The Democrat-Union Succubus: This Week: Greek Deal, Gupta Charges, H-P Turnabout - WSJ.com

This Week: Greek Deal, Gupta Charges, H-P Turnabout - WSJ.com

Another Take on Jobs and Incomes

If one thinks about jobs in the economy in a broader sense, there is an easy analogy to ordinary personal behavior - i.e. if something goes up in price (labor costs), one looks to make substitutions (capital goods).

As unions and liberals define labor as needing this benefit and that, the cost of labor goes up (both in terms of real costs and net costs or benefits to the employed).

As a result, producers that want to stay in business have to pay attention to global competition.

As recently reported, Obama's Administration has put in more and more expensive regulations that cost American businesses real money. Thus, less money left to pay labor.

In a poor African country, a farmer won't own machinery, he'll find it cheaper to hire low-paid laborers. In the US, it's just the opposite.

But, to have the skills to handle sophisticated capital goods (equipment) or to run a highly sophisticated business (advanced information technologies) takes skills. These get paid commensurately higher salaries.

Thus, as the liberal part of society tries to equalize outcomes, it marginalizes the incentive to develop skills. As a result, there is high unemployment (due to wage distortion and substitution) and large numbers of unfilled jobs where particular skill sets are needed.

The solution to the unemployment problem begins by recognizing the need to remove artificial inhibitors to demand (labor) meeting supply (job openings and job opportunities).

Occupy Wall-Streeters have succumbed to the Democratic-Union succubus that they are 'entitled' so they should get - rather than the need to remove restraints to opportunity.