Government Sponsored Jobs Program

Oops, I explained that incorrectly. The worker would create more products for free, so the business owner could lower prices on that product, and the lower prices would raise demand. Unless the raised demand is very high, it won't cause prices to increase

Alright, so now where are you on this program?

 

Ok, now how is the internal labor market hurt by my program? (although since you helped shape it, you could also say it's partly your program to, if you wanted )

 

The problem is that we simply cannot understand the internal labour market. We can of course utilise case studies and see how individual examples operate. We cannot, however, develop a programme capable of successfully integrating with the huge number of organisation-specific systems. At best we create 'noise' (where the police fails but costs); at worst we create 'unfortunate' incentives (be it money that shouldn't be used or be it corruptions to the training systems that go hand in hand with internal labour markets). Either way we will be in a situation where we are subsidising the 'rich' (be it the organisation itself or the 'good job' worker) with the 'poor's' cash (through tax demands)

 

Another basic error! You haven't made a distinction between a shift in demand and a movement in demand. A supply shock, for example, can increase quantity demanded and lower prices.

We again see that you just don't understand the basics!

 

There's no mask. I've been upfront and frank about what I am and my knowledge gaps. To pretend otherwise would be utterly dishonest.

But have yet to explain how or support it with empiricism.

Seems central to the notion of creative destruction. Some folks, such as the farmer and the factory worker no longer have skills that are necessary due to trade or technology, you can't cast a spell and re-align their skills.

[quote[]To call middle men entrepreneurs is nonsense[/QUOTE]
How's a merchant who sells other people's wares any different? He hasn't made any of the goods, only reduced the costs of acquiring them.

Says who? In either case, since the goal is artificial and the resources used are real whatever may have been gained will be competed away. It's an auction where all the bidders pay and more money is lost in the competition than was originally available.

 

No, I meant a full paycheck for doing nothing, just as farmers are paid to let fields lie fallow.

 

Your comment reminded me of 'you' 2 years ago.

You've been given the original research into wages councils. It comes from the likes of Dickens, Machin and Manning.

Completely different issue! You'd have to make some reference to specific skills and deny human capital is fungible in nature.

Its not based on creating inefficient economic rent.

 

Every comment I make should remind anyone of me. I may have learned some stuff but I'm still the same IT dude who finds economics somewhat interesting.

Perhaps I overlooked it, can't really say any more on it since I'm not familiar with it. I admittedly go into it with a great amount of skepticism though.

I have made a reference to very specific skills. Web developers suffered a similar fate, as the carpenter, the farmer and the factory worker. Fortunately web development translates well into other jobs, many other job skills do not

Redundancy; you've made the claim multiple times now but have yet to elaborate on how and who you're talking about.

 

It shouldn't. Given some economic knowledge you shouldn't have any resemblance to that previous version.

The empirical evidence confirms what I've said: there was a reduction in inefficient wage differentials and therefore employment gains.

Given your reference to creative destruction I don't think you've made any coherent comment.

I've made it very clear. Comparing a middle man aimed at abusing the self-employment tag to standard merchant behaviour wasn't too cunning

 

Then no one would get a job in the economy and it would collapse our production.

 

I suppose this is where you'll blame Thatcherism for their abolition? In either case, I'd prefer some type of collective bargaining arrangement to bureaucrats with incentives tainted with democracy.

You're deflecting. Even if there was a mis-step in jargon, the message was clear; some job skills cease to be useful in the job market and you've made a concerted effort to avoid addressing what to do with those individuals.

You most definitely have not. You made a vague reference to psuedo-self employed construction jobs but have yet to put your thumb on what job specifically despite me tossing the general contractor nugget out there. So, is that who you're talking about? And more importantly extrapolate on precisely how this individual is extracting rents from those he either employs or contracts with.

 

Eliminating them was idiotic.

Collective bargaining produces its own problems, particularly given bargaining strengths will often favour one worker at the expense of another

There wasn't a "mis-step in jargon". There was a complete misrepresentation of the argument. That misrepresentation is either deliberate or because your argument lacks a backbone. I'm going with the latter.

I've referred to the consequences for both wages and training. Once we have middle men the whole labour market is corrupted by, for example, housing bubbles (given those bubbles, together with land 'banking', will also impact on the available inefficient economic rents)

 

So your hypothesis is that the elimination of the wage councils (along with other factors I presume) has lead to the widening wage gap?

At least their at the bargaining table. In either case your relying on representation, so it comes down to who's more likely to stand up for the interests of the worker. The union boss or the politician.

Deflect deflect deflect.... My argument: Some part of unemployment is attributable to skills that are no longer as desirable. Saying that has no backbone is quite frankly dishonest.

This is frustrating. You're refusing to get to any specifics. Consequences without casual explanations, why does this middle man corrupt the market while others are just agents who reduce the costs of contracting and transportation? What makes the middle-man you keep referring to (in vague terms) all that different from any other middle-man.

 

It isn't a hypothesis. Its an empirical result from a hypothesis.

There is no attempt at responding to my comment. Collective bargaining is problematic in itself as there is a zero sum game at play: i.e. one worker benefiting at another's expense.

Comparing it to creative destruction was silly and continues to advertise that your argument isn't at all well thought out. You didn't of course have much to work with, given your whole retraining argument was weak as pish.

A silly response. I've referred to economic outcome (i.e. accentuation of wage underpayment and deterioration in training systems) and also provided an understanding of how that is derived. Compared to your "let's retrain (like every other clichéd bobbins government always says)" its decidedly complete!

 

Of course human capital is NOT fungible. The population has a range of intelligence, interests, education, experience, energy level, talent, etc. The combination that makes up a good CEO is very different than the combination that results in a good elementry school teacher. No matter the amount of training, neither could do the others job as well.

There are skills that take years to develop. A great auto mechanic can't immediately do what a great machinist does, and vice versa.

 

Maybe we won't fully understand the internal labor market, but we can consult our economists, and if they don't catch anything bad about the plan then I say it's good economic experimentation.

Now that I think about it, for a person in the economy, this won't increase the amount of taxes he or she pays. This is because your putting the equivalent amount of money that you tax into the economy. Thus the poor won't have to pay for it.

 

The point is that our understanding is all ex-post. Its through case study that allows us to understand, for example, why a specific organisation has succeeded or failed. We'd need something ex-ante. That isn't going to happen!

This isn't correct. There will be a tendency towards subsidising higher waged workers. That will certainly lead to something akin to a regressive tax

 

You'd have to argue that all human capital is 'specific' in nature. That would be a particularly cretinous argument. You seriously going to try and suggest it?

 

?!? So you believe the auto mechanic, machinist, elementry school teacher and CEO can trade jobs easily? Now, that would be a cretinous statement!

 

A stupid reply. Please respond to my comment: are you seriously arguing all human capital is 'specific' in nature? (if not, please condemn your previous ludicrous comment)

 

Why would the worker create products for free? The worker surely would be paid a wage.

 

The government pays the worker, so for the business it is free labor.

 

And to pay the wage the government must increase taxes (within the confines of my example with a stable money supply). So demand has simply been shifted away from other sectors and jobs to the creation of a new job.

 

but tax income is increased by the printed money going into the economy. The same amount of money stays in the economy even with the new taxes. (this answers Reiver's question too)

 

I said with a stable (meaning not-changing) money supply (we are still discussing the example I gave earlier, where you were explaining why deflation would occur). If the money supply does not change with the creation of the new government-funded job (meaning it is funded through tax increases) do you agree that demand has simply shifted, not increased?