To build a new house in my area, one must plunk down $100k to $150k in fees to various government agencies and fees to the people who will take care of all the red tape and paperwork before construction can even start.
Wage is based on two factors. Economic value, how much revenue is generated by using an employee for a a job. The other factor is supply and demand for that job. Supply meaning how many people have the skills to do that job and want to do it at a given pay scale. Demand meaning how many jobs are offered relating to the pay rate for that job. As more people are willing to do the job at a lower rate, it drives down wages. As more people with the same skill set and ability to do a job compete for existing jobs, it drives down wages. It's obviously a lot more complex than I've defined it, but for a basic ECON 101 definition, I think that sums it up.
The two forces are related but they are not the same. Value can be both intrinsic or subjective... Supply and demand typically drives economic value...or a commodity can have it's own intrinsic worth regardless of supply and demand.
I'm not here to argue, the OP asked a question and I've given a definition on what drives wages... You don't like it...feel free to post your own...I'm done arguing with you. You're arguing semantics and little else.
I'm not really arguing semantics, I'm just pointing out that if you start breaking down supply and demand then a million things affect wages.
Caeia Iulia Regilia; 　 There is no housing market now Reggie, because of the idiotic logic you are using right here. Why is that do you suppose? Because the average working class American doesn’t make enough to support such ignorance and wishful thinking. You want to talk about economics but refuse to acknowledge the effects of an unrealistically manipulated, manmade economics that doesn’t exist to begin with. Oh sure it worked for a while but the looting is over, what does America’s brightest have in store for us now. 　 Ya God(*)(*)(*)ed right it does, and those at the top take way more than their share and assure they get more than they actually deserve. 　 　 　 It’s the over inflated cost of living that requires higher wages. You know the higher wages they (the workers) haven’t been getting for decades now. Money that is there, it just doesn’t go into the workers pockets any more. It’s been redirected into the rich/elites pockets, and it is no longer useful to our economy since it is controlled by such a small minority of rich/elitists who neither earned it or deserve it. in a corporate owned nation we have been turned into, where now that goes into managements pocket 　 　 　 　 　 Maybe you can, living in your mom and dad’s basement, or in a cardboard box in the park, but $5 an hour won’t get you an apartment in most places, due to the high cost of government imposed taxes, which keep rent ridiculously high. Where do you get off telling anybody how much they need to get by on? 　 　 What is driving the need for and usage of illegal slave labor both here or abroad, is senseless greed. This isn’t a game of Monopoly, the goal isn’t to wipe out everybody else involved. The goal, or what should be the goal is stability, fair competition, where a small business is just as capable of maintaining an existence as a multi-billion dollar corporation can, and rules and regulations that do not benefit the minority, or in our case the rich/elites. Unfortunately we have an over manipulated cronyism economic structure in this nation that doesn’t allow a competitive environment to exist any more. The best government corporate money can buy has spent the last 40-50 years insuring that an unlevel playing field exists to maximize profits in just about every industry on the planet. The sooner people start accepting this reality the sooner it can be properly rectified. Not by exploiting another class of people to create a whole new minority of winner either. 　 　 　 　 More ignorance of common sense and logic, and vilifying and demonizing those who have absolutely nothing to do with the current situation we as a nation find ourselves in?? Really?? Just F(*)(*)(*) it the fat lady has sang? Great I’m still trying to discuss logic and common sense with someone in total denial, and pointing blame at people who have had their power revoked over the years greed and corruption. Unbelievable…
If no one wants something, how can it have any value? From where does this mystic "intrinsic" value come?
