5 ms·

No, the price increase will be much smaller than the wage increase because the wage increase only goes to the fraction of the population that does the work whil

No, the price increase will be much smaller than the wage increase because the wage increase only goes to the fraction of the population that does the work while the price increase applies to the entire population.

pitaj 6y ago
If you raise the base cost of production in a low margin case like agriculture, then the price of the good must increase or they would be running at a loss.
- notfromhere 6y ago
  Agriculture is incredibly subsidized, which means cost of production and cost at point of sale do not have a tight relationship
- erikpukinskis 6y ago
  Yes, but the amounts are tiny. Would you pay an extra 10 cents a pound for your produce? That amount would be life changing for farmers. But the market will always find the place where the work is unbearable and stop just shy of that.
  - f6v 6y ago
    > Yes, but the amounts are tiny. Would you pay an extra 10 cents a pound for your produce? That amount would be life changing for farmers. You underestimate the percentage of the income some people spend on food. That's why agriculture is heavily subsidised.
    - erikpukinskis 6y ago
      I didn’t estimate that.
- danbruc 6y ago
  Of course, but if everyone pays $1 more then the wages can increase by $10 assuming 10% of the population works in agriculture which still leaves them $9 better off. My point was just that a wage increase is not nullified by the price increase as long as not everyone is working in the fields.
  - chongli 6y ago
    if everyone pays $1 more That’s a collective action problem. You can’t get everyone to pay $1 more. If your strawberries (for example) cost $1 more per pint then your sales will drop accordingly. It doesn’t matter if all strawberry farms agree to pay more to their strawberry pickers. You aren’t only competing against other strawberry farms, you’re competing against all other food. If strawberries are too expensive, people will eat candy or potato chips instead.
    - danbruc 6y ago
      So it turn out that people or not willing to pay what it costs to produce strawberries at a wage level at which people are willing to do the hard work. That's fine. The farmer should try to lower the costs by automation or switch to producing potatoes for those potato chips.

pitaj 6y ago

If you raise the base cost of production in a low margin case like agriculture, then the price of the good must increase or they would be running at a loss.

notfromhere 6y ago
Agriculture is incredibly subsidized, which means cost of production and cost at point of sale do not have a tight relationship
erikpukinskis 6y ago
Yes, but the amounts are tiny. Would you pay an extra 10 cents a pound for your produce? That amount would be life changing for farmers. But the market will always find the place where the work is unbearable and stop just shy of that.
- f6v 6y ago
  > Yes, but the amounts are tiny. Would you pay an extra 10 cents a pound for your produce? That amount would be life changing for farmers. You underestimate the percentage of the income some people spend on food. That's why agriculture is heavily subsidised.
  - erikpukinskis 6y ago
    I didn’t estimate that.
danbruc 6y ago
Of course, but if everyone pays $1 more then the wages can increase by $10 assuming 10% of the population works in agriculture which still leaves them $9 better off. My point was just that a wage increase is not nullified by the price increase as long as not everyone is working in the fields.
- chongli 6y ago
  if everyone pays $1 more That’s a collective action problem. You can’t get everyone to pay $1 more. If your strawberries (for example) cost $1 more per pint then your sales will drop accordingly. It doesn’t matter if all strawberry farms agree to pay more to their strawberry pickers. You aren’t only competing against other strawberry farms, you’re competing against all other food. If strawberries are too expensive, people will eat candy or potato chips instead.
  - danbruc 6y ago
    So it turn out that people or not willing to pay what it costs to produce strawberries at a wage level at which people are willing to do the hard work. That's fine. The farmer should try to lower the costs by automation or switch to producing potatoes for those potato chips.