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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (497912)7/24/2009 2:25:52 PM
From: bentway1 Recommendation  Read Replies (3) of 1573053
 
"In general the demand for labor is based on the demand for goods and services. Increasing disposable income increases demand for goods and service... and thus employment. From a cost of labor perspective that may have an impact at the margin but not nearly as much as impact of the increased spending power."

It's a pretty simple principle to grasp, much like the right price for a product. Too high, you don't move enough units, too low, you don't make enough profit - but in the middle are the maximum profits.

It's exactly the same with wages. If the top 1% of the earners get 20% of the total wages, as now, they can't possibly consume enough to power our consumer economy. The wealth needs to be "spread around", as Obama says. In the '50's and ''60's wages were much more egalitarian, and our economy reflected that.
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