
Supply-demand model of labor markets is broken, preventing pay raises - dgudkov
http://www.businessinsider.com/supply-and-demand-model-of-labour-markets-is-fundamentally-broken-2018-6
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pascalxus
They mention, as evidence that the number of people looking for work is less
than the number of job openings. I would argue that both of those numbers are
flawed.

First of all, Having a job opening doesn't mean you urgently need a position
filled. I've seen companies post the same job opening year after year after
year, and get hundreds of applicants and still never hire anyone. Someone i
know, (a data analyst) would often apply for these jobs, never ever hearing
back or getting any kind of feedback on what they're looking for. There simply
isn't any need, the posting is just there because someone forgot about it. If
these companies were at all serious about hiring anyone, they'd at least get
their career section of the web site straightened out.

Second, I think the total number unemployed may be miscounted. I know the
unemployment rate number has huge problems.

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lemoncucumber
> Second, I think the total number unemployed may be miscounted. I know the
> unemployment rate number has huge problems.

Maybe you’re referring to the fact that it only counts people who are actively
looking for a job, and ignores those who would like to have a job but have
given up looking?

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unimpressive
" As I've noted before on Business Insider, the part-time gig economy has
broken a fundamental link in capitalism that was good for workers. Pay rates
no longer move upward as unemployment moves downward because companies like
Uber, Just Eat, and Deliveroo can switch their demand for labor on and off on
a minute-by-minute basis. Self-employed folks making a living on Etsy, Amazon,
Airbnb, or eBay know their clients instantly go elsewhere if they raise their
prices by even a few pennies."

Anyone who's studied the basics of Econ knows that this situation is called a
Perfect Competition (as evidenced by nothing less than the admission of
perfect elasticity of demand). It's not just that employers became 'more
powerful', individual workers became more powerful in the sense that startups
have been intruding on economic fiefdoms. What used to be monopolistic
competition or even oligopoly (e.g news services) is now facing fundamental
market structure changes that bring the cost of labor down to its 'true'
value. It turns out the 'true' raw economic value of a lot of labor is what it
would be under serfdom: subsistence wages. This is to say that individuals
have become more able to enter previously restricted markets, with the
consequence that few of them pay very well.

(Exercise for the reader: Consider the correlation between the implicit class-
signaling based monopoly of higher education and its effect on wages compared
to the rest of the increasingly competitive malthusian economy.)

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ponzored
Cut social security and payroll taxes, deliver money right back into the hands
of the workers. If more people are employed the need for these services is
lessened anyway.

With advances in medical care, people can keep working until they are 70 or
80, at a lower rate eg. part time. Work keeps the brain active and prevents
degeneration.

Finally reduce the cost of land and rents which is the major cost of life for
the majority of workers. Do this by limiting immigration and keeping the
country at a stable population, not growing endlessly.

If people truly need welfare or Government services, such a subsidised
tuition, healthcare or a cash handout, then tally the paid amounts against
their individual tax file, and claim the amounts back by increasing their tax
level by single digits. If there is still an unpaid amount at death, then
claim it from their estate.

Doing all this you can substantially cut the welfare state and encourage work.
The end goal shouldn't be a UBI or negative income, it should be that 20 hours
of basic work should be enough to allow you to afford a basic life.

~~~
hekfu
And how do you address the massive injustice in wealth and opportunity
distribution already present because of centuries of capital and power sharing
the same bed? I'd be all for your proposal if it included a way to nationalise
all capital above a certain threshold, bring everyone to that threshold and
then distribute the rest based on merit. But I don't think that is possible.
But your proposal assumes not just a just world, but that the world already
has been just for 100s of years

~~~
ponzored
Ah yes, I have a solution for that. Link tax breaks to having children, and
penalise the childless wealthy. Eventually society will be mostly comprised of
the descendents of the successful, and inequality will be reduced.

Millionaire parents having one child concentrate their wealth into a small
part of society. They should instead be having multiple. Success and
intelligence has a genetic component, so you're improving the overall health
of society through such measures as well.

Otherwise there are far less radical things than breaking up and dividing
wealth (which has worked horribly in the past - look at the USSR). Simply
breaking up large monopolistic tech companies such as Valve, Google and Amazon
for example, as was done for Bell Telecom.

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avmich
I'm often amused looking into simple solutions for complex problems. Sometimes
though I'm tired reminding about the pitfalls on this path.

What you propose is not particularly well supported by explanations. There are
examples in the past (I'm omitting them) when such an approach lead to bad
things.

