A Quote by Joseph Stiglitz
During my three years as chief economist of the World Bank, labor market issues were looked at through the lens of neoclassical economics. A standard message was to increase labor market flexibility. The not-so-subtle subtext was to lower wages and lay off unneeded workers.
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Everybody feels better about himself, his community, and his country if employers are paying workers well. Economics, though, teaches that if every employer is pressured to raise wages, some labor will be priced out of the market.
When illegal labor is used, that almost always depresses wages paid to all workers. The illegal workers can be exploited, and they will usually accept lower wages. As a result, all workers in the plant, including U.S. citizens, will see their wages go down.
Private sector labor market flows provide additional indications of the strength of the labor market. For example, the quits rate has tended to be pro-cyclical, since more workers voluntarily quit their jobs when they are more confident about their ability to find new ones and when firms are competing more actively for new hires.
Since it is to the advantage of the wage-payer to pay as little as possible, even well-paid labor will have no more than what is regarded in a particular society as the reasonable level of subsistence. The lower ranks of labor will commonly have less, and if public relief were afforded even up to the wage-level of the lowest ranks of labor, that relief would compete in the labor market; check or dry up the supply of wage-labor. It would tend to render the performance of work by the wage-earner redundant.
Apparently, union bosses are so distraught about declining enrollments they will stoop to exploiting illegal workers. There is no doubt that this would hurt American workers, who would suddenly face a flooded job market full of cheap foreign labor. It would depress the wages of the American workers and cost them jobs.
Labor unions have a long history of benefitting all workers, even those who are not members of unions, because everyone's wages go up. If we don't increase membership - and membership in labor unions is going down because of the attacks against organized labor - it's something every single American, whether they're officially in a union or not, should be concerned about. It's a spiral. It's a weakening of the middle class and our economy can't sustain that.
It is but a truism that labor is most productive where its wages are largest. Poorly paid labor is inefficient labor, the world over.
What about precarious labor? It's actually not the most efficient form of labor at all. They were much more efficient when they had loyalty to their workers and people were allowed to be creative and contribute - you know that what precarious labor does is that it's the best weapon ever made to depoliticize labor. They're always putting the political in front of the economic.
Reduce the supply of black labor by colonizing the black laborer out of the country, and by precisely so much you increase the demand for and wages of white labor.
The pace of increases in labor compensation provides another possible indicator, albeit an imperfect one, of the degree of labor market slack.
All public resources go to the rich. The poor, if they can survive in the labor market, fine. Otherwise, they die. That's economics in a nutshell.
In a free market, businesses compete for customers by keeping prices down and for labor by keeping wages up.
In a market economy with the division and specialization of labor, people use others as means to achieve their ends. This is the essence of market cooperation.
Labor Day 2013 is special. This year marks the centennial of the U.S. Department of Labor - 100 years of working for America's workers.
If you are trying to favor the unions by having more rigid labor market and keeping wages very high, you could be blocking people from getting new jobs.
The market is not a place, a thing, or a collective entity. The market is a process, actuated by the interplay of the actions of the various individuals cooperating under the division of labor.
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