Right Wing Economics

Discussion in 'Economics & Trade' started by Old Trapper, Aug 5, 2017.

  1. Reiver

    Reiver Well-Known Member

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    I've already told you. Its your choice to ignore it. First, we have to factor in the form of monopsony that dominates. Dynamic monopsony, for example, changes our understanding of full employment (as it predicts an increase in equilibrium unemployment). Second, we are referring to analysis which is not reliant on involuntary unemployment. Underpayment continues, without extra-market interference, will continue. Third, we need additional comment to understand the impact of a tightening labour market. I've already show that with Britain: demonstrating that weak unionisation (and labour market flexibility enforced through neoliberalism) leads to an outcome where underpayment can actually increase when employment falls.
     
  2. SMDBill

    SMDBill Well-Known Member

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    Ok...monopsony happens. Got it
     
  3. SMDBill

    SMDBill Well-Known Member

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    Not ignoring. It just adds no value to the context of the discussion.
     
  4. Reiver

    Reiver Well-Known Member

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    That is particularly naive, given you are automatically ensuring a restricted view over the labour market and therefore understanding of economic outcome. Of course that is standard in right wing economic modelling? Analysis is typically child-like as they assume, without any rhyme or reason, perfect competition in labour markets.
     
    Last edited: Jan 8, 2018
  5. SMDBill

    SMDBill Well-Known Member

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    No I am saying it doesn’t impact the points I was making in a definable way so it’s existence becomes irrelevant in that context. My point before you started quoting me was wages can finally enjoy upward market pressure if we hit or approach full employment. US wages have been relatively flat since the early 1970s and this is the first time in decades extremely low unemployment and other economic impacts may push them upward. You haven’t shown my claim incorrect despite many forum pages of attempts with the one economic theory you know and trumpet at every opportunity.
     
  6. Reiver

    Reiver Well-Known Member

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    Technically you've merely given a corrupted account of the Phillips Curve. You cannot make any automatic evaluation over wage effects. Monopsony is typically modelled with full employment. And bargaining power is crucial in delivering standard upward market pressure. Without that bargaining power, increased economic activity can simply increase rents (through higher underpayment of those employed).
     
  7. SMDBill

    SMDBill Well-Known Member

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    Ok I will bite...once. Tell me how a labor market at full employment will have diminished bargaining power, sapping potential wage increases as job openings continue to exceed available workers or skill sets. We haven’t operated at full employment in a very long time, and certainly not for any long duration, so I am interested to know just how diminished the bargaining power impact of scarcity will be, assuming we hit it and stay there for a lengthy period of economic growth.
     
  8. Reiver

    Reiver Well-Known Member

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    Bite once? I've actually given the information multiple times. You even went as far as saying you didn't care. There are of course numerous elements to consider. Examples...

    (1) Human Resource Management: Firms will often be able to use 'internal labour markets' which- in terms of hierarchical relations- are not directly related to supply and demand criteria. For example, we've seen in the past how firms- when witnessing greater economic activity through favourable macroeconomic conditions- simply change the compensation at the upper echelons of the hierarchy. At the most crass, they simply increase bonuses to the managerial team.

    (2) Low skilled equilibrium: The nature of the created jobs are vital. Neoliberalism has encouraged greater employment in goods with relatively low income elasticity of demand. These tend to have very little bargaining power (often inflamed through discriminatory 'crowding' effects). They also enable short term rent seeking behaviour without the creation of long term labour contracts.

    (3) Unionisation: reductions in excess supply of labour do not necessarily empower the workforce. Collective bargaining is key in ensuring that greater economic opportunity is shared between profit and wage gain.
     
  9. SMDBill

    SMDBill Well-Known Member

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    You have described behaviors of sometimes. Our economy has employees in all types of situations where companies will struggle with economic conditions, long term outlooks, short term performance metrics, supply and demand considerations, explosive demand growth potential, reserve manufacturing capacity, aging infrastructure, growing competition, cheap products (sometimes) from lower wage nations, and will face human resource dilemmas most managers will never have had to face in terms of scarcity of personnel available to hire, skill sets available, or a combination of both.

    Historically unions are of little value because unions have lost importance with a deluge of workers, growing technology to replace workers, and a generally poor outlook on unions as poor-performance-protectors (at least here in the US). There are simply not unions for most workers.

