other way around.

  5. #45
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by cpwill View Post
    Currently the score is 31 to 2 in favor of labor existing on a supply / demand curve. So, if Labor follows the rules of Supply and Demand, then what happens when, all other things being equal the price of labor is raised?
    Yup. Reduce an equation by omitting variables so that you get the answer you want. (Management where I used to work did that too often.) Then make a neat easy statement out of it so that even the meanest of intellects can understand. What do you get? Something you can believe in.

    So if the cost of burials was reduced to a dollar the demand would go way up.
    Last edited by OhIsee.Then; 02-20-13 at 01:43 PM. Reason: Add an example.

  6. #46
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by humbolt View Post
    It depends on whether the demand is elastic or inelastic.
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    That is exactly the right answer.
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by GhostlyJoe View Post
    People are not just commodities
    No one claims that they are, they claim that labor is a service for which demand can increase or decrease.

    Labor can be viewed as such, but that's a just a theoretical construct, as in reality, people respond to motivation, to coercion, to deception, any number of stimuli to which a lump of coal will have no reaction. In the real world, a workforce cannot be reduced to lumber. So I voted #3
    no, but a worker can be replaced with a machine.

    I understand that labor does respond to supply and demand in the market
    then why did you vote #3? You voted the opposite of your understanding.

    , but when it comes to government policy, that shouldn't be the benchmark.
    Government should not take realistic consequences of its' decisions into account when determining policy?

    Government should work to ensure that the system serves the people and not the other way around.
    Indeed. For example, I would argue that Government should not **** over poor people by pricing them out of the labor market and making them structurally unemployable.

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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Demand will decrease, but you don't know by how much because labor is not heterogenuous.

    If you raise minimum wage, the demand for it will drop, as minimum wage has a small correlation with unemployment. However, if the cost of a doctor doubled and you came down with appendicitis, do you not go and wait for prices to drop?

    Long story short, the more differentiated the labor, the more inelastic its demand.

  9. #49
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    Quote Originally Posted by cpwill View Post
    Currently the score is 31 to 2 in favor of labor existing on a supply / demand curve. So, if Labor follows the rules of Supply and Demand, then what happens when, all other things being equal the price of labor is raised?
    Demand decreases, prices increase, or the raise in labor costs is absorbed into the profit line.
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    Re: If Labor Exists on a Supply Demand Curve, what happens when the price is raised?

    So if the wealthy person has all the servants he can use at a trivial cost; but, then the cost of a servant goes up a bit does anything change? Not for the wealthy person. However, the company making the shoes for the servant’s family may sell a few more shoes replacing the totally worn out ones of the servant's family can now afford to replace. Then the cost of servant’s shoes goes down a bit because the volume goes up and the shoemaker has some fixed costs. Then …

    I think I understand now. But, gosh, it's so complicated.

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