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People aren't paid based on what their companies can afford to pay them though, they're paid what the market will bear.
by droidist2 13y ago
People aren't paid based on what their companies can afford to pay them though, they're paid what the market will bear.
- bayesianhorse 13y agoI think there are a couple of factors at play. Labor markets especially for highly skilled jobs tend not to be exactly the best examples of "free market" and "perfect competition". There seems to be a lot going on... imperfect information, differentiation, "cartels" on both sides...
- droidist2 13y agoAgreed, but wouldn't those factors also affect your scenario in which lower paid workers free up cash to raise salaries? I only meant to argue that the "what the market will bear" model is closer to reality than the scenario your presented, not that it is a perfect fit.