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> In both these instances, breaking the inertia is enough to disrupt this fragile balance that companies were exploiting to keep wages and salaries down. When t
by PragmaticPulp 5y ago
> In both these instances, breaking the inertia is enough to disrupt this fragile balance that companies were exploiting to keep wages and salaries down. When the line breaks (a few companies caving), the entire defence that “this is what market pays” comes crumbling down.
You’ve got it backwards. The concept of “market rate” is at the core of why this is happening in the first place. Market rate is going up, which is driving these changes.
Market rate isn’t a myth that business owners use to suppress wages. It’s literally just the rate that the market will bear for a given type of labor. Supply and demand of labor and jobs shifts this point around like any other supply/demand curve.
- 8ytecoder 5y ago"Market rate" can and will be low because it's not in the interest of any one company to increase the wages - even if that means the wages are exploitative. Same goes for child labor, off-shoring jobs, environmental damage, ...etc. It's this external factor - pandemic driven layoffs and benefits - that's driving the change.
- sam345 5y agoActually supply and demand usually rules Pandemic or no pandemic. E.g., : 1) if you want better workers and skilled worker supply is limited, you pay more than the other guy, so wages go up. 2) As wages go up more people are motivated to get trained in that skill. Eventually more workers available and supply of workers goes up. If demand stays the same, wages go down as employers don't have to pay as much to fill positions. 3) Less motivation to get trained in that skill so less workers. Repeat 1.