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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (886203)	9/8/2015 10:22:34 PM
From: combjelly	Read Replies (2) \| Respond to of 1576336

Wharfie, Tim likes to play with purely theoretical concepts. Being a fan of Austrian School economics means he is comfortable with that. So he assumes that commerce operates in free markets where there is a level playing field and all of the competitors are about the same size and operate in rational ways to maximize their profits. In other words, more or less the pre-Industrial Revolution Great Britain that Adam Smith lived in and developed his theories for. In such a world, it very well may make sense to drop your prices if sick leave goes away. At most, you only have a couple of employees and they are almost certainly under-utilized because you need to be able to manage surges and shifts without giving up business. So a little extra business could be absorbed, raising over all profits. But things have changed in the intervening centuries. Some things still apply, but not everything. Tim doesn't realize that.

To: Wharf Rat who wrote (886203)	9/9/2015 9:43:40 AM
From: TimF	1 Recommendation Recommended By i-node Read Replies (2) \| Respond to of 1576336

If you raise the cost of employing people, it puts downward pressure on wages and/or employment. To the extent it can be, and is, passed along to the customer it contributes to increased prices and/or lower demand. Business owners and managers will resist having it hit profits (again they aren't altruists) but to the extent it does it will put downward pressure on investment which over time will be negative for growth and employment. In this case the most likely result seems to be that effectively employees exchange less wage growth for benefits. Not only does that make sense looked at in isolation, but its also a continuation of the actual trend in recent decades. To the extent it doesn't happen you just push the problem off somewhere else, it isn't a free lunch.