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Nicely put
You seem to repeatedly keep forgetting some obvious, perceptible economic facts. That lower prices increase demand & consumption, which holds true for both products as well as labor, so people buy more stuff as well as more people are hired when prices/wages are lower; conversely, higher prices discourage consumption, again, that holds true for both products as well as labor, so less products are bought & less people are hired. Considering this, those that want more jobs & higher living-standards should be happier with lower prices/wages.
The thing is that people get muddled in nomimal-prices/wages while ignoring real-prices/wages, which is what causes the suggested disparity in their view (that is, their desire for lower prices & higher wages); instead, as madison320 has mentioned, an hour's worth of pay over the years, is a better way (although not perfect because the demand for different types of work can fluctuate) way of judging the relative increase/decrease in people's living standards over the years & decades.
This sort of a thing becomes very obvious when one looks back on historical periods in various countries where real-wages & living-standards of people rose very quickly, under deflationary metallic monetary standards, despite the fact that nominal-prices/wages of products/labor fell as economies grew over time.
Your inherent assumption being that the workers, in the past, were able to get significantly more work done compared to present workers & therefore, present workers are being continuously (since the time that such a downward shift in workers' productivity occurred) & significantly overpaid, for whatever reason. I strongly doubt that this has been the case because markets are very efficient (isn't that why we prefer freer markets!), often even despite government controls (repeated failure of government price controls & wage controls can be seen throughout history) so why would markets start & continue to overpay workers? I strongly believe, it hasn't. So the assumption that an increase in the number of workers has caused a fall in living-standards is unsatisfactory because of course, an increase in the number of workers can affect real-wages as well as nominal-wages but it's impact on real-wages (which is what we should concern ourselves with) is TEMPORARY & is offset by the subsequent increased production.
I'm not sure what your exact position is. Because on one hand, you are saying that increasing immigration has suppressed wages while on the other hand, you are admitting that purchasing-power (& therefore, real-wages) have gone up. It can't be both!
While the last couple of years may have been hard for many, I doubt there's been a drop in living standards of people over several decades; I think it's just people's (mostly erroneous) perception that "good ol' days were so much better". And while things have likely not gotten worse over the decades, despite people's perceptions, may be the growth in people's living standards has been slow, eaten away by inflation, compared to the growth that may have been witnessed during the "good ol' days" when the government did practice (even though, inefficiently) a gold-standard & increasing the money-supply wasn't as easy as it has been after its complete removal.
On a different note, import taxes are simply a wealth-transfer program, primarily from those who have been & will be buying imported products to those who might be hired or receive higher pay because of such a tax, not to mention, everyone else also foots a little bit of the bill because an economy is an interconnected & interdependent web of prices, so everyone is worse off in the end.
There is enormous inertia — a tyranny of the status quo — in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
- Milton Friedman
If you leave out real wages, then yes it can be both true.
Immigrants create supply for labor, making labor cheaper. A dollar can now buy more labor for less, this is increase in purchasing power. Labor costs go down nominally, I don't know about "real" but wages go down, and wages are cheaper, and dollar is stronger.
Can you offer examples of times when nominal prices and wages were falling as economies grew?despite the fact that nominal-prices/wages of products/labor fell as economies grew over time
Lower wages are not necessarily offset by lower prices. That is because not all productivity goes to wages. Some is retained as profits by the company. The labor share of prices has fallen quite a bit in the last 50 years or so. Wages have not kept up with productivity increases and prices have also not reflected changes in productivity. Bosses and companies have been retaining larger shares than they used to.
Last edited by Zippyjuan; 03-14-2015 at 06:54 PM.
ok, that's better, now you actually have something. Not evidence I'm lying, not evidence I'm paid, but at least an answer that's better than "I already posted it!!!!!"
What employer sending money through PayPal to who?
When I said I belittle people, if I recall the context correctly, it's to mock people who are conspiracy theorist, hyperinflation alarmist or think life was always better in the past. None of that has to do with being libertarian, I don't mock people just for being libertarian.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
"If you can't explain it simply, you don't understand it well enough." - Albert Einstein
"for I have sworn upon the altar of god eternal hostility against every form of tyranny over the mind of man. - Thomas Jefferson.