　 So your solution to no housing market is to raise the cost of building a house. It doesn't work that way. If you raise the wages of the people building the house, you raise the price of the house. It's a never ending cycle. That's what living wage advocates never seem to get -- when it costs more to produce something, it will cost more to buy it. A tomato that costs $10 to grow cannot be sold for $5 -- doesn't work. They created the product and maintain the infrastructure that allows them to make the product. Then they hire people to make the product at wages that they can afford to pay. It's a complicated task that requires a higher rate of compensation. I'm sorry that you aren't smart enough to start your own business, but those are the brakes. 　 Actually, over half of the money you think goes to the "fat cat" goes directly to the government in income taxes alone. More of it is syphoned off in the form of regulations. The biggest drag on the economy is the amount of red tape involved in doing anything productive. Who says that you'd be living alone? If you can't afford to live in an apartment by yourself, get a roommate or two. People do it all the time. And BTW in case you're unable to figure it out you don't need any name-brand items. You don't need a big screen, and you don't need cable. Learn to live within your means rather than demand that the rest of us pay for your lack of work ethic. 　 　 Look, what's driving the illegal alien slave labor is the unwillingess of Americans to do those jobs at the wages dictated by the market. It isn't that the farmers are greedy or anything else -- Americans are "too good" to pick fruit in the fields, work in slaughterhouses, and so on. Secondly, your idea of a level playing field is exactly the kind of government intervention that is strangling our economy now. If you can't run a competitive business in your industry, it deserves to go out of business. That's how capitalism works. Either you do it better than the other guy, or you go home. What you want is the little league rules in which everyone gets a trophy at the end of the season even if you never won a game. That kind of economy doesn't grow, it stagnates. 　 　　 You are in denial. The problems of Western civilization are the same as the fall of other civilizations. Once it becomes easier to mooch than to produce, no one produces and the system collapses on itself. Competition is the way to prevent that from happening -- because it doesn't let the bad ideas continue.
　 　 　 No (*)(*)(*)(*) Sherlock. And that isn't what I said. You claim to understand supply and demand but claim total ignorance when it comes to cause and effect. How many successful businesses have you created and/or own? My guess is zerfukingO!!! 　 　 　 Let me try again, please try and follow along. In the mid 1970's a home cost 20-30 times less than it does today, but the wages to build one has stayed relatively the same or less than it was almost 40 years ago. So where did the money go that used to go to pay wages. 　 Well that is simple, it didn’t go anywhere. In fact it has always been there at a much higher rate, it simply goes to somebody else, in the pockets of the already overpaid. The money is still there, it just isn't going to the actual workers. You know the people who do the actual work. How in the world did these people get so disenfranchised? 　 　 Well I'm glad you asked that. Cronyism and government interference and manipulation of the US economy. First thing that had to be done was to eliminate the competition. Corporate owned government officials created intrusive regulations that all but wiped out the small business entrepreneurs, that stole profits from the more deserving corporations. They used to call em mom and pops and they were responsible for hiring a large part of the population at livable wages back in the days when capitalism was actually working. 　 　 Once theses small businesses could no longer compete and started to dwindle, the next step to the equation was to once again whittle down the competition. Of course the government did it’s share. Increased taxes, more regulations, a fire marshal inspection here, a health inspection there, turning a blind eye to the illegal use of slave labor for a selective few, and preferential treatment when it came to government contracts, tax breaks, incentives, and grants. The medium sized companies and factories were picked off like fish in a barrel. The ones that refused to go, the one’s that couldn’t be government imposed out of business, were infiltrated by spies and interlopers, and if at all possible as these companies fell under harder induced/imposed times, their stocks were appropriated by the dominating corporate entities in the industry, and successful hostile takeovers all but destroyed this countries manufacturing infrastructure. They not only took over the factories/businesses, but they eliminated their existence. Destroying the equipment, and the buildings themselves so they could not be used as a competitive force against them ever again. 　 