    Regardless of market forces working against or for workers, the US typically pays higher for scarcity. Many will say that is due to education, but a nurse can now become an RN with only a two year degree, yet enjoy wages significantly higher than the education alone would allow. The skills and capability bring the wages and I would expect other workers would see the same or similar behavior as the economy experiences growing scarcity across the workforce. Perhaps not in the UK, but in the US we see wages increase with demand. Look at the oil workers of North Dakota, requiring sometimes little more than a warm body to earn huge sums because they were starving for labor. Today those workers are many fewer as the demand dried up, but the financial gains by workers were significant. I expect the same if we maximize production and demand outstrips supply capabilities of manufacturers, pushing all areas of the economy to improve.
     
  10. Reiver

    Reiver Well-Known Member

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    No, I've referred to two elements common to most labour markets (importance of human resource management methods; importance of unionisation) and one element common to economies with labour market flexibility.

    But actually very little downward variation in the productivity gap. The only rapid change we've seen has been the gap between CEO compensation and worker wages. That hasn't reflected anything you've mentioned. It does, however, show how- despite the illusion of labour market flexibility- the gains from macroeconomic shocks are skewed towards the minority.

    Nonsense! Historically they have been of great value. They have eliminated poor conditions, ensured more appropriate compensation and, through voice effects, enabled higher productivity levels. They are unimportant today because neoliberalism has made them impotent. Without suitable labour market power, they are unable to suitably confront the employer's rent seeking behaviour. Of course the factors I've mentioned also intensify the problem. Low skilled equilibria typically refers to growth in areas like the service sector, where union power has been curtailed from day 1. Internal labour markets, in contrast, ensure divide and conquer is just as relevant to non-Marxist analysis.

    Where's your empirical evidence? Present author(s), title, journal and page numbers. Please make sure you factor in those internal labour markets (which create artificial scarcity through hierarchy independent of division of labour criteria).

    Education has human capital value, but it is also used for screening purposes. That fits with the nature of the internal labour market too, as there needs to be a mechanism to legitimise the lack of promotion opportunities for those lower down the scale.

    I'm not interested in what you expect. I would be interested in something which went beyond the standard Phillips Curve type tales.

    Prove it! Let's take an industry in isolation. Show that wages follow the business cycle in manufacturing.

    No one suggests supply and demand has zero relevance (although you attempted to suggest that when you went off on one on the perceived irrelevance of monopsony). I want you to show something more significant: e.g. that the productivity gap narrows with low unemployment rates; that industry wages naturally follow the business cycle etc.
     
  11. SMDBill

    SMDBill Well-Known Member

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    Nope, you get to request nothing as you still haven’t provided the information I asked for oh so many posts ago. You don’t get to turn it around on me now without doing so yourself.
     
  12. Reiver

    Reiver Well-Known Member

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    A rather childish response. I've actually responded to everything you've asked, providing numerous supporting evidence. I've told you, for example, that all firms have monopsony power. I've told you that its a labour market issue (to measure it at firm level you'd need the firm to use random sampling at the market level that somehow encompassed all of its workers).

    You've made a big deal that you're interested in certain aspects of the employment problem. When asked to actually support your argument you can't. Tut tut!
     
  13. Longshot

    Longshot Well-Known Member

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    Employers have no more power over wages than employees do. They both must agree to a price before employment can commence.
     
  14. Maximatic

    Maximatic Well-Known Member

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    Dude, that's just not true.
     
    Last edited: Jan 8, 2018
  15. Longshot

    Longshot Well-Known Member

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    Really? Explain.
     
  16. SMDBill

    SMDBill Well-Known Member

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    Actually I can, but I won't because you want to talk at a macro level and I've asked you to drill it down because you claim underpayment, monopsony, potentially no real upward pressure on wages, "need" unions, etc. You don't provide specific details as asked. You provide theory about minutiae, phenomena and forces, but not tangible data at the worker level that in any way relates to the topic I was discussing. If you cannot, and you know you cannot, then you really ended the discussion many forum pages ago. I just dragged it on and you kept trying to wash, rinse, repeat. Good day.
     
  17. Reiver

    Reiver Well-Known Member

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    I gave a very obvious request. However, I know you won't be able to provide the evidence. Happy for you to pretend that you can. It makes me smile at least!

    False! I've told you why your request, which was really asking for traditional monopsony example, was illogical. I've confirmed that by referring to how the analysis, where I told you precisely how underpayment is measured, can be adjusted to the firm. Given its a market phenomena (as we're referring to labour supply for all firms), you'd need the firm to randomly questionnaire a 100,000 or more people (to ensure its representative, but includes a sizable population of its employees). A silly ask don't you agree?

    I'm not going to allow you to get away this fib. I've given both theory and empirical evidence. I've adopted appropriate economic methods. To suggest its purely theoretical, when its a reaction to empirical findings and tested using labour force surveys, really isn't cunning.