Yes, nominal-wages go down, that is, each worker receives fewer dollars than before but production would also go up & increasing supply of products would reduce prices as well. People think that there's a limited amount of pie & the more people are there, the less of the chunk they'll get but this isn't necessarily true if the new people are also being productive. If 100 people are producing 100 pies then 110 people would be producing 110 pies so the reduction in nominal wages would be compensated by lower prices in the economy.
Since you follow Keynesian economics, you'd know enough about sticky wages/prices. It used to occur frequently under metallic monetary standards because if the economy grows at a faster pace than the pace at which monetary units are growing then that would cause a price-deflation, a fall in wages/prices caused by the growth of the economy. This is the very "problem" Keynes felt the need to solve by allowing the government to increase moneysupply in line with a growing economy.
And, why would all productivity go to wages??? If it did, then what would be the incentive for the company to fund & run the operation in the first place????? You surprise me!
Just like wages are the return earned on labor, profit is the return earned on capital ivested so it would be naive to think that all the productivity should go to wages. Such things only happen in the dreams of communists, not the real world!
There is enormous inertia — a tyranny of the status quo — in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
- Milton Friedman
Sounds about right. This is why electronics are getting cheaper, less people have (blue collar) jobs.
Productive in doing what? People can only eat so many pies.People think that there's a limited amount of pie & the more people are there, the less of the chunk they'll get but this isn't necessarily true if the new people are also being productive.
This assumes there's demand to eat the extra 10 pies, or else the 10 pies are wasted, and while it'll initially make pies cheaper, it'll lead to reduction in production if demand is not constant.If 100 people are producing 100 pies then 110 people would be producing 110 pies so the reduction in nominal wages would be compensated by lower prices in the economy.
So nominal wages will go down but wages are sticky. Seems to conflict. I agree on the sticky part- since employers have a hard time reducing pay for existing staff, they react instead by cutting the hours of the workers they have.
Were you able to find examples of a growing economy with falling prices and wages yet? If it happened frequently, there should be many examples. More often, decreases in wages and prices are associated with recessions- not growing economies. Even under metal standards. Again, the sticky wages problem. Employers can't cut wages so they cut staff. People have less money to spend on things so they buy less. Employer sees demand fall so he cuts more workers. It may work in theory but doesn't happen in reality.It used to occur frequently under metallic monetary standards because if the economy grows at a faster pace than the pace at which monetary units are growing then that would cause a price-deflation, a fall in wages/prices caused by the growth of the economy.
Last edited by Zippyjuan; 03-15-2015 at 04:50 PM.
I did find a chart for the US which includes inflation/ deflation and recessions. The US has been on a metal standard of various forms until it was fully ended by Nixon in 1972. If it "occurs often" we should see deflation during growth periods. This chart runs from 1914 to 2011. Almost a hundred years.
http://inflationdata.com/inflation/I..._Recession.asp
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Since there's an increase in the number of people consuming, demand will obviously have increased; & if there isn't then those additional workers would be utilized in producing something else that does have demand as markets are fairly efficient in resource-allocation.......Anyway, the point about pie example was an that increase in labor supply does NOT necessarily mean that "more people are going to have to share the same pie with each person getting smaller piece".
So, now you're going to dispute something, which is agreed upon by various schools of economic thought (including Keynesian) - that, price-deflation occurred under metallic standards because of the growth of the economy!
It doesn't take much imagination to understand the concept. If there are 100 units of money, be they dollars, gold, seashells, or whatever, & an economy is producing 100 products, & subsequently, as the economy grows to produce 105 products, & the money doesn't grow in line with the growth of the economy, then the prices of products can only fall.
I know you like to go around in circles with your arguments but if you're going to dispute something that is so widely accepted (& it's not at all a hard concept to grasp!) then I don't see a point in arguing with you on this........because that would be like arguing with someone who claims that the Earth is flat......
There is enormous inertia — a tyranny of the status quo — in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
- Milton Friedman
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