RE: In case anyone loses sight of what these republican cocksuckers want
February 8, 2012 at 5:11 pm
Quote:You are increasing the demand of the worker. At the moment there are numerous low-paid jobs which have a minimum wage, and so companies only hire a certain amount of people. If you lower the wage, you can hire more people for the same amount of money.
You're missing my point. You are assuming that a business WILL hire more people if wages decrease. A decrease in wages will increase profitability however it has no effect on demand. If you lay off than 5 ppl making $2/hr so that you can hire 9 ppl making $1/hr you've increased the work force but reduced aggregate demand. Businesses are trimming payrolls not due to high wages but excess capacity.
Quote:There is more demand for workers who will do the job for less...always. Companies will always prefer to hire 5 people at $1 an hour than 1 person at $5 an hour, simply because it's more profitable for them (5x the work for the same cost).This would have no effect on profitability as your labor expense has not changed. You are assuming that by hiring 5x the people that you would have 5x the productivity. That is a huge assumption. Most businesses maximize profitability by increasing efficiencies. In your scenario, the company would prefer to hire 1 person at $1/hr to increase profitability.
