Posted by bad_luck on 5/5/2014 1:37:00 PM (view original):
Posted by silentpadna on 5/5/2014 12:58:00 PM (view original):And you can only buy if you have sellers.
Posted by bad_luck on 5/5/2014 12:40:00 PM (view original):You might be. That may or may not be relevant. There's not enough information to make that conclusion in this case. In other words, you can try to set the price if you want to,but you can only sell if you have buyers.
Posted by silentpadna on 5/5/2014 12:35:00 PM (view original):So, just to be clear, if I'm offering a product/commodity/service at a price and someone offers me less than my stated price and I refuse, I'm not a lazy *******, correct?
You should do what you think the market will do. That's how markets work. If the government told you you had to sell it for $100 and it's only worth $20, would you be able to sell it?
Workers sell their labor to buyers. Good public policy prevents the labor market from completely going to **** in times of economic distress. It may be bad to have a lot of people collecting unemployment, but it's worse to allow wages to be driven down to the point that people take jobs that don't allow them to afford rent in order to avoid starvation.
One way to help prevent the labor market from doing that is to get government out of artificially deciding market value. That would be good public policy. You don't sell in the first place if your return on investment is not high enough. People work like businesses do. Price settles at value without interference. When the government pushes, there is reaction in other areas. There has to be. You can try all you want to take the profit motive out of it by "forcing" business to pay a "living wage", but there is no way for government to do that without unlimited power. Nor should they. You may not have said as much explicitly, but that's where these policies, like artificially hiking minimum wage and perpetual unemployment "benefits", would lead. (BTW, I am all for tying minimum wage to the CPI or other index. That would help prevent the use of it as a political football to make the uninformed feel better about it, but as long as they can continue to play the game, they will).
The bottom line is, if a business can sell goods and services at a required rate of return, they will do whatever they can to do it, including paying the labor cost necessary for workers that possess skills they value. If I go to market with a product (of which I take the financial risk to produce it), I have to price it so that people will buy it. If there is enough demand for the product, the equilibrium price establishes where supply and demand meet. At that point, I better be producing in such a manner that my price is above my cost enough to provide a return on the investment that is greater than my opportunity cost to invest in something else. My cost is going to be determined by how much my materials cost and how much my labor costs to build. If I need people with valuable skills they will cost more. If I need people with no skills, they will cost less. If government interferes too much with labor cost (or taxes or regulations with costs to comply), they can artificially price me above the market price, hence my opportunity to invest in something else.
The labor cost (or wages) will follow what we value.
If government values "high taxes on corporations", then they also, by extension, value less skilled workers working for those corporations, since those same corporations will have less incentive to invest in things with higher risk.
Regulations (not saying all are bad), high taxes, wage and price controls; all of those things affect business' opportunity costs.