Labor costs are one of those costs. An $80,000 annual salary costs the producer 80k plus fica. Even though the worker only sees 60k, the full 80k plus fica is a cost that must be covered and hence is in prices.
Help me understand what you don't agree with here.
I don't understand why you don't get that costs experienced go into the cost of the good or service sold. Labor costs are one of those costs. An $80,000 annual salary costs the producer 80k plus fica. Even though the worker only sees 60k, the full 80k plus fica is a cost that must be covered and hence is in prices.Would you like to walk through how the law of supply and demand determines the market price? You will see that, in a competitive market, costs determine whether a business can survive, but not the price of what they sell.
I don't understand why you don't get that costs experienced go into the cost of the good or service sold.You must work for the government, that's just ass backwards thinking. The price you can get minus hard costs to produce determines what you can pay/earn, not the other way around. You don't determine how much you're going to earn or how much to pay employee's before you know what you can get for your product/service.Labor costs are one of those costs. An $80,000 annual salary costs the producer 80k plus fica. Even though the worker only sees 60k, the full 80k plus fica is a cost that must be covered and hence is in prices.
Help me understand what you don't agree with here.
Gasoline prices have increased 50% in the last couple of years, is it because everyone at the gas station got a 50% raise?...Oh wait I know, it's because of their "tax costs".
It's not rocket science.