    Let's summarise. Despite the fact that I've constructed an economic argument with empirical support, you've deemed it to be irrelevant to your argument. When asked to support your argument, you've run. Chortle, chortle!
     
  18. SMDBill

    SMDBill Well-Known Member

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    Yeah, read through the thread again at how many times you dodged and we know who ran, regardless if you keep posting. I don't have to get away with anything. You're unable to answer because your argument is non-applicable to the discussion at hand. I couldn't care less if there's an impact on wages due to monopsony because I cannot measure or change it at the level I am discussing. Until I can, it's just "there". You may as well say there is air and we will breathe it. Given. Bravo.

    What you created was an argument nobody else cared, or cares, about, within the context of the discussion. I tried to get you on topic, but you strayed to keep up your charade of caring about the specific conversation. Phenomena are simply meaningless in a forum discussion if we can't estimate a future impact, do something specific to change it, intervene before it happens, or make plans to adapt to it. Just discussing the fact that it's there is your bag of tea and I encourage you to find an economics professor who cares to play along. Or perhaps undertake a study to better define it than our predecessors so that we CAN apply it to a conversation like this. Don't just tell me it happens.
     
  19. Reiver

    Reiver Well-Known Member

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    Again I won't let you fib. I've responded to everything. You made it clear that you were referring to traditional monopsony. You told me that when you said 'refer me to an example'. You demonstrated it when you referred to mining towns to the fake libertarians. I've made it clear how you are wrong over the source of monopsony and how it is a market problem and therefore needs a market level empirical analysis encompassing all relevant firms). I didn't of course just say that. I also referred directly to the stochastic frontier methodology which enables the researcher to come out with a clear average underpayment measure.

    Indeed. We've both accepted that you will not support your argument with evidence. You pretend its won't, but I know its really a can't!

    You've already tried this red herring. It is ludicrous to suggest that such an important element into wage determination is irrelevant to a discussion about wage determination. I even had the good grace of ensuring you were able to amend your understanding of full employment (given monopsony necessarily increases the equilibrium unemployment rate)

    I of course freely admit that right wingers have little interest in understanding the nature of the labour market. That is rather relevant to the thread's title, don't you think?

    No, you tried to just talk about stuff that you're comfortable with. When asked to actually provide empirical support (standard stuff in economic analysis, don't you think?), you've refused. Indeed, this very post is merely the result of you trying to justify a non-economic approach.

    This doesn't say anything. I've referred to the importance of monopsony (and how the failure can at least be minimised). To suggest that gives you a rationale to fail to support your argument is laughable. Come on now, remember your economics! Remember to integrate theory and empirical analysis. Its the economic approach after all...
     
    Last edited: Jan 8, 2018
  20. Maximatic

    Maximatic Well-Known Member

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    Every trader in a market has the power to push the idea of what a given thing will sell for in one direction or the other. Actors who trade more push that idea more than those who trade less. Any given employer probably trades more than any given employee, so any given employer must have more price-making power than any given employee, in all probability.
     
    Last edited: Jan 8, 2018
  21. james M

    james M Banned

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    how can it be important when your only example is Apple our biggest and most beloved company. Why don't you tell us how a libcommie bureaucrat would minimize Apple's failure!! I'll hold my breath!!
     
  22. Old Trapper

    Old Trapper Banned

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    Sorry I did not get back to you earlier, however, the sniveling snowflakes in here got me banned for two days.

    And I do understand the difference between earned, and unearned, and I know that the wealthy "earn" very little of what they have, and when thery are given even more by the government it is not "earned". We call them incentives, subsidies, tax breaks, etc.

    If your pay at USDA was welfare, perhaps you should have worked for it instead.[/QUOTE]

    As I said, and if you had paid attention, it is a form of "welfare", and when paying taxes on that income you are simply returning a small part of the wages given to you by the taxpayer. As for your small business, that would be a legitimate tax, and as I understand the new tax code one that you will be taxed on at a lower rate.
     
  23. Baff

    Baff Well-Known Member

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    Everything is earned.

    If I give something to my son, he didn't earn it, I did.
    It was still earned.

    This is not justification for you to steal from my son, or by extension the person who earned it, me.
     
    Last edited: Jan 10, 2018
  24. james M

    james M Banned

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    If so why not tell us how you know that? Since you’ve decided they didn’t earn it does that mean a lib commie government has the right to steal it from them and use it as the libcommie govt pleases even though it certainly did not earn it?
     
  25. Reiver

    Reiver Well-Known Member

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    Chortle, chortle, monopsony power my definition
     

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