This did two important things for the monopolized industries. It allowed prices to fluctuate to a maximized level consumers were still willing to pay, and what was left to stop the unrealistic increases, the competition? (place evil laugh here) It also created an unnatural level of out of work employees, who were willing to accept lower and lower wages during a period of time when costs and the cost of living were increasing at a rate never seen before. When this began to level off more and more, and the fat cats were expecting more for themselves the slave labor forces provided by communist dictators became more appealing as patriotism and made in America became stumbling block for the bottom line, maximizing profits at all costs. And that my friend is why there is NO F(*)(*)(*)ING HOUSING MARKET TODAY!!! But don’t let me get to far ahead of myself. 　 Enter the Free Trade Agreement scam initiated by mega corporations, and implemented by the best government corporate money can buy. Not only did these major corporate entities have the use of illegal aliens to drive down costs of labor, the threat of removing jobs altogether forced wages to deplete even more, but they did it anyway. It only took a few years to take those savings as well as government subsidies, and grants to build new top of the line factories south of the border, if the government subsidize their illegal slave labor force enough to their satisfaction, they would bring the factories to the slave labor force. But that wasn’t enough either. They were actually bringing in so much money at that point they began to build factories all over the world in just about any 3rd world hell hole that would allow them too. Now these great American icons were financing communism by utilizing communist dictators influence to create slave labor forces for pennies on the dollar, comparatively to the most desperate American employee willing to sell themselves out, sacrificing their dignity to feed their families, without having to stoop to the level of begging for assistance from the government. 　 Once again profits began to level off, so the best government corporate money can buy revitalized the rich/elites ability to show a profit in the worlds largest casino, they began reducing the tax burden on the rich yet again while purchasing votes with the chump change they borrowed and gave back to the struggling class (basically everybody else), approximately enough to fill up a tank of gas and buy a couple meal deals for their trouble. All of a sudden people start realizing that something is wrong. We are involved in multiple wars, the government piggy bank has been dwindled to crumbs, and the nations credit card is getting skid marks on it from excessive usage, and republicans even start using the credit of our grandkids to keep them and their masters sitting in high cotton. 　 Jobs leaving the country at record levels, the middle class depleting, government subsidies like never seen before in the country. Government providing subsidies for workers who income has been diminished at such unbelievable levels, more and more people who have jobs are becoming eligible for food stamps. Health care rates rising at a rate 700% faster than the government inflation rates year after year after year, and the people who are at their wits end do the only thing they can when it comes to the best government corporate money can buy. They turn to the other corporate owned party for relief. 　 　 Instead of relief, the democrats get to work arse raping our great, great grand kids, and their grandkids, and three more years of never ending abuse on the working class, the looting of the nations credit, and record unemployment continues because TAX BREAKS DO NOT CREATE JOBS in this political climate. But yea like you said it’s those greedy workers who keep taking more than they deserve, and that is the real problem here. 　 And where do we go from here?? We are going to give the reins back to the other lesser of two evils who isn’t as evil as they were a few years ago because by golly gee, there still is a generation of great, great, great, great, maybe a great or two more of our grand kids who haven’t been f(*)(*)(*)ed thoroughly enough in the arse by the best government corporate money can buy, but eh, it’s all the poor working classes fault, for not graciously accepting wages that they cannot live on because this manipulated economy dictates wages should be nothing. In fact it’s time that people learned that if they want gainful employment they are going to have to pay the rich/elites for the privilege of being peasants like God meant them to be. 　 　 　 　
Really it goes back to the very basics of economics: supply and demand. If there is a high demand for a job and a low supply, you get a high wage. If there is a low demand and high supply, you get a low wage or possibly no employment. It's not complex at all. That's why you want to do everything you can to get yourself into the demand, i.e. get a worthy education.
