3 ms·

Typically it's not make $3 and spend $4, it could even be, make $3 and spend $2.01. Labor rate going up $1 doesn't mean unit price goes up $1.

by Klinky 6y ago

AnthonyMouse 6y ago
The entire price paid either goes to labor or capital, and most of it already goes to labor. If you pay 1% of the workers $3 instead of $2 then the price may only need to rise by $0.01, but then you're just taking $0.01 each from a hundred workers and giving it all to 1% of them. And what happens after you do that a hundred times? Meanwhile, again, introducing a monopoly increases the money that can be extracted from customers by labor but also by capital. So if you introduce a monopoly and it raises prices by $0.01 or $100 or whatever amount, and you're very lucky and labor gets 90% of the increase and capital only 10%, then on average workers have lost 10% of that amount. Because you still pay 100% of the price increase and then get less than 100% of it back. There are also taxes, which make it even worse -- you get paid $1 more, the government takes 25%, you go to buy the thing that costs $1 more (so capital is getting 0% of the money) but then you owe 8% of the $1 in sales tax, and you've now lost a third of the money you used to have to Uncle Sam so they can give it to Bank of America and Halliburton.
- Klinky 6y ago
  I don't get your toy examples. It seems you're assuming laborers can only consume the products they produce? That's not how an economy works, and affordability also depends on need and scalability. What happens when you don't increase labor rates, but keep increasing prices anyways? Maybe this is less about increasing prices and more about capital needing to decrease their share.
- benibela 6y ago
  >but then you owe 8% of the $1 in sales tax, and you've now lost a third of the money you used to have to Uncle Sam so they can give it to Bank of America and Halliburton. Sounds like a good argument for universal basic income

Typically it's not make $3 and spend $4, it could even be, make $3 and spend $2.01. Labor rate going up $1 doesn't mean unit price goes up $1.

by Klinky 6y ago

Typically it's not make $3 and spend $4, it could even be, make $3 and spend $2.01. Labor rate going up $1 doesn't mean unit price goes up $1.

AnthonyMouse 6y ago

The entire price paid either goes to labor or capital, and most of it already goes to labor. If you pay 1% of the workers $3 instead of $2 then the price may only need to rise by $0.01, but then you're just taking $0.01 each from a hundred workers and giving it all to 1% of them. And what happens after you do that a hundred times? Meanwhile, again, introducing a monopoly increases the money that can be extracted from customers by labor but also by capital. So if you introduce a monopoly and it raises prices by $0.01 or $100 or whatever amount, and you're very lucky and labor gets 90% of the increase and capital only 10%, then on average workers have lost 10% of that amount. Because you still pay 100% of the price increase and then get less than 100% of it back. There are also taxes, which make it even worse -- you get paid $1 more, the government takes 25%, you go to buy the thing that costs $1 more (so capital is getting 0% of the money) but then you owe 8% of the $1 in sales tax, and you've now lost a third of the money you used to have to Uncle Sam so they can give it to Bank of America and Halliburton.

Klinky 6y ago
I don't get your toy examples. It seems you're assuming laborers can only consume the products they produce? That's not how an economy works, and affordability also depends on need and scalability. What happens when you don't increase labor rates, but keep increasing prices anyways? Maybe this is less about increasing prices and more about capital needing to decrease their share.
benibela 6y ago
>but then you owe 8% of the $1 in sales tax, and you've now lost a third of the money you used to have to Uncle Sam so they can give it to Bank of America and Halliburton. Sounds like a good argument for universal basic income