mrmcafee(nospam)" <"mrmcafee(nospam)
5/19/2007 1:24:00 AM
Billzz wrote:
> "John W. Pierce" <jwpretd@satx.rr.com> wrote in message
> news:464e24f7$0$9969$4c368faf@roadrunner.com...
>
>>"Jerry Okamura" <okamuraj005@hawaii.rr.com> wrote
>>
>>>Low labor cost translates to lower prices for the goods and services they
>>>sell. Lower prices for the goods and services they sell, means it helps
>>>the poor more than the rich....
>>
>>No, lower labor cost translates to higher profit, not a lower price for
>>the consumer. The consumer-level price is set at whatever the traffic will
>>bear, and has little connection to the cost of producing goods or
>>providing services.
>
>
> Lower labor cost means lower costs of production which means more
> competitiveness, in the marketplace. If the same retail pricing structure
> is followed, then there may be higher profit, but the marketplace is
> self-correcting, and so others gain the same advantage in lower labor cost,
> then undercut the "old" price and so the retail price falls, along with the
> profits, until an equilibrium is reached.
You used a lot of words to tells us that the selling price is as stated,
what the market will bear. So far as setting the selling price is
concerned, labor cost just don't apply. What labor cost influence is
whether or not you participate in the market. If you can produce a
widget for $1.00 and sell as many as you can produce for $10.00 (but not
$11.00) then the price will be $10.00. If a competitor offers the same
widget for $9.00, and you can no longer sell as many as you can make,
then you match or beat his price. That is a function of "what the market
will bear" and not lower labor cost. Lower labor cost just enable you to
participate longer.
>
> This week we can place an order in a McDonald's drive-thru and have it sent
> around the world to India, then back to the kitchen, fifty feet away. Some
> way to escape the minimum-wage law, and don't even have to worry about
> health benefits.
What a boon for mankind!! (NOT)
>
> Both Milton Friedman and John Galbraith are no longer with us, but they were
> at opposite ends of the economic spectrum and it would be really interesting
> to read something from them about globalization. Thomas Friedman recently
> wrote a book called, "The World is Flat" which is both informative and
> frightening. And it just may be a book to read about the subject of lower
> labor costs.
>
> I remember the Michael Moore movie, "Roger and Me" and thinking that this
> person did not have one single clue as to what was happening in the world.
> While he was bemoaning Flint, MI, GM was opening plants in Spring Hill, TN
> and Fort Worth, TX. I waited for the interview with the UAW. Nothing. Not
> a clue. Or he was a propagandizing opportunist. Naw, that can't be it.
>
> Well, economics is a fascinating subject, but since this is soc.veterans, we
> don't talk about it.
>
>
--
*******************
Michael R. McAfee
Mesa, AZ
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