less pay = more jobs?

[kpete]

[IndyPragmatist]

1. I know you are trying to make a point, but that is an unquestionable economic law

If you have $100 to spend an hour on labor, you could hire more workers by paying them less.

You could have 5 workers at $20/hour.
10 workers at $10/hour.
Or 100 at $1/hour.

The thing that really frustrates me sometimes, is that SO many people don't understand the fundamental principal of economics..."ceteris peribus". Often when economics are discussed, people ignore that and throw in all kinds of random variables to "prove" their point, when they aren't proving anything. They are creating a completely different situation and making a statement on that.

Which is where I predict this thread will go.

[ret5hd]

2. So, you are saying that if an employer needs 1 more person,

that employer will, out of the good of his heart, hire 2 persons if we allow him to cut the first persons wages by half?

[IndyPragmatist]

7. If an employer has a fixed amount of money for labor costs,

A worker will always be hired if that worker can produce a profit for the company. Theoretically, this would mean that you would always hire someone even if they only produced a profit of 1 penny. Some would hire this person because they aren't hurting the company and it helps another person. Some would not because they don't think the effort of interviewing and hiring another employee is worth 1 penny.

The attacks on business have gotten out of hand by many. There are obvious cases where banks and such have ripped off customers and employees to make huge profits, but that is not the norm. It's amazing what a few pundits on TV can convince millions of people to think.

The economy is not a zero-sum game. But you would never hear some admit that.

[ret5hd]

9. Where did the increased demand come from?

[PassingFair]

19. In ACTUALITY, however...no one will go throught the HASSLE

of having an employee if it nets only one penny profit.

I hope no real business actually hires someone with
so little critical thinking skills as you are demonstrating
here.

What am I saying? You'll probably graduate from the
Chicago School and go on to ruin economies across the
globe.

:crazy:

[IndyPragmatist]

21. You are right

Which is why you have to look at some things beyond money. Time has to be factored in. If hiring a new employee only took 1 second, sure, I'll work one second for a penny.

If it takes 1 hour, no thanks, 1 penny isn't worth an hour of my time. It would be ideal for that person to be hired because everyone really would benefit in the long run. The worker would have a job, and the employer would have more profit. However, many businesses like to have a little bit of "wiggle room" around the margins to stay safe from economic downturns.

And actually, I mistakenly didn't put a time frame with that 1 penny profit. If that penny profit is each week, then its more unlikely that they wont get hired. But if that is 1 penny per hour, its a little more appealing. A penny a minute, and I am hiring that person. (This example would have been easier had I used $1 dollar, but you get the idea)

[PassingFair]

3. You're no Henry Ford, are you....

@$1.00/hour: No one will work for you = no work force.

@$10/hour: Unable to make a mortgage payment, workers with any intelligence will leave at the first sign of better wages = spotty work force.

@$20/hour: Semi-skilled and unskilled workers will be able to live modestly = stable work force.

@$100/hour: If you need one person with special talents or specific education to do necessary work, this will work. Think you can pay this person $1.00?


Your "fundamental principals of economics" are neither fundamental nor principled.

[IndyPragmatist]

8. CETIRUS PARIBUS!!

I said it would happen, and sure enough, it happened. lol.

[MattBaggins]

13. FANCY HIGH FALUTIN LATIN PHRASE

Everyone stop now this guy just won the intertubes.

[IndyPragmatist]

16. that is essential to economic discussions.

if you do not, you get crap like this thread. People make random statements and throw in variables to make a point.

What about the CEO pay? That was not in this discussion. That is being held EQUAL!

Where did the increased demand come from? ALL THINGS ARE EQUAL!

The situation did not change, but you want to throw in changes to it so that you can make your point. That isn't how things work.

That's like budget projections. They claim that in 2018, we will see 6% GDP growth which will allow huge tax receipts, allowing for a balanced budget.

[PassingFair]

17. Yes, he shall rise ad astra per alia porci...

I think he/she must be a college freshman.

Let's hope she/he moves on to Ayn Rand and
gets it over with quickly.

