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>then twice as much retirement savings should simply lead to a twice higher market clearing price for that work due to "these accounting mechanizations". You a
by omegaworks 4y ago
>then twice as much retirement savings should simply lead to a twice higher market clearing price for that work due to "these accounting mechanizations".
You assume:
* The labor market isn't flexible, that higher pay won't attract new workers
* There isn't a wage at which workers would be satisfied meeting their basic needs.
And this makes your conclusion that the labor would simply absorb additional funding too rigid.
- PeterisP 4y ago> * The labor market isn't flexible, that higher pay won't attract new workers Why yes, looking from a whole market macroeconomic perspective, we should assume that the labor market won't magically generate an arbitrary number of new workers just because the pay is higher - the total number of potential workers is set by demographics and cannot rapidly adjust due to market pressure. The pay rate does affect the labor participation rate, but there isn't that much room for maneuver there, the changes in proportion of workers-to-retirees are much larger than what you can fill with non-working potential workers. Well, one way that does get new workers is massive immigration of working-age people (which is the strategy used, perhaps unintentionally, by some countries), but if their birth rate and life expectancy is similar, that only postpones the issue until those immigrants themselves reach non-working age.