And when supply and demand has been artificially manipulated? There is cause and effect to be measured and dealt with. Cause for wage decreases in this country is cronyism and a corporate owned government, and so far the effect is a failing national economy simply because those at the top and their government cronies, can. 　 　 Doesn't make it right, ethical, or logical, just the way it is. There are too many available laborers because there are no jobs. More people having the best education on the planet will not do anything except, move the imaginary goal post farther and make more well paying jobs scarce. Cause and effect! 　 　 Basically all you people keep saying by ignoring the reality of the situation is, if you, the majority cannot survive in this manipulated economic market structure of the best government corporate money can buy which has created these unrealistic wages that are being forced on the majority is, F(*)(*)(*) you!! 　 What nobody is addressing is if the majority continues to fail, eventually everybody will suffer to some degree. You can spout all the scholastic economic jargon you want while the peasants begin to revolt and start taking everything they need, I’m sure they will stop looting long enough for you to make your point.
Wow. There is many an interesting reply here. Supply and demand is my view and I have heard recently that the US is lacking in skilled labor. They tell the youth to get educated, get a degree, everyone can be a leader......... That is the problem. There are not as many people with a true skill set. They get educated and think they are better than common labor and too good to work in anything they feel is now below them. Most 2 and 4 year graduates are just plain stupid and need to manage a burger joint. It is not their fault though because we let everyone into college these days. We lower the bar and this is what we get. A useless generation that is owed something because we (the parents) were too stupid to see through the rhetorical BS. I am in no way implying that they are stupid in a conventional sense I am saying they are too stupid to see the writing on the wall, suck it up and deal with it. They were educated not to deal with it.
A dollar was worth a lot more in 1970 as well, it's called inflation. Honestly I can't imagine what high school would let you drop out before you learned what inflation is. They didn't. Again, inflation. A dollar today is worth much much less than a dollar in 1970. Secondly, government regulations of the suppliers had a pretty big impact, much like today. Gasoline costs $3.50 a gallon because we are no longer allowed to drill for it or build pipelines to get it from sources on this continent. Hence we are slaving for OPEC and raising the cost of all transportation. We do the same with logging -- you can't just cut down a tree, you must make sure that it's not part of the habitat of some strange animal that only a liberal could love, that it won't mess up a creek several miles away, etc, etc, etc. Then you have the regulations on the manufature of things like nails, drywall, plastics and insulation. So the cost of materials has essentially tripled in the last 30 years as well. 　 Capitalism still works, and essentially we agree on part of the problem -- the government. If the government hadn't been enforcing silly regulations, no one would have been forced out of business or forced to sell stock to bigger corporations. The reason that this happens is that under a regulated economy, only a fairly large corporation can afford to comply with thousands upon thousands of regulations that do very little about the health and safety of said products. Government regulation is also a major force in driving up the cost of living. It does this by two mechanisms: Raising the cost to use the old technology and effectively preventing the adoption of new technology. How much do you think drugs would cost if it didn't take 20 years to prove to the regulator class that the drug had very few side effects? How many potentially lifesaving treatments are quietly killed because the company cannot afford to pay for more and more tests to prove that the pill that will cure cancer won't give people a headache? I've already mentioned fuel and other materials -- essentially we've pretty well forced all energy companies out of the US because our regulations make it so expensive to extract that you need a high gas price to justify a new well. 　 First off, it was because of the so-called slave labor than inflation didn't raise the cost of living even farther. Had the cost of labor risen at the same rate as the cost of fuel, a hamburger might cost $20 and a house would be an unreachable dream. That's the point. You can't just increase the cost of labor and expect that it won't raise the cost of living. We buy Chinese goods at low prices because it costs less and it holds down inflation. If we were to put a large tarrif on imports (aside from triggering a trade war and having no market for the goods we do produce) then the cost of living would go through the roof. Shoes might be $300, cars might cost $500,000 and so on. We can afford to buy stuff because we have cheap labor in China, India, etc. Secondly, what killed that housing market (and the economy for that matter) is that people were buying homes that they couldn't afford. They were a bad risk and so they had ARMs that adjusted. Part of that is the fact that the square footage of homes has doubled or trebled since 1950. Secondly, Americans were taught that they "deserved" large homes even if they couldn't afford them. Eventually, they couldn't afford to pay the interest on the loans and defaulted. Capitalism does work -- if the government will stay out of the way. You just can't have the government adding to the costs of business and then blame capitalism when the system doesn't run as it should. 　 　 