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Yes, that paragraph is very, very bad, because it's not people of equal education that would have equal wages, but equal productivity---which will vary dependin
by lusmd 8y ago
Yes, that paragraph is very, very bad, because it's not people of equal education that would have equal wages, but equal productivity---which will vary depending on what firm you're at! Not just because of sorting and poaching of talent, but some firms' production and capital structure will be such that the marginal worker will be more productive.
- s17n 8y agoThat makes no sense, equivalent workers should get paid equivalent wages regardless of their firms’ productivities. Apple doesn’t pay more for aluminum than a soda can maker.
- CamTin 8y agoIt doesn't but it would continue buying for longer if the price went significantly and permanently up. But the point of this whole thread is that labor isn't just another commodity like aluminum. It's a special, weird thing and the market in it is just different and probably less "efficient" than the markets for metals and grain. The question isn't "how can we best model this using our existing theory?" It's "what is the best way to model this?", so if the existing theory isn't very helpful, we should look for new ones that are better.