Monday, 19 December 2016

Quote of the Day: On wages and the irrelevance of worker need and employer greed

 

“An important truth is that employers compete against other employers, and employees against other employees-not employees against employers, as folklore says. It is the availability of higher-valued alternatives, not the ability to bargain collectively, that increases bargaining power.”
~ Armen Alchian and William Allen,  from their classic textbook University Economics

RELATED READING:

[Hat tip Jim Rose]

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3 comments:

  1. Do u think George Reisman argument is a little facile..?? eg.. using the car example.

    eg.
    Take a "greedy " employer in a labour intensive industry.... If he pays his employees as little as he can that actually affects the decisions of his competitors...

    In terms of "power".... Employers mostly have the edge over "employees"..
    Employees in "need" surely don't have much power in this regard..????
    As much as I love market economies.... I can see that there is a place for rules and regulation...
    ( just like in rugby.... take away the ref and u end up with thuggery and win at all costs )

    ReplyDelete
    Replies
    1. You think you spotted a facile argument on this blog? you must be new here.

      Delete
  2. you might this food for thought...

    http://www.newshub.co.nz/home/new-zealand/2016/12/napier-welders-being-paid-3-an-hour-legally.html

    ReplyDelete

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