The problem is that the government has raised the cost of everything. When you regulate the amount of pollution that is allowed to escape, the types of materials than can be used, and the way than products are manufactured, you raise the cost to make it, thus driving inflation. Secondly, pepole's idea of what poverty means has changed even in the last twenty years. Twenty years ago, cable TV, microwave ovens, and high-speed internet were luxury items. A middle class house was single storied and kids would be perfectly content to share a room. Today, that same situation is "poverty" and thus means that you're being cheated by the upper class. Not so. Back in the day, if something broke, you either fixed it or paid to fix it. Now it's pretty much replaced. What happened is that people's expectations go ever higher while society's ability to fund them is fairly static. As far as the fat cats that you love to hate -- perhaps it's that way because they are the ones driving the economy. If it weren't for such fat cats, we'd be a third world country. We get quite a lot from the evil rich who bring lots of money to the US by selling their goods overseas, who create new technologies, etc. We wouldn't have an internet to argue on if it weren't for EEEVIL big corporations. 　
C. I. Reg; 　 　 Since I am not delusional as you appear to be, I know what inflation is, it's a pay raise for the rich, and a pay cut for the working class. Costs are higher but it doesn't reflect on the average households income, it only reflects on the record profits of industry giants that paid public officials to make this the reality. 　 　 　 　 Have to stop you here. The reason gasoline is $3.50 is because industry fatcats used the government to create regulations that would eliminate competition and then to over inflate the costs of gasoline they eliminated most of their own refineries, to artificially inflate the cost of the product known as gasoline. There is no oil shortage, never has been, that is the scam. This idiocy that the two parties are in this struggle, is just that. They have been playing this game for decades now and you (as most people are unfortunately) are basically falling for the scam, hook, line, and sinker. 　 　 Our economic problems are not a supply and demand problem, it is a cause and effect problem. You understand unnecessary regulations, but you simply refuse to believe these regulations are in place to maximize profits and eliminate competition for those at the top. Follow the money for crying out loud. 　 　 　 　 　 That is the delusion in your mind. Prices have never gone down, but profits are unrealistically off the charts. When factories went someplace else, the average consumer never saw a decline in costs, that is ape(*)(*)(*)(*)batty irrational thinking. A loaf of bread in 1970 was 8 for a dollar, today the same comparable loaf is almost $3-4 depending where you live. An average new vehicle was 3-4 thousand dollars, now they are 30-40 thousand. The average home was $24,000, today what is it $250-300 thousand. For the last time, a carpenters helper plentiful since unemployment in the 1970's was high, made about $6-8 dollars an hour to build the $24,000 home. Today the same carpenters helper will make between $6-8 dollars an hour to build the $300,000.00 home. If you cannot see the different I cannot help you!! 　 　 　 　 RIGHT!!! The best government corporate money can buy. Why is reality such a difficult concept for you to grasp? 　 　 　 　 Only to morons who believe everything the rich/elites tell them to believe. Poverty means a lack of wealth and/or the ability to obtain it, just like it did in 1930, and just like it does in 2011. 　 　 　 Allow me to adjust this for you. Capitalism does work if the best government corporate money can buy would get the hell out of the way, and stop the cronyism economics that has destroyed the US economy. There. 　 　 　 　 Good lord. If it were not for the corrupting nature of money and the fact that both dominating political parties are beholding to the richest sector of the population above all else, capitalism would still exist, as it did in the 1950-60's, there wouldn't be so many people dependent on the government for their very survival, there wouldn't be a housing crisis, a banking crisis, a debt crisis, and yes we would still have an internet, people and the communities they live in would still be self sufficient and prominent. Unfortunately greed and the corruption of a plutocracy, has left us in the perpetual state of decline. 　 　
