|
Authored by: mbouckaert on Tuesday, December 11 2012 @ 08:16 PM EST |
Depends on what you hold as remaining constant.
If the total value or number of widgets remains constant,
then the demand for labor drops and therefore the price of
labor goes down.
If the total demand for labor remain constant then all
remains constant, including the price of labor.
If the demand for labor rises and not that much labor is
available, then the price of labor goes up. How much
depends on how scarce labor is.
---
There are many more assumptions in all of that, including:
(*) What type of labor and how can I substitute one for
another (*) Quality of labor at a given price (and whether
the market cares) (*) Change in quality of demand at
constant volume.
But the OP is correct: If all else is unchanging,
productivity gains that result in overabundance of labor
eventually reduces the price paid for labor.
But never has everything else remained constant.
---------
Also, if we follow frictionless reasoning, the reason why
labor costs would go down is a secondary result of
competition; the primary result of competition causes
*profits* to go down.
So in this friction-free, limitless ideal world, profits
tend towards zero, payment for labor tends towards zero,
prices tend towards zero. Is that FOSS <g,d,r>?
---
bck[ Reply to This | Parent | # ]
|
|
Authored by: Wol on Wednesday, December 12 2012 @ 08:15 AM EST |
The big problem with your scenario is "management capitalism". Where
the managers siphon off all the profits into their pockets.
Even where companies are profitable, the proportion of the wage bill going to
those who actually EARN that money is going down, and the proportion going to
the bosses who (mis)manage the company is going up.
Cheers,
Wol[ Reply to This | Parent | # ]
|
- Taxes ... - Authored by: Anonymous on Wednesday, December 12 2012 @ 09:52 AM EST
|
|
|
|