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| Thread: Survey on tax structure |  This thread is pages long: 1 2 3 4 5 6 7 · «PREV |
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TheDeath
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posted April 08, 2009 06:24 PM |
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Quote:
Due to the increased labor market, there would be a greater supply of labor, which would lead to lower labor costs - which is good.
If that was true, we wouldn't have unemployment. Go figure.
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mvassilev
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posted April 08, 2009 10:45 PM |
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JJ:
Quote:
QUITE obviously, following your logic, the higher the unemployment rate, the lower the labor costs, so 50% unemployment rate is fine, right?
No - unemployment itself has no direct effect on labor costs. But increased competition causes workers to ask for lower wages (unless, of course, they're prevented from doing so by the minimum wage), which does lead to lower labor costs.
TheDeath:
There's frictional unemployment. Plus there's the minimum wage.
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JollyJoker
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posted April 09, 2009 07:36 AM |
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You should know that this is wrong. More unemployment leads to lower demand and lower wages lead to lower demand as well. As a sideeffect it will lead to workers having a greater need for working overtime to make up for the lower wages, making it easier to fire workers, since you will be able to compensate for it.
The bottom line is - I repeat -, that you simply put people from the pensioneer side of society into the unemployment part, since the only place where additional workers are needed are the welfare offices.
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mvassilev
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posted April 09, 2009 02:57 PM |
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But then the employers will also lower their demand, and the economy will readjust.
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JollyJoker
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posted April 09, 2009 03:09 PM |
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"But" that wasn't your point; your point was that raising retirement age would free funds which is nowhere to be seen - except if and when it's cheaper for the government to have unemployed than pensioneers, which in turn depends on who pays what for either pensions or unemployed.
Which is why I called it cynism: pensions are depending on what you did in your career, while welfare for unemployed depends on other things as well and is indeed lower than pensions.
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del_diablo
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posted April 09, 2009 03:12 PM |
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Quote:
JJ:
Quote:
QUITE obviously, following your logic, the higher the unemployment rate, the lower the labor costs, so 50% unemployment rate is fine, right?
No - unemployment itself has no direct effect on labor costs. But increased competition causes workers to ask for lower wages (unless, of course, they're prevented from doing so by the minimum wage), which does lead to lower labor costs.
TheDeath:
There's frictional unemployment. Plus there's the minimum wage.
Quote:
But then the employers will also lower their demand, and the economy will readjust.
Unemployment got NO effect on the cost of things before it reaches a certain level, then it will starting to stop the money flow(less people buy, so we fire people, and it goes on until for a while).So we leave that out.
If we increase the competition then we got work arounds. First one is to NOT increase the competition, the 2nd one is work contracts(spesific wage). There are lots more, but these 2 in general works.
If we increase the pension age by 2 years it would only be benefital IF those places needs those workers anyway(law enforcement is an example). But on the arveage run it no need for that to happen.
And people would not below X, because the cost of living is Y. Y is the absolute minimum, and only the desperat would pick that.
On-topic: Increase the really rich peoples taxes by 1% would earn more than doing those 2 years in pension.
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