if you try a little harder i think youll get it. there is always a give and take, or in better words a supply and demand curve. the market decides the numbers. it is more often than not, regulations that disrupt this system. Increased costs due to regulations puts stress on a bussines, the business will adjust by increasing the price of the product or decreasing expenses or simply losing profit.
The problem I see in your logic is that your pulling money out of thin air. how is one company's increased profit going to lead to further increased pay in the industry? only if the super human worker your dreaming of creates a demand for that worker. still the market is deciding the increase in wages.
This system is established and works far better than yourexpensive and tion. you can try to reinvent the wheel but the only thing your doing is thowing wrenches in the wheel that is driving the bus.
I'm thinking pretty hard on this one don't worry.
Isn't the object of a business to essentially "pull money out of thin air".
I agree with your first paragraph that there is always a give and take and with economics, it always goes up and always goes down when you try to do something or not. This is why econ is so debateable.That being said, you want the pattern to look much like our current stock market trends since the 1930's. That is a good indicator that we have expanded and companies have still been successfully invested in.
Credit and debt has had a hugeee backlash for our country obviously, but it is a necessary evil to keep our current system of trade stable. I feel like this is a whole separate issue all together. Again, people need the jobs to pay them back, while banks need to make damn sure those people can pay it back.
Yes regulations do have a major impact, which other countries don't have to compete with. So I do agree with you on that and how it does cut back potential earnings. Although, I do think some regulation is necessary for our personal standards and satisfaction of the product/service.
I don't think you are realizing my point about compensation and success, Natcigg. The pay scale/work is constructed based on the what the current market pay rate is correct. So the different in our ideology is that I firmly believe if you were able to find better workers, say an experienced engineer, or top salesman, gaming developer, and paid them more than competitors , you would essentially be taking a risk for reward. However, you'd (potentially) be making higher profits based on the experience increase in performance/happiness of your employees. Your company will (potentially) create an advantage by providing better service/products, therefore increasing the profits by taking customers away from the competition -aka pulling money out of thin air to meet the workers demand/profit, there has to be a way to make economy of scale better in your company. In order to be successful you have to have better products, better customer services, and still maintain a comparitve cost with your customers. While increasing pay and quality may slightly raise the price and risk of losing customers, the goal is hoping to gain better share by stealing customers by having better products. On that note, I believe that it comes down to what the owners want to put back in their pocket, compared to what the market is percieved to be toward their employees, rather than what the company is making as a whole compared to its competitors in a region. That is why compensation has not increased with productivity like it use to in the past. Depending on the owners, they may choose whether they want to be the company with the cheapest prices or the best quality. The better quality producers typically pull around the same amount of business in a region while paying employees more. The cheaper prices company stunts market growth in the region and keeps the rate of pay down for the market causing the quality of standard of living to not be as high as it should be. If more people work at the lower paying company. The quality of the consumer economy will go down.
So looking at the same type of product, like cars for example. If their are 3 different companies that run a city let's say, and the town was split into 3rds. The best workers got paid the highest and 1 dealership had the best workers because their cars were more expensive and are better quality. One was medium with medium pay, the other was the low end makers who's employees made the lowest wages. It would be obvious to tell which company everyone initually wanted to work for. But you got the lazy and the middle workers who don't work as hard so this drops the market rate average and the overall standard of living.
If each company were able to produce the same cars and all paid the same rate. The economy would be more stable while encouraging different types of brands to be baught, and the standard of living would be neutral. In order for this to happen, the low end company would have to take a risk and give their workers higher wages. If the expensive brand lowerd wages to meet the market. That would be bad for the whole economy.
It is hypothetical, it just depends on how you imagine the economy to becoming better over time rather than continuing to drop do to the lower market rates based on the lower paying companies.
I think a good example of this is how professional sports teams opperate.
