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> That is what prevents the market from being efficient The problem is, nobody really wants labor markets to be efficient. Efficient labor markets mean that we
by js8 9y ago
> That is what prevents the market from being efficient
The problem is, nobody really wants labor markets to be efficient. Efficient labor markets mean that we would pay workers the subsistence wages, because, why they should be paid more?
That's the thing, labor is not like other commodities, say apples or computers. You want to make the price of other commodities to be as low as possible, and everybody (all humans in society) wins. But for price of labor this is not true.
- cortesoft 9y agoThat isn’t true; an efficient market doesn’t imply that we will pay workers subsistence wages. Market rate has nothing to do with what a person needs to survive. The rate would be set based on competition with other employers for employees; you pay enough to keep a worker from getting a job at another employer. So the answer to the question, “why would you pay more?” is, “so they don’t start working for someone else instead” Now, the market system doesn’t work for employment because of the reason I stated in my original comment, but it isn’t related to the ‘minimum wages needed to survive’