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> is not a worker who wants more than what the employer is willing to pay then no longer part of the supply? I think that is a fair assertion. If demand disapp
by randomdata 9y ago
> is not a worker who wants more than what the employer is willing to pay then no longer part of the supply?
I think that is a fair assertion. If demand disappears, the supply also disappears (why supply something that nobody is going to buy?). However, the people who would have made up that supply of labour tend to not die. They find something new to supply to the market with instead, thus putting downward pressure on the jobs that do pay sufficiently to attract people, but not to the point where nobody is willing to do the job. Thus why incomes aren't increasing (but also not heading towards $0).
> if you actually did raise your pay rate to a point where there would exist a worker willing to work for that amount, and you could further prove that worker would still be able to create enough value to the employer s.t. he or she was worth hiring in the first place
This is the issue though. The farmer in the article didn't get his crop off because the consumers didn't care enough about the product to justify its harvest. The airline had to cancel the flight because the consumers didn't care enough about making that trip to justify finding a pilot. If people were starving, they would be willing to pay more for food, and the farmer could have then afforded the necessary labour. If people had to make that trip, they would have paid more for the flight, and the airline could have afforded the necessary pilot. You have to actually have a reason to pay these people sufficiently, which is not always the case. Not all jobs are actually needed.
Price is a function of supply and demand, but just saying you want something is not actually demand. There has to be the willingness and ability to pay the price that is necessary, by the very definition of demand.