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+--- Thread: How can changes in the supply of labor affect real wages? (/thread-44454.html)
How can changes in the supply of labor affect real wages? - Robert - 11-19-2012 03:03 AM
what factors could cause increased immigration to raise wages?
How does economic growth affect social indicators such as child labor?
Does economic growth necessarily cause more inequality?
- Anjaree - 11-19-2012 03:11 AM
The real wage will decline due mainly to a surplus, or supply more than demand.But in the case of Union, it will have less effects.
Legal immigrant can increase real wage if the productivity increases.Or they can be a member of the Union.
No, it does not.The free market system does.
- Dave B - 11-19-2012 03:11 AM
I would recommend you look up the Peasant's Revolt in the day of Edward II for the inverse of what you are asking and for the formation of guilds.
You asked your questions out of order, so follow me by the numbers after you follow by the logic. Read this twice.
1) Productivity times workforce is GNP. If GNP goes up more than workforce percentage wise, that means your productivity went up, probably by releasing people from tasks now filled by the new entrants or by the new entrants themselves. That happened during the early 1900s.
3) If nobody has anything, everybody is equal. Economic growth does indeed cause inequity from the zero point because the labor you hire must make you more money than they cost or there is no economic incentive to hire them. The owner will either prosper more than the labor or he will go out of business. However, there is a reason that land based resource management is different from resource improvement in, say, factories - machines are not as easy to use as hand tools, and knowledge is power. So either after it gets bad it gets better, or you cannot grow after your workforce has achieved the maximum size the infrastructure can support.
2) Effects on social indicators depends on what kind of economy you are starting with, and how far you carry it. One way to increase business growth is to increase inequality as much as it can possibly be done - slave and child labor is about as bad as it gets provided you don't have to house them humanely. That maximizes the spread between cost and benefit of a labor hour, which is great if you are using hoes and shovels. However, low cost labor doesn't work well in industrializing environments that require expertise to run or maintain. But if you work this line of thought backwards, you may find that economic development is a prime mover of social equity.