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>"Or wage regulations (increasing the minimum wage)" Evidence on this is mixed at least; the majority of the studies go against this being an effective policy.

by nickff 11y ago

>"Or wage regulations (increasing the minimum wage)" Evidence on this is mixed at least; the majority of the studies go against this being an effective policy. The Card and Krueger findings are somewhat convincing, but do not hold over a longer period of analysis. >"Or labor organization (ie Germany)" Labor organization may help transfer wealth from shareholders, suppliers, or consumers to the workers, unless it kills the host companies or causes them to move away. I have not seen evidence that labor organization helps the average citizen, though there is some evidence that it may help the unionized people; unless labor organization improves productivity, it can only change distribution, and I'm not sure who it really transfers wealth from. >"Or tax regulations (shift tax incentives from machinery to labor)" This may help raise demand for labor, but pay can never go higher than productivity, which usually requires capital investments. >"Growth is over my friend, at least the growth that would be necessary for wage inflation (ie Japan)." I disagree, and it is difficult (if not impossible) to prove which of us is right.

toomuchtodo 11y ago
> Labor organization may help transfer wealth from shareholders, suppliers, or consumers to the workers, unless it kills the host companies or causes them to move away. This is by design. If we can transfer more wealth to workers instead of shareholders, we should. If workers can't receive an appropriate wage from a company, than the business is most likely not viable (see: people complaining their business won't work with a $15/hour minimum wage). >"Growth is over my friend, at least the growth that would be necessary for wage inflation (ie Japan)." > I disagree, and it is difficult (if not impossible) to prove which of us is right. I agree that this will be determined by India, China, and to a lesser extent Africa. I believe these economies are growth-limited now, due to the fundamentals around how their economies are structured. note: I removed a quote child comment responded to, referenced below.
- nickff 11y ago
  >" If we can transfer more wealth to workers instead of shareholders, we should." This is a normative goal, but you are assuming that unions always transfer wealth from shareholders to workers, and I am not convinced of this. Shareholders will refuse to invest if the returns are not attractive, so it is difficult to retain them. It seems more likely that unions will transfer wealth from consumers or suppliers to the union members, which is a much less appealing prospect. >"Can you explain the rational as to how zero interest rate policies can stoke demand on-par with middle class consumers, versus simply enriching lending institutions? If I'm wrong, I am happy to concede the point." I'm not convinced that the Federal Reserve has much impact on consumer and corporate interest rates. All central banks believe that international bond markets are relatively free. All central banks also believe that they control their national interest rates. These beliefs are not compatible. note: the second quote in this post was edited out of the parent
maxxxxx 11y ago
"This may help raise demand for labor, but pay can never go higher than productivity, which usually requires capital investments." In the last decades pay for the average worker has not kept up with productivity.
- toomuchtodo 11y ago
  https://thecurrentmoment.files.wordpress.com/2011/08/productivity-and-real-wages.jpg https://thecurrentmoment.files.wordpress.com/2011/08/product... Also, if monetary policy is driving rates negative, technically, capital "required" for productivity is literally free.
  - nickff 11y ago
    >"Also, if monetary policy is driving rates negative, technically, capital "required" for productivity is literally free." This is only superficially true. Real interest rates also take inflation risk and investment risk into account, so they could easily be quite signiifcant even when the central bank says there is a negative interest rate.

by nickff 11y ago

toomuchtodo 11y ago

> Labor organization may help transfer wealth from shareholders, suppliers, or consumers to the workers, unless it kills the host companies or causes them to move away. This is by design. If we can transfer more wealth to workers instead of shareholders, we should. If workers can't receive an appropriate wage from a company, than the business is most likely not viable (see: people complaining their business won't work with a $15/hour minimum wage). >"Growth is over my friend, at least the growth that would be necessary for wage inflation (ie Japan)." > I disagree, and it is difficult (if not impossible) to prove which of us is right. I agree that this will be determined by India, China, and to a lesser extent Africa. I believe these economies are growth-limited now, due to the fundamentals around how their economies are structured. note: I removed a quote child comment responded to, referenced below.

nickff 11y ago
>" If we can transfer more wealth to workers instead of shareholders, we should." This is a normative goal, but you are assuming that unions always transfer wealth from shareholders to workers, and I am not convinced of this. Shareholders will refuse to invest if the returns are not attractive, so it is difficult to retain them. It seems more likely that unions will transfer wealth from consumers or suppliers to the union members, which is a much less appealing prospect. >"Can you explain the rational as to how zero interest rate policies can stoke demand on-par with middle class consumers, versus simply enriching lending institutions? If I'm wrong, I am happy to concede the point." I'm not convinced that the Federal Reserve has much impact on consumer and corporate interest rates. All central banks believe that international bond markets are relatively free. All central banks also believe that they control their national interest rates. These beliefs are not compatible. note: the second quote in this post was edited out of the parent

maxxxxx 11y ago

"This may help raise demand for labor, but pay can never go higher than productivity, which usually requires capital investments." In the last decades pay for the average worker has not kept up with productivity.

toomuchtodo 11y ago
https://thecurrentmoment.files.wordpress.com/2011/08/productivity-and-real-wages.jpg https://thecurrentmoment.files.wordpress.com/2011/08/product... Also, if monetary policy is driving rates negative, technically, capital "required" for productivity is literally free.
- nickff 11y ago
  >"Also, if monetary policy is driving rates negative, technically, capital "required" for productivity is literally free." This is only superficially true. Real interest rates also take inflation risk and investment risk into account, so they could easily be quite signiifcant even when the central bank says there is a negative interest rate.