Re: How does productivity turn into higher wages?

zerge_at_hotmail.com
Date: 01/17/05 

Date: 17 Jan 2005 12:38:18 -0800

r...@telus.net wrote:
> On 17 Jan 2005 08:21:29 -0800, zerge@hotmail.com wrote:
>
> >As productivity increases in an industry or in a country, salaries
tend
> >to rise.
> >Can anyone explain the cause-and-effect that leads to this dynamic?
And
> >I mean at the decision maker level: what happens in the minds of the
> >employers and employees?
>
> It's just that the increased production has to go _somewhere_.
>
> -- Roy L

Yes, I understand it at THAT level. Supply is demand etc.
I just don't understand the thought processes of the employers and
employees, see? What specific market pressure makes the employers
decide to pay more and/or employees ask for more?

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