for sure!!! and then you'd know that workers in underpaid industries mysteriously don't move to overpaid industries equalizing the payment levels!
right? just coincidental that the libcommie and Marx come to the same conclusion namely workers are underpaid thanks to free markets and a all powerful central govt could correct the situation at gunpoint as well as 1002 other situations in need of violent correction!!
By what measure would they underpay? Are we talking about tight competitive markets where employers face situations such as aging products (like the home telephone) and companies look to inefficiencies and other tactics to continue or stretch profit margins? If not, I have no idea what your idea of underpay implies from the perspective of companies. Why introduce another variable in a discussion about wages? You can't assume all bargaining unions provide profitable outcomes for workers. Communications Workers of America, for example, has allowed Verizon to now force union employees, who never paid a dime for health insurance over many decades, to now pay a large portion of healthcare. They have also reduced pension allocations. They have left large gaps in the workforce and no longer properly maintain their wired networks, instead choosing the cost-efficient method of losing customers and hoping to utilize the lines of former customers for customers whose lines go into trouble (static, hums, etc.). All of those things together cut the inefficiency of an old, dwindling market as they seek to retain as much profitability as possible during the downhill run.
Below productivity levels, as expected with the 'market wage' The simplest example is job search. That is sufficient for workers to adopt a reservation wage strategy below their worth. Its also sufficient for firms to face an upward sloping labour supply schedule. As you know, that drives a distinction between average and marginal labour costs. Profit maximisation behaviour will then guarantee underpayment. Because it becomes crucial for your time series analysis. As I said, it goes back to Adam Smith and an economic approach which accepted that bargaining power was crucial. Empirical analysis into union effects has a long history. For the US, there has been a tradition to focus on the 'efficient bargain' (where both wages and employment increase).
That just goes with the territory, especially one in manufacturing where a manager has to decide how much to produce and with how many to produce it with. I don't deny that there are labor pressures upon maximization of profit, but that doesn't translate into wage impacts directly, such as lowering or increasing the hourly wage an employee has agreed to earn. It does impact how many hours they work, especially overtime hours, but I don't know of any examples where wages change based upon workload and labor supply. You're talking about a completely different aspect of business than I ever mentioned. It's also far more complex and takes a lot of detail and time to effectively manage. Companies like Toyota have mastered it, but many smaller companies have not. I saw it in action in Toyota's manufacturing plant in Kentucky where they build Camrys. I got into a discussion with an operations manager and he was working the overtime projection for the oncoming shift. He knew they needed exactly 7 minutes of overtime to produce the exact number of vehicles without wasting labor hours or overproducing vehicles, and taking into account short-notice vacations, people calling out sick, production line maintenance requirements, materials shortages (they use JIT suppliers, but they're not always perfect) and other needs. You're trying to make this discussion far deeper than necessary for the sake of "winning" when there's nothing to win. My points were valid, but you added discussion to them to make them appear invalid. I don't have time this evening to continue down this rabbit's hole, but I do concur that the points you made about labor are valid in the context of discussions regarding efficiency and profit maximization.
The worker is willing to accept below his/her worth. The employer, given they have wage making power, will offer below their worth. End result is underpayment. As I said, this isn't disputed. It is after all, a simple reference to supply and demand. Its also backed up by the empirical evidence. We know that, independent of human capital criteria and other factors such as compensating differentials, a wage distribution exists. That distribution merely refers to heterogeneity in the degree of underpayment. I haven't referred to management. That would open up additional questions such as the use of human resource management to further promote source of economic rents (e.g. discrimination analysis). I've referred to a simple profit maximisation decision that will necessarily generate underpayment. It is supported by the evidence, but we of course have to factor in other issues at the firm level. See, for example, internal labour markets analysis (which is used to show, for example, how job hierarchy can be used to control worker bargaining power) A reference to productivity (which of course can actually generate higher underpayment in itself, particularly without union activity) Merely referring to the economics. You've ignored that economics. We see the consequences of that. You stated that tight labour markets will benefit workers. You forgot to mention, mind you, that we're only referring to a temporary reduction in the extent of underpayment.
I haven't ignored anything. You've tapdanced around economic discussion hoping I'd hit on the point you're trying to make but refuse to come out and just say it. I'm playing along, but you just stating companies will underpay is meaningless without context. Can you provide real-world examples where it happend? What forced it to happen in your example? Did the workers in the example have alternative employment possibilities within the market? We need something to discuss beyond theory if you're firm on your point, and a real-world example will provide that needed context. Tight labor markets are only temporary for the length of the tight labor market. Prior to the 1970s when women entered the workforce, the US worker enjoyed long-term wage growth that has stagnated here since that time in the aggregate. If we return to tight market conditions, there is a possibility the upward pressures will lead to wage increases over time. That's something most workers today have not experienced, so there is a climate of hopefulness as the economy strengthens and people hope the unemployment situation only gets better.
