Note that I said "less than". I didn't see that part of the accounting.
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If companies could exploit in good times we would all be making minimum wage.
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Moving 5% of GDP to labor's share . . . would it hurt the economy?
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Note that I said "less than". I didn't see that part of the accounting.
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If companies could exploit in good times we would all be making minimum wage.
Those "increased costs" are really more layers between the end product and the original inputs. Those more layers pay other workers.
Canard DuJour
Veteran Member
So computerization has increased labour costs specifically. Firms must now pay more workers.
This will come as quite a revelation to ..well, everyone but neoclassical economists apparently.
untermensche
Contributor
That is why US slavery was abandoned.
Notice it doesn't happen until the Industrial Revolution begins.
The masters realized it was cheaper to pay "a market wage", meaning the lowest possible wage, than to actually have to care for the slaves.
Playball40
Veteran Member
What? That doesn't even make sense. Killed some anorexics?
More in the hands of labour would be a good thing, yes. But I also agree that the problems would arise in how you seek to accomplish that. Me, I would do it via a universal basic income supported via taxation. I am weary of minimum wage requirements and I am weary of union moves, because both inevitably hurt a large group of workers.
Harry Bosch
Contributor
How would a "universal basic income" be implemented? Hell, we can't even stop world wide slavery.
coloradoatheist
Veteran Member
So would returning to slavery be a good thing?
coloradoatheist
Veteran Member
He was just making the analogy that if we wanted to cure obesity by saying everyone has to eat 1200 calories less a day, the people who eat 1200 calories would die. So the question is how to only affect one group without affecting the other one.
You misunderstand. I'm not saying it has increased the cost to manufacture a widget. Rather, it has increased the complexity of the supply chain.
In the old days a widget maker bought raw materials and sold widgets. For the sake of illustration lets figure that widget maker's costs were 50% labor, 50% materials.
Now, though, a good chunk of his costs are for widget making machines. His costs are 20% labor, 60% materials and 20% widget-making machinery.
His cost per widget is down--it's a good deal for him.
It's just that labor's share of the pie has gone down because of the extra level--the company that makes widget-making tools.
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They're already on the edge, some will be pushed over it by the highly restricted diet.
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While it's obvious you understood my analogy your reply doesn't make sense.
arkirk
Veteran Member
First, let's forget about widgets. I have lived 72 years so far and have never had any need for a widget. It is just a hypothetical notion economists use to convince others they know what they are talking about. In real life, we have actual needs and one of those needs is sufficient income to clothe, house, and generally support a healthy life for a worker and his family. That is not a widget. That is a need. The widget has to be related to real needs or perhaps we really don't need so many of these fucking widgets.
Through the tax system. Everybody gets a tax credit and for some people, that tax credit offsets their taxes to the point that they get a sizable refund. The infrastructure is already there. I would simplify the tax code while I was at it.
Yes, you'd still have trouble reaching those who don't file their taxes, but now they'd have an added incentive to do so. And those who are in slavery as you say (and yes, slavery does still exist in North America) need to be found and freed by the police.
coloradoatheist
Veteran Member
First, let's forget about widgets. I have lived 72 years so far and have never had any need for a widget. It is just a hypothetical notion economists use to convince others they know what they are talking about. In real life, we have actual needs and one of those needs is sufficient income to clothe, house, and generally support a healthy life for a worker and his family. That is not a widget. That is a need. The widget has to be related to real needs or perhaps we really don't need so many of these fucking widgets.
It's a good question. Because here is a typical scenario and I'm curious how GDP measures it
I have an office with 10 workers, wages are $500K
Computers and software for a year has a capital expenditure of $30K but because it is expensed over 3 years, then the cost is $10K. Revenue is $550K
Revene $550K
Wages $500K
computer expense $10K
Profit is $40K
so how does GDP get calculated?
arkirk
Veteran Member
First, let's forget about widgets. I have lived 72 years so far and have never had any need for a widget. It is just a hypothetical notion economists use to convince others they know what they are talking about. In real life, we have actual needs and one of those needs is sufficient income to clothe, house, and generally support a healthy life for a worker and his family. That is not a widget. That is a need. The widget has to be related to real needs or perhaps we really don't need so many of these fucking widgets.
It's a good question. Because here is a typical scenario and I'm curious how GDP measures it
I have an office with 10 workers, wages are $500K
Computers and software for a year has a capital expenditure of $30K but because it is expensed over 3 years, then the cost is $10K. Revenue is $550K
Revene $550K
Wages $500K
computer expense $10K
Profit is $40K
so how does GDP get calculated?
You don't present enough numbers and enough parameters to come to any conclusions whatever. GDP represents the widgetization of actual production flows in an attempt to simplify a means of separating profits from expenses. By characterizing all sorts of activities in terms of a single property (GDP in terms of $) essential and non essential are lumped together with no discernment as to environmental or social costs versus environmental or social benefits. Rightfully, economic systems of man are subsystems within a greater natural set of ecosystems. But the economist and the factory owner stops his calculating when the money outcome is reached (the proverbial bottom line). Therein lies our dillemna. Nature requires of us that we not destroy the natural systems that support our species. Deny this we get things like GNP and widgets thrown at us for the purpose of teaching us to think in a very limited way indeed.
coloradoatheist
Veteran Member
GDP just shows the general flow of things through the economy during a period. The argument that Axulus is going through is that cost that I gave of $10K is actually too low for what really happens and the accounting that we use doesn't represent the true numbers.
For the second...You be on the Internet and front a computer shows that you aren't too concerned about the environment. If you were that concerned you would be living off the land or a dumpster.
Axulus
Veteran Member
You are under the delusion that slaves' work productivity was at the highest of human possibilities. In fact, if you would stop denying reality, you would understand that you got some of the lowest productivity from them. They had almost no reason to learn new skills. No reason to stand out among the rest. No reason to go above and beyond.
It is ludicrous that you don't understand that minimum wage today is _far_ greater than the amount it cost to keep a slave alive. Additionally, wages advanced at the fastest rate, percentage wise, in all of human history between 1860-1929 up until that point in history. There are cases were it advanced faster later on during catch up growth in places like South Korea in the 60's-80's, Taiwan, China after the mid 70's, etc.
DBT
Contributor
My vote on this issue is; it would help the economy if wealth was more evenly spread throughout society and not, as it currently stands, concentrated in a small percentage of the population.
Canard DuJour
Veteran Member
No, that is not what the paper under discussion says.
First, let's forget about widgets. I have lived 72 years so far and have never had any need for a widget. It is just a hypothetical notion economists use to convince others they know what they are talking about. In real life, we have actual needs and one of those needs is sufficient income to clothe, house, and generally support a healthy life for a worker and his family. That is not a widget. That is a need. The widget has to be related to real needs or perhaps we really don't need so many of these fucking widgets.
Your objection to using widgets as a model does absolutely nothing about addressing the issue I brought up.
lpetrich
Contributor
How is that a "delusion"?
Slavery has been a very successful way of keeping labor costs low. This is evident from how slave-labor plantations were never undersold by wage-labor ones. I've read that a big objection to slavery among the less-well-off free workers was that they did not want to have to compete with slaves' cheaper labor.