View Single Post
Old 10-04-2003, 03:49 PM   #26 (permalink)
chavos
Banned
 
Location: St. Paul, MN
Quote:
In the short run, productivity gains help earnings at the expense of employment, and that's not a situation that we should want to last," said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis.
Okay? Productivity and employment are negatively related in the short term. You cut short run costs by layoffs, becuase all your other costs are sunk or fixed already.

second, i'd wager that blue collar tends to have somewhat less control over thier amount of output with relation to their morale. but that's not really even the issue...so never mind.

third...you miss the point-the reason why i talked about how tech spending is an investment, because investment spending is still low. and that spending, NOT THE CONSUMER, is what drives productivity gains. And productivity gains, AND NOT THE CONSUMER, is what drives long term economic growth. Which was my point in the first place...

Consumption obviously has to take place to direct the market economy, but simply using up resources cannot be the basis of the economy...it is the rate at which we produce resources/products that determines the standard of living.
Quote:
Productivity growth is important because it is the main determinant of changes in our standard of living.
http://www.dallasfed.org/eyi/usecon/0003growth.html

Lets think through this. Labor costs are fixed, short term. Production amounts are not. If demand rises, due to increased consumption, production will rise because each unit is giving additional profit. However, with higher demand comes higher prices. Higher prices demand cost of living adjustments, higher wages. So, the firms aren't making the increased profit...they cut back on production to stay in budget with the pressure of higher wages. End result? Wages up, costs up, real wages equal. No increase of standard of living.

See? Despite the intuitiveness of it, the consumer is not capable of driving real wage gains, only temporary effects.
chavos is offline  
 

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360