Nowhere, because what he's saying is not based on empirical evidence, but on the subjectivity of a third party economist psychoanalyzing employees from a distance en mass.
In the context of profit maximization and operational efficiency, excessive or insufficient labor places pressure on costs for businesses. That's the point as best I understand it, and it's valid.
Monopsony, unionisation, internal labour markets. That's three elements that we know impact on the wage distribution (and therefore the extent of underpayment). The point is obvious: we're not talking about specific examples where a firm somehow bucks the trend and achieves rent through underpayment. We're referring to how modern economics confirms that its actually the norm. That competition does not eliminate it is rather important. Basic error here! I've already given you a source that effectively shows that underpayment is the norm (given that wage distribution independent of human capital criteria). To suggest that this is theory and not real world lacks any credibility. I'll repeat: supply & demand predicts the phenomena; empirical evidence confirms it. Take, for example, Britain. It has seen rapid reduction in unemployment. It hasn't, however, seen any significant wage gain. That of course reflects the nature of the reduction in unemployment: a structurally flawed economy characterised by a 'low skilled equilibrium' and a Thatcherite history of demolishing union bargaining power. Tight labour markets will, ceteris paribus, increase wages. But there's no notion that it eliminates underpayment. In the case of Britain underpayment has actually increased.
I didn't ask for economic terms. I asked you to point me to an example we can discuss, and whether real world examples play out or not. Monopsony is meaningless in this discussion, and unionisation is arguable at best. Labor markets were my point. No, we're talking about an economic situation like the US is going through today that may lead to full employment and even a shortage of labor, pushing wages upward. The rest has been you arguing against me. You gave me a source on economic theory. I'm talking the reality of low unemployment. You can join me or we can just stop here. Reduction in unemployment wouldn't necessarily have any impact on wages, nor should it. Even significant reduction is meaningless if, for example, you go from 30% unemployment to 20%. That's significant, but non-impactful for wages. It's easy to "underpay" in loose labor markets. Does Britain face full employment with downward wage trends? It's easy to pay less when there's an excess of workers with the skills needed, which is what has happened here in the US since the 1970s except in high skill or low worker areas.
Given its an economic issue on an economics forum, it wouldn't be cunning for me to ignore them. Again, you show no merit in your argument here. Monopsony is a reference to the characteristics of labour markets (its also one that can't really be disputed). Unionisation has to be mentioned, given your focus on bargaining power. Given the US suffers from the productivity gap, it wouldn't be cunning- for example- to suggest its somehow distinct from supply & demand theory (monopsony). Remember also I've referred directly to how the US has been studied. In Union analysis, the US has been closer to efficient bargain and the UK has been closer to right to manage. Relevant economic analysis which is needed to understand labour market outcome. Nope, it also refers directly to empirical evidence. The theory is a reaction to empirical findings. You're not though. I've illustrated that with the British case study. Without reference to the economics (for Britain that has to refer to a lack of union power), you cannot explain how underpayment has increased despite unemployment falling. You're showing inconsistency here. Reduced unemployment should means greater bargaining power (and therefore wage gains) Again, I can't agree! Even with those significant figures we'd expect bargaining effects (given aggregated figures will miss the variation in tightness of specific labour market) I don't know of any empirical evidence that suggests underpayment is restricted to loose labour markets. It also wouldn't be consistent with labour economics. The factors deriving underpayment continue in all macroeconomic conditions. Its unemployment rate is 4.3%. That is historically low, but still during a period where real wage growth has been poor (i.e. its flat lined and workers are worse off today than in 2010)
No, but it would help to define why you feel them important in this discussion rather than just stating them and hoping I fall on your reason. In the context of a tight labor market in the US, where do you identify monopsony having an impact upon wages? In your words so I know you understand why you're using the term. Unionization is meaningless in a tight market. Perhaps there could be sporadic impacts that a union could make, but most are dying and less impactful than they were historically. You still haven't made a point. Tell me in your words HOW that relates to the discussion to present an opposing view. Referring me to economic theory is non-impactful without reason. I'm well aware of economic theory, but it would be useless to just present theory without reason. So take a moment and point it out. Be very specific with examples everyone can relate to. So far this has been an exercise much akin to an economics professor baiting students with minimal information to progress discussion, yet you are the only one on your side who even knows what your point is and you haven't made it yet after many posts. If you don't have specifics, then just let it lie here. Yet it doesn't. If employers still have large numbers of subjects to choose from, what difference does it make if they have 50 or 60? Until they have far fewer, the raw number doesn't matter because it's still far in excess of need. Where do you expect bargaining impact in the US? Our unions are weak, few and largely unnecessary. They won't have much power in the UK either if you have far too many workers for the jobs available, or too many available skills for the types of jobs available. You haven't yet presented one case where your theory holds true for us to even consider. Then you have other factors at play or employers are still able to draw from those who previously left the workforce (retirees, people who gave up looking, etc.). There has to be an available pool of employees or it would drive up wages as they try to lure workers from other businesses. There is also a time delay between when the rates drop low to when employers are squeezed and give in to the new pressures of hiring, where they push wages up to compensate for an inability to attract talent.
