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I generally agree but there's a limit. If the cost of renovating my house becomes too high (e.g. labor too expensive) I simply won't do it and will put it off.
by cylinder 9y ago
I generally agree but there's a limit. If the cost of renovating my house becomes too high (e.g. labor too expensive) I simply won't do it and will put it off. In fact this just happened with a relative. There's certainly an equilibrium point.
- reefoctopus 9y agoYes. At this point the price you are willing to pay would be below the equilibrium price.
- randomdata 9y agoThis seems to be the mistake that the article makes. You saying that you want to renovate your home, or that a farmer wants to harvest his crop, or that an airline would like to fly somewhere, is not a real indication that work needs to be done. There is always a point where the cost makes it not worth doing anymore, and at that point, the jobs aren't really jobs. Trying to include them in the demand for labour violates what demand means.
- s73ver 9y agoAnd then wages will back down a bit. But I don't think anyone could argue that we are anywhere near that point.