Low Wages Cause Unemployment

Those that bother with economic reality will realise that deindustrialisation is a natural phenomenon in a mature economy

 

What exactly is your definition of "economic reality"?
It is only "economic reality" because of the policies the government has been persuing. If the government had different policies, there would be a different economic reality. Pushing society into a globablized economy, then calling job losses and low wages "economic reality" is an insult to all the people that have been pushed into minimum wage jobs because of people like you.

 

If you are uneducated monkey only capable of doing monkey work, are computer illiterate and incapable of even using a simple word processing program, inventory program, etc. Then you deserve to go the way of the wagon wheel makers and black smiths.

Such people "pushed into minimum wage jobs" are the economically useless members of our society and as such are going to suffer in a world of computerized everything.

Get an education or suffer the consequences. Those are the choices in a fully modernized and matured economy. No one gives a (*)(*)(*)(*) about the uneducated because there is no excuse to be uneducated in this country.

 

Even the people towards the top are going to suffer from higher unemployment and lower wages, as many of the people who would have otherwise worked in decent paying jobs at lower levels get displaced. Do you really think there will be enough good paying jobs available for most of the people if all the manufacturing jobs dissappear?

Although it no doubt has some validity, I just do not think we should blindly accept the notion that "workers should earn whatever the employers are offering".
When productive jobs that formerly payed good wages no longer pay a man enough to support his family on, there is something wrong. Expecting everyone to just adapt to the few remaining jobs that are decent paying is unrealistic, and missing the root of the problem. There just simply will not be enough of these remaining jobs for everyone. Wages will be driven downward, and eventually the unemployed just will not have sufficient motivation to persue the education/credentials to obtain these not-so-good paying jobs. Do not get me wrong, we should not be trying to save outdated wasteful jobs, but the concept of worker productivity is different than wage levels.

 

Just the obvious business of empirical evidence and economic analysis. All scary propositions for the cretinous rant engineered by economic nationalism.

A complete innocence of economic history! Trade has always been a natural part of our societies. Coercion (and the subsequent creation of inefficient economic rents) has been focused on protectionism.

Mercantilism has been rejected for yonks. How come you haven't caught up?

 

The real coercion is the system of land ownership (at least in the absence of land value taxation) and natural resource ownership. We cannot discuss inefficient economic rents without focusing on land rents.

 

I don't think you understand anything you say. See, for example, your previous support for Marxist 'supply and demand' theory (which obviously was a crass error). Its good to see you reliant on irrelevant Georgism though. Seems like a spiritual home for those that don't do economics!

 

More people would be willing to work, if the alternative of doing nothing didn't come with a free lunch.



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Classical economics does not teach that low wages increase employment. You are confusing wages with minimum wages. The argument is that a high minimum wage will increase unemployment, and thus lowering it will reduce unemployment. That is a very different argument than suggesting low wages increase employment.

If a company has a budget for $100,000 worth of jobs per year, and it hires 4 workers, their salaries will be $25,000 each. If that company is forced to pay $50,000 per worker, thus resulting in higher wages, the result will not be more workers, for the company still has the same budget. Instead, the company will lay off 2 workers, create more unemployment.

On the otherhand, if the company decides to increase its budget for workers to $200,000, advertising a position for 1 job that pays $100,000 will likely generate more applications than 4 more $25,000 jobs. However, the higher paying job will not result in more positions filled...just more demand for that particular job, which has a constant supply.

Also, I would love more income to be more equitable. But I reject the idea that shifting the income around would lead to higher demand overall. How on earth is that possible? If there are $1 million in the economy, demand in nominal dollar terms will be $1 million. It doesn't matter whether the rich or the poor are using the money in terms of what demand will be. Demand will simply be different. If the rich have a large portion of the money, more demand will go towards luxury items rather than what a more equitable economy would result it. Demand is shifted, but not increased. Keep in mind that buying stocks and investing money (as the rich do) is also a form of demand, as is saving the money in a bank.

Regardless, unemployment and wage data is widely available. Do you have any that shows the correlation you claim should exist?

 

Supply & demand says otherwise of course. Once the firm has wage making power, the minimum wage is a correction for market failure and can increase both wages and employment

 

Minimum wage has no affect on unemployment other than keeping lower skilled workers out of work.

During the dotcom bubble, the labor force was higher and there were more jobs and fewer workers to the point that minimum wage jobs were advertising for workers above minimum wage (obvious affect of the market determining wages) and hiring even lower skilled workers. That disappeared when a glut of workers appeared on the horizon.

 

It reduces underpayment of the lower skilled, ensuring reductions in inefficient wage differentials

 

It reduces employment of the lower skilled. Hard to make up the underpayment that way.

 

You'd have to show disemployment effects. The latest research shows zero or positive employment effects. That inefficient wage differentials are eliminated cannot be denied

 

When there is a large supply of workers relative to jobs, and the workers are unskilled, low wages is not a market failure. It is supply and demand.

 

low wages lower the power of the consumer... thus cause less demand... thus causing less jobs

 

Sounds like you don't know your supply & demand. Capitalism tends to mass unemployment, but supply & demand informs us that firms will reduce their labour demand in order to increase inefficient economic rents

 

Capitalism does not tend to mass unemployment, as history clearly shows us. Your assertions are simply false, and you offer no support for them. We have had this discussion before, and it seems to be headed down the same path. If you have hard data and sound reasoning to back up your claims, by all means present them. If not, there is no point in debated unsupported assertions.

 

Its something the orthodox and heterodox economists agree on. See the shirking model and its similarity with Marxist theory

What do you want? Support for shirking analysis, support for your 'innocence' of supply & demand? Be exact now.

 

As I thought. You have no support for your assertions. This discussion is over.

 

I asked you a question. You hid. This tells me a lot

With regards the shirking model, see Ewing and Payne, 1999, The trade-off between supervision and wages: Evidence of efficiency wages from the NLSY, Southern Economic Journal, 66). For your innocence of supply & demand see the meta-analysis by Doucouliagos and Stanley (2009, Publication Selection Bias in Minimum Wage Research? A Meta-Regression Analysis, British Journal of Industrial Relations, Vol. 47, no. 2, pp. 406-428 ).

I don't mind libertarianism. However, when its really based just on economic ignorance it is really conservatism and alien to individualism