Amazing how often "unskilled" is used to describe those whose skills are merely low on the social prestige scale, or who are ill-positioned to ensure that they & their peers get an oversized slice of the economic pie...
If you hold everything equal, then changes in supply work that way. But everything else is very far from equal across different types of job, enough to make supply-based calculations basically useless.
Seattle recently tried to set hourly rates for gig delivery drivers. It resulted in a collapse of that business, as prices went so high the demand dropped and the drivers made less.
Sure. But the mechanism of that arbitrage is mostly that training changes to match demand.
If demand drops for an uncommon/rare skill, then you can get an oversupply that lasts for decades. Wages can drop a lot despite the skill still being uncommon/rare.
My training is as a mechanical engineer, but I switched to software because it paid a lot better. I did not have a formal education in computer science, but my abilities as a mechanical engineer made the transition fairly easy.
In my younger days, the best programmers were usually physicists.
Markets use prices to work out where supply and demand meet. Sellers control the lower bound (if the price is unacceptably low they can't stock the good), buyers control the upper bound (if the price is unacceptably high they can't buy the product). If upper > lower then there is a complex dance to work out what the price is going to be today.
It doesn't matter how much data you scrape from sellers, you can only ever work out a lower bound price for goods. That isn't enough for even a super-intelligence to work out how much of that product is needed. You have to let a real market play out to figure out what prices should be. It isn't a question of processing more data from sellers before a centrally planned system can work, central planners literally can't have all the data until after the market's auctioning process has played out.
You can make reasonable guesses, but the supermarkets already do that. The goods on the shelves don't appear by coincidence, a lot of thought goes into it. Central planning can only do that well or (usually) worse.
Back in the Carter era, the DoE handed out gas allocations to gas stations. Their strategy was to allocate according to the pattern of sales from the previous year.
Of course, this didn't work at all, and the country was a checkerboard of gluts and shortages.
Central economic planning has proven to be inept at handling the chaotic reality of actual markets.
That’s pretty clearly a data quality issue though; I don’t think this result necessarily holds in the case of better data.
Besides that, we don’t even have “actual markets” - take a look at all the places we’ve extremely distorted things; farm subsidies, for example. Do we have more than enough food, and is it cheap enough?
We’re already funding this stuff, and distorting the market - then playing pretend that it’s all fair competition by closing our eyes and saying “central planning doesn’t work”.
1) A subsidy isn't central planning. A key feature of central planning is having a plan that the market participants don't mutually want to follow anyway [0]. A subsidy is the government interfering but as a market participant. There is a spectrum going from [free market] -> [some interference] -> [central planning].
2) It wasn't a data quality issue. It doesn't matter how good the historic data is, they couldn't possibly have predicted future demand. Future demand isn't a function of past data.
3) If you think central planning is going to work, you're going to need an argument for why to have a meaningful conversation. At the moment you're claiming it fails due to data quality issues, but there is no evidence that the central planning failures are due data quality issues. Central planners are limited by the fact that the market-optimal price point for a product is unknown until after the market has cleared, and the market can't clear properly if supply is constrained by a central plan because there will be either a shortage or oversupply. That dynamic doesn't change by having better data, the problem is that the plan prevents the data needed from existing.
[0] In theory I suppose you could have a central plan where you just copy Walmart's existing internal quarterly plan, tell Walmart to do that then don't enforce anything if the situation changes, but that'd be pretty pointless even by government bureaucracy standards.
The mistake make with such data is that it can predict the future. At best, if the data is fairly accurate and complete it is only a good indicator of the past.
The fundamental flaw of central planning at scale is that a small number of people will sustainably predict the future well enough to plan better than if they let individuals make decisions for themselves.
The network of central planners is astronomically smaller than individual companies acting on their own for their own success. A central planner wouldn't know how to begin to use all that data because their motivations would be to make the impossible reality rather than let the ecosystem of the market thrive. They can say that's what they want, but their day to day would be to control the economy as a whole.
Well, if you've never known an entitled "idle rich" person, nor worked at a high-skill company taken over by vulture capitalists, nor found yourself bound by a malicious non-compete, nor been a member of a "lesser" gender or caste, nor ...
The law you mention is very nice, on paper. In the real world, there are a very large number of people whose interests it runs contrary to. And those people control quite a bit of our social, economic, and political systems.
Ah, Economics theory. Where you know the thing lying on the sidewalk can't be a dropped $20 bill, so you don't even think about picking it up. And Pinkerton's goons have never done anything bad to workers demanding higher wages, and the Tulsa massacre couldn't possibly have happened, and the AMA can't be limiting the supply of MD's, and ...
That sounds like you are projecting like IMAX about economics and assuming that it simply must be loaded with denial-ism of anything bad that ever occurred under capitalism.
Do you have any examples of industries that operate as a free market, one that has never received government subsidies, grants, or bailouts? (i.e. socialism)
One that doesn't abuse the intellectual property system (e.g. patent trolling), or exploit their dominant market position in anti-competitive ways?
When deciding which system "performs better", there are deeper societal factors to consider than just return on investment for shareholders.
I fail to see what the idle rich have to do with supply/demand. Vulture capitalists buying and breaking up companies is very much in line with supply/demand (in the financial markets). As are non-competes (malicious or otherwise) which directly effect the supply of skilled labor. Discrimination based on non-utility factors directly influences supply/demand and thus influence prices of all sorts of things.
Economic theory around supply & demand simply describe how economies work. It does not imply that it will lead to a better life for all. In short, the "law" of supply & demand is about price discovery and resource allocation efficiency. It has no moral or ethical component that you seem to feel it implies.
What the breaking up of companies does is reallocate the resources of an inefficient company to more efficient uses. Free markets are not steady state - they are a chaotic system constantly creating, disassembling, and reallocating resources.
Skills that are low on the prestige scale are unskilled. Skills that pay well automatically rate higher on the prestige scale. Skills that pay poorly are skills that can be easily provided by whoever, which is what "unskilled" means.
I have lots of skills that would be incredibly valuable in an ant context; that doesn't mean they count as "skills" in a human context.
You could even have extremely skilled, moderately paid, but still relatively low prestige. And top of the trades pyramid go to this category. Think of specialised welders, were you need both years of expertise and probably quite a bit of aptitude... And the job is no way unskilled, but still would have less prestige in general population than some simpler job more of white collar type.
There is also the case of the 'outcast' skills which are currently stigmatized. Unless there is a literal caste of people stuck doing these jobs they tend to ironically have to pay better. Porn actresses get paid in part for the 'reputational damage' as even today people are deeply silly/stupid about past work.
Skilled labor in terms of "needs many years training" outcast skills are practically a hypothetical, and are what I would call 'high entropy' in the sense that it would take a lot of work and rare combinations to achieve. Practically an exercise for science fiction writers to depict say, a society where say heart surgery is viewed as deeply shameful yet still managed to perfect the art of heart surgery anyway.
