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>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 t
by 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 agoWhy 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.