4 ms·

Companies have been making that same complaint for 5 years, wages still stagnate.

Mountain_Skies 8y ago
It's possible that companies, being use to getting their way from the government, expects that their labor and wage woes will get soon get taken care of for them by government intervention in the labor market. If this is how they're viewing the issue, the have incentive to hold off on wage increases as long as possible so to not end up at a competitive disadvantage when their desired government policies get implemented. If those policies never actually come to be or are less effective than desired, then sooner or later some companies will try to gain a competitive advantage by offering higher wages. How long are employers willing to forego the ability to attract away labor from other employers with wage hikes is an unknown but as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. That they might be thinking this way is pure speculation on my part but seems plausible.
- moorhosj 8y ago
  >as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. This wouldn't explain all of the times throughout history when companies did increase wages during times of economic growth and low unemployment. This sounds like taking something that looks like a market failure and trying to frame it as a governmental failure.
  - AstralStorm 8y ago
    Why not both? It can be both a market failure and governmental failure, either because it allowed it or because it is applying bandage solutions that actually do not work long term and not trying to figure out real ones. Alternatively it is bought by the actors causing the market failure. Just the exploitation of certain properties of the imperfect markets that actually exist is enough for the current situation to occur in absence of arbitrage. Market could be working exactly as modeled given a full model with big information inequality and low labour elasticity.

It's possible that companies, being use to getting their way from the government, expects that their labor and wage woes will get soon get taken care of for them by government intervention in the labor market. If this is how they're viewing the issue, the have incentive to hold off on wage increases as long as possible so to not end up at a competitive disadvantage when their desired government policies get implemented. If those policies never actually come to be or are less effective than desired, then sooner or later some companies will try to gain a competitive advantage by offering higher wages. How long are employers willing to forego the ability to attract away labor from other employers with wage hikes is an unknown but as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. That they might be thinking this way is pure speculation on my part but seems plausible.

moorhosj 8y ago
>as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. This wouldn't explain all of the times throughout history when companies did increase wages during times of economic growth and low unemployment. This sounds like taking something that looks like a market failure and trying to frame it as a governmental failure.
- AstralStorm 8y ago
  Why not both? It can be both a market failure and governmental failure, either because it allowed it or because it is applying bandage solutions that actually do not work long term and not trying to figure out real ones. Alternatively it is bought by the actors causing the market failure. Just the exploitation of certain properties of the imperfect markets that actually exist is enough for the current situation to occur in absence of arbitrage. Market could be working exactly as modeled given a full model with big information inequality and low labour elasticity.