Wages and what the market will bear.

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mophalen
mophalen's picture

I think a perfect example of the price of a good or service being a function of what the market will bear and not of wages is the price of gas. Remember when the price of a gallon of gas went above $4.00? Everybody said the price will never go below $4.00, and most likely will continue to raise. But the price did go down. Why? The market could not bear the high prices, so the market (the consumers/customers) changed their behaviors by carpooling,using public transportation, etc. because people could not afford the high price of gas. For the corporations it is about making as much profit as they can and screw labor.

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jeffbiss
jeffbiss's picture
As far as I'm concerned the

As far as I'm concerned the gas price/market example is a poor one because fuel is very heavily subsidized by governments. This ranges from tax breaks granted energy companies, military interventions to ensure supply, ignoring environmental protections, limiting liability, providing infrastructure, etc. Therefore, the price is always lower than it would be if the market paid the full price of the product. What people complained about centers more around their perception that low cost energy as birthright rather than simply its cost because for all of our history energy was subsidized by government as it is seen as an engine for econoimic growth, with those least capable of paying for it absorbing the cost, which by the way is wildlife and human poor.

In fact, even agriculture provides a poor example for many of the same reasons as cheap food is a government policy. So, wages are kept too low by allowing cheap labor from other countries to enter our market and the refusal to apply tarrifs to equalize labor, transport, and environmental costs. Look at the abuse of the H2A visas that not only harm American workers but also those foreigners brought here to perform low wage jobs. The system is intended to provide low cost food at the expense of the least capable of affording it.

captbebops
captbebops's picture
It's also difficult to

It's also difficult to compare fuel prices of Europe where taxes are added to raise the price with those of the US.  The US is a much larger country and unfortuantely has had a century of being car centric because of its size.  Europe with its concentrated population areas developed more mass transit.  

What is irrational about the American car buyer is after the price of gas went up to over $4 a gallon and dealerships couldn't keep high mileage cars in stock while slashing prices on SUVs and pickups they are now back to their old habits.  And they know damn well gas pricess are likely to go up again.

Having grown up in farm area where I saw crews of Mexicans come in and harvest asparagus I do know a lot of that work can be mechanized.  We have the technology to do so.  In the 1980s in that area I observed that one firm was marketing a sling like device that allowed those workers to lie on their stomachs on the sling and harvest asparagus which needs to be cut close to the ground and thus avoid back problems.  I never saw those take off though.

But as I've said for years just let the economy and standard of living crash back to reality and "human scale" sort of where we were in the 1970s and everything will work out fine.   We had the chance to do that in late September of 2008 but oh no the big banksters and the rich families that owned the had to be bailed out why we the people said "no".  Our congresscritters weren't listening though.