[IndyPragmatist]

24. And Latin is a very useful language to know...

I use my knowledge of latin (I took 2 years in college) much more than most people who took French or Italian. I use latin multiple times a day. If I come across a word I have never seen in a report, I can get a good idea of its meaning through latin roots. They say Latin is a dead language, but it's used everyday by billions of people without them even knowing.

[EstimatedProphet]

4. Employers don't hire workers just for the sake of hiring them

They are not going to hire anyone unless they can make a profit - not just expenses, but a profit - off of their labor. So the idea that an employer can hire more by paying less is not very realistic.

[Name removed]

5. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[TBF]

6. And your post is the reason we need unions. nt

[MattBaggins]

12. Paper economics Vs real world application

First when some says "unquestionable" it is always any thing but.

You don't need 100 people to do 1 mans job and having that many will cost you more.

[Name removed]

14. Deleted message

Message removed by moderator. Click here to review the message board rules.

[PVnRT]

23. There is a limit to the labor needed

1. If you're not selling as much, you don't produce as much, and don't need more workers.

2. More workers does not mean the same or more gets done. You can't make a baby in one month with nine pregnant women. Hiring three welders for the price of one doesn't get the structural steel up any quicker, it just means you have three welders of lower skill (because of the lower pay), with two standing around because they don't have any work to do.

3. The vast bulk of purchasing in this country is done by the working and middle class. If they have less money, they buy less. Less needs to be produced, so fewer workers. And the cycle continues.

It is not an "unquestionable economic law," as you put it. What you're proposing is simplistic nonsense.

By the way, it's paribus, not peribus. If you're going to act like you're smarter than everyone, try checking your spelling first.

[Liberal In Texas]

26. Well said. n/t

[Courtesy Flush]

10. Yes.

Because you'll need three of them.

[ck4829]

11. How come we're starting from the bottom? Why not cut CEO pay instead?

[gkhouston]

22. Shh. We're not supposed to even whisper that possibility.

They need every penny of their millions.

[laundry_queen]

15. Taking this shit in school right now, econ 101

I think it's crap, myself. In the model I'm learning about they use labour hours as a measure of 'amount' of employment and say that at minimum wage, which is higher than equilibrium level, there are extra surplus hours which = more unemployment. It's definitely overly simplistic. There's a lot of anti-tax and anti-social program crap in the textbook too. I've thrown the book across the room at least once.

[IndyPragmatist]

18. I know what you are saying, that is 101

I hope that you take more economic classes because it goes much deeper into things. For introductory classes, you often get the sense that everything is anti-tax or anti-social because, economically speaking, you are decreasing efficiency.

However, once you get the basics down, you can start to factor in other costs and benefits. You factor in the benefit of having good roads and good schools in the community. You factor in the idea of imperfect information from the consumer and producer.

If you think it's overly simplistic, then you have alot going for you. For a lot of people Economics 101 is one of the most difficult subjects they will take, for others, like you, it comes fairly easily. I think that should tell you that you have the ability to comprehend some of the more difficult concepts that will come later on. Trust me, econ 101 tends to be very right leaning because it is focused on the basic costs. Higher level classes discuss more than dollars and cents, and when I took those, I found them to be amazing.

[laundry_queen]

27. Thanks for letting me know it gets better.

But let me get this straight - it's not an easy course! lol. I just find many of the explanations overly simplistic. Besides, I'm taking it online, so everything I need to learn I get from the textbook or from my prof's writings online. NOT the same as being in class. I don't know if I will be taking any higher level econ classes - this was simply a 2nd year requirement for my accounting diploma. If I go on to the degree there might be more classes and that's good to know it gets better.

[Fumesucker]

29. Strange that Germany has recorded record exports and a trade surplus..

Socialized medicine, strong unions, strong support for the average working person, thirty days of vacation.

And yet they're kicking our ass economically.

Some people might buy your overly simplistic rhetoric but it's ludicrously easy to point to counterexamples in the real world which show you to be wrong.

[RC]

20. An USA'n text book, correct?

Printed in Texas?

[laundry_queen]

28. It doesn't say

Texas. It does say printed in the USA. But the authors are Canadian-based. It's Microeconomics 'Canada in the global environment'. Right-wing slant apparently exists everywhere! lol!

[NNN0LHI]

25. Less hours worked for the same pay is the better option for creating jobs

[xchrom]

30. recommend