Already said: all are about the extent of underpayment. Again, you're after repetition. We know the definition of monopsony: its a reference to labour supply elasticity such that firms have wage making power. That elasticity doesn't go away in a tight labour market (given the criteria behind it, such as job search frictions, are maintained). Its also pertinent to note that job search modelling, which isn't based on any Keynesian analysis into involuntary unemployment, actually predicts that the equilibrium unemployment rate will be higher. Essentially what we mean by a tight labour market will refer to higher actual unemployment rates! That wouldn't be something agreed in classical theory. Its also not accepted today. I've referred to Britain for a reason: a relatively tight market that has actually seen deepening underpayment (and underemployment) problems because of the lack of power of its union movement (which is artificial because of anti-union legislation imposed by Thatcher and then further strengthened through the various neo-liberal regimes demanding greater labour market flexibility). Again, it isn't just economic theory. It is supported by empirical evidence (and arguably was a reaction to the failure of old fashioned labour supply and demand in understanding labour market outcome). And you haven't actually got an opposing view. You've simply started from a point where you haven't factored in appropriate labour economics. Already referred to the evidence: the market wage doesn't exist. We have an inefficient wage distribution. I've been very clear. I've combined economic theory (which you ignored in your first comments), empirical evidence and case study. In my days of being a student, all those years ago, that was standard expectation. Of course I've gone further than that. As an old fart, we didn't know much about monopsony back then (only referring to the nonsense of 'company towns'). I've had to update my knowledge to maintain my business success. Knowing how supply and demand operates is a blessing. Mind you, that also includes employing economists to measure aspects such as underpayment as I can't be arsed. Already said that high unemployment rates will ignore, for example, specific skill shortage issues. However, its of course more than that. You've essentially assumed that bargaining power is binary: you either have it or you don't. That isn't consistent with reality. Whilst I hate the Phillips Curve nonsense, even that appreciated that point! I don't expect union power in the US. They have operated differently to the UK (as shown by the efficient bargain evidence). However, both countries suffer the consequence of neo-liberalism Again, its a reference to supply and demand. Its a market phenomenon. Its not like 'company town' analysis where we refer to specific firm. All firms have wage making power. That is just basic sense, given all we need is for job search frictions. I've already told you what is at play: a market where worker bargaining power has been drastically limited. That unemployment is low doesn't matter. It just means that more people are underpaid!
I still don't know WTF underpayment is. In the world I live in anything under or over, greater than, less than, they're all relative, with respect to something else. What the **** is under-payment under?
Of which you cannot provide current, known examples in the US. But you're going after a real situation from a theoretical standpoint about the monopsonist and the impact on the wage rates. What it ignores is the heavy competitive nature of business in the US, which does negate impacts of monopsony because one employer cannot determine wages across a market. And since I never mentioned declining competitive markets, I'm not sure how it got into the discussion in the first place. And you knew, or appeared to understand, from the onset of my current discussion that by tight labor market I meant the difficulty of companies to find large pools of qualified candidates. Sure I have an opposing view. We don't have perfect markets, so monopsonistic behavior is still theoretical, just as "perfect competition" is as well. I can't put into context the real impact of monopsony so, again, I don't know why you find it so important. It's a perceived undervaluing of wages, but with consequences to the company setting the wages if they're too low. But if we can't quantify its impact to my discussion about full employment and wages, what's the point of discussing it ad nauseam? I was trying to keep my point basic for the sake of discussion. However, if fast food companies cannot get low wage, unskilled workers, they too will have to raise wages to try to attract them. It's not binary, but we also have no shortage to be concerned with. In the IT industry, though, that is not the case. That was my point. Ok, please quantify it with valid metrics applicable to US workers. Otherwise, we're playing merry-go-round with theory that can't be applied real-world. I acknowledge it exists. Please quantify it or let's move on.
I know. He's starting to remind me of the restaurant manager on that show, "Curb your enthusiasm "(I think.) He never answers questions. He just tells you